While jogging through my neighborhood park in Bangalore, India, I often notice other joggers glancing at their Internet of Things (IoT)-enabled tracking devices to record their fitness scores. The IoT is rapidly transforming our lifestyles and businesses in India.
A leading Indian vehicle manufacturer recently announced plans to place IoT-enabled sensors in its vehicles. No wonder the Indian IoT market is expected to grow at a compound annual growth rate (CAGR) of 28 percent until 2020. A study by the National Association of Software Services Companies (NASSCOM) projected the Indian IoT market to hit $15 billion by 2020 — that’s 5 percent of the global IoT market.
Indian IoT Market Booming
Industries across all sectors are warming up to IoT to increase efficiency, boost revenue and enhance customer experience. Industry verticals like manufacturing, health care, automotive and e-commerce are leading the adoption of IoT in India.
The lion’s share of IoT adoption is happening in the manufacturing sector (45 to 50 percent), whereas the health care sector is adopting IoT services at a 25 to 30 percent clip. The outlook for IoT adoption in the consumer electronics, banking, connected homes, retail, transportation and energy and utilities sectors is also promising. Connected vehicles and smart cities may exceed growth in all other sectors. The Indian government has committed to invest more than $1 billion every year for the next five years through its Smart Cities Mission. This initiative is designed to boost the demand for IoT products and services and expand the market exponentially.
A Fragmented Market
The Indian IoT market is highly fragmented today. It’s dominated by startups in both industrial and consumer IoT segments. There are more than 120 firms providing a variety of IoT products and services. The number of IoT startups has multiplied five times in the last 10 years; indeed, startups are projected to gain a 60-plus percent market share. These companies have also received strong interest from investors, attracting more than $60 million since 2014.
Many major global corporations have also established research and development (R&D) centers in India, seeking to take advantage of the talent pool and strengthen their footprints in the market. India is emerging as a hot destination for innovation and growth across verticals.
Creating an Enabling Ecosystem
Things look bright for IoT entrepreneurs in India. The government has launched major enablement initiatives like Digital India, Startup India, Make in India and India Smart Grid; government agencies like NASSCOM are partnering with leading companies and institutions to create the necessary infrastructure to incubate IoT startups.
In July 2016, NASSCOM collaborated with leading industry players to launch India’s first Center of Excellence for the Internet of Things (CoE-IoT) in Bangalore. It will be a cluster of five CoEs and labs to foster innovation and accelerate development of the IoT industry in India. A Draft Policy on Internet of Things was formulated in 2015 to leverage India’s strengths in the IT services industry and promote IoT development through incentives and supportive mechanisms.
CoE-IoT will also function as a skills development platform to nurture talent and promote R&D. In addition, the Education and Research Network (ERNET) has been tapped to partner with academic institutions. For its part, the International IoT Research Collaboration (IIRC) initiative aims to attract investment in IoT R&D projects from private players and international partners.
Gaping Security Holes
Cybersecurity is a hot topic in India, especially since the number of cyberattacks doubled in the past year. The story of IoT security is no different. A compromised car or plane poses a substantially higher threat to human life than a compromised website. Unfortunately, the race to embrace the rapidly growing technology pushes IoT security to the back seat. In a rush to launch IoT products into market, developers are put under tremendous pressure to release software quickly. As a result, IoT products often reach customers with poor encryption and security loopholes in the operating system. Manufacturers often skip security updates to keep the IT cost low.
IoT devices contain a gold mine of sensitive personal and business information. Most of the IoT devices lack even basic security mechanisms. It raises serious questions about data privacy and the dangerous fallouts of a breach. India will have around 174 million smartphone users by 2017. This will create an explosion of vulnerabilities. Lack of basic security preparedness exposes the gaping security holes in the Indian IoT landscape. Lack of awareness about IoT security among users also means that IoT devices are sitting ducks for cyberattacks.
Like most countries, India does not have an IoT-specific law to regulate the IoT industry and address related security concerns. The Draft Policy on Internet of Things provides the basic road map, but it lacks specifics on IoT security. The lack of an IoT security framework further worsens the situation. The success of the IoT industry in India will depend on our ability to innovate continuously and address escalating IoT security challenges rapidly.