Pest Analysis of Paint Industry in India

2041 WordsDec 16, 20099 Pages
PEST ANALYSIS The pest analysis refers to four main factors: POLITICAL ECONOMICAL SOCIAL TECHNOLOGICAL The analysis will focus towards the industry that how the political stability, rules and regulation, and the legal system of the country affecting the overall industry. The economic condition, liberalization, policy toward foreign investment, and growth rate of the economy as a whole also help to analyze the overall industry attractiveness and potential for the growth. The social aspects like people are more involved in the painting process, trend of nuclear family; low interest rate of housing loan, increase of urbanization and change in thinking of the people all this is helpful for the industry consideration, also…show more content…
In India we lose thousands of crores, annually on account of corrosion - a national waste, which can be avoided by encouraging use of ‘paint for protection’. • Interest rates to be cut in the case of loans for automobiles as this will help industry to come out of the present phase of low demand, particularly for the two wheelers. • Encourage improvement in infrastructure by giving incentives in this sector, critical for the overall development in the country. This will help in improving paint consumption as well, both in the architectural and automotive industrial coatings. BUDGET IMPACT One of the big positives for the paint industry is the reduction in customs duty. Titanium dioxide prices, which account for 50% of raw material cost for paint companies, will fall significantly. Operating margins as a result, might increase notably thus enabling the companies to post better profits. However lowering of customs duty will also results in higher imports in the coming years. Housing demand might increase in the coming fiscal as a result of lower interest rate. This will benefit paint companies in a large way. As their prospects are closely linked with housing demand. WHAT CAN GOVERNMENT DO TO PROMOTE THIS INDUSTRY Government must continue to encourage investment in housing sector through tax concessions. The excise tariff should be brought

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