The Indian laboratory analytical instruments market is characterised by strong growth trends, thanks to the growing demand from key end user segments such as life sciences and environment that it caters to. The laboratory analytical instruments market in India is noted for the presence of global leading companies such as Agilent, Waters, Varian, Perkin Elmer, Thermo Fisher and Shimadzu. While these companies dominate the market, certain domestic players, including Chemito, Systronics, Elico and Netel India have established their pockets of market dominance in the country over the years.

Growth factors
The laboratory analytical instruments market in India is very unique in terms of its growth, compared to global markets. Globally, this market has been registering year on year growth rates of sub 5 per cent, whereas the growth rate in India is over 20 per cent year-on-year. Some of the key factors contributing to this growth are:

● The rise in pharma sector; the outsourcing of drug research and development to India
● The rise in the number of contract research organisations supporting clinical trials
● The growing emphasis on environmental safety and protection that is driving the influx of regulations
● The growth in the processed food product exports where compliance to standards is mandatory
● Increasing emphasis on standards in water and waste water treatment

Suppliers' predicament
Despite the stimulating growth trends, there are certain challenges that are restricting suppliers from growing explosively in this high opportunity market. Some of the key challenges include:

● Persisting demand for lower priced products. As foreign suppliers rely on imported systems, offering instruments at very low prices is a challenge
● Buyer controlled market. The mature stage of the market as well as the presence of a large number of suppliers and products created a buyer driven demand

Market size & growth
As per the recent Frost & Sullivan research on the Indian laboratory analytical instruments market, which took into account markets for chromatographs as well as spectrophotometers, the market was worth Rs 7,893.3 million in 2007 with its revenues growing 19.6 per cent over the revenues of 2006. This market is expected to reach Rs 18, 078.1 million by 2011 growing at a compound annual growth rate (CAGR) of 23 per cent.

The research further identified that the chromatography market, which comprises gas, liquid and ion chromatograph markets, accounted for 42.4 per cent of the total laboratory analytical instruments market in 2007.

Also, Frost & Sullivan's research indicated that the next few years will witness some significant changes in the laboratory analytical instruments business in India. Some of the strategic developments that the industry is expected to witness include:

● In the short term, the foreign companies in the industry are expected to partner with domestic instrument manufacturers for executing research and development (R&D) activities in the country

● Following collaborative R&D efforts, foreign suppliers are also expected to tie up with local manufacturers to develop their products locally here for targeting the low price high volume markets, which have so far been the stronghold of domestic suppliers

● Considering the nature of the application markets, Frost & Sullivan expects the market to be driven by more application-specific products, thus diminishing the generic product offerings. Companies that are able to offer customised solutions are expected to be successful compared to generic product suppliers

Conclusion
Frost & Sullivan's research clearly points out that all the companies participating in this market in India, look upon India as a critical region to their business. This results from the enticing growth that the Indian companies have achieved in the country, compared to their performance elsewhere in the world. Furthermore, as promising growth signs emanate from application segments such as life sciences, environmental conservation, chemical and petrochemical industries, opportunities in the Indian laboratory analytical instruments market is expected to grow manifold in the ensuing years.

Courtesy: Automation & Electronics Practice, Frost & Sullivan. (More information contact: remi.chaterjee@frost.com)