Country's private security industry valued at Rs 40,000 crore in 2014 is likely to double by 2020 on the back of increasing concerns regarding security, says a Ficci-Grant Thornton report.
The report estimates the private security industry in India provides employment to more than 70 lakh people and is expected to further generate 50 lakh jobs by 2020.
While manned guarding is the largest segment in the security space in India with approximately 75-80 per cent market share, the cash services market, which is the next big segment is expected to cover 25 per cent of the market share in the next five years, said the report released today.
"Growing urbanisation, coupled with retail boom and increasing concerns regarding security has led to a rise of organisations catering to the private security segment in the country.
"Development of infrastructure and industries, residential complexes offers a sea of opportunities to the growing security industry. Government initiatives such as the development of 100 smart cities and Make in India campaign will add to the overall growth of the industry," said Rahul Kapur Partner Grant Thornton India.
Globally, the demand for private contract security services is likely to increase by 7.4 per cent annually and reach USD 244 billion (Rs 15.86 lakh crore) by 2016.
Several markets including China, India, Mexico, Russia and South Africa are expected to achieve double-digit growth through the year 2016, the report projected.
The report also outlined some of the challenges that the industry faces.
"The PSAR (Private Security Agencies (Regulations) Act, 2005 enacted for the private security sector (PSS) needs to be implemented uniformly across the Indian states. Also, private security companies do not have the authority to procure licensed firearms and they have to rely on guards, who have the license to carry them for personal use.
"Another key challenge for the industry is the increased rate of service tax for private security sector which has further increased the cost of services for the security agencies," it said.