* Consumer Internet:
I predict that the interesting Indian internet businesses will be hybrid businesses, combining a variety of communication assets, not just the Internet; and these businesses will address needs unique to the Indian market rather than being mere copycats of Western models.
* Mobile Value Added Services:
Value-added services (VAS), such as ringtones and ringback tones, are big sources of revenue to Indian wireless carriers. Practically everywhere else, including the US, Korea and Europe, startups have managed to grow big by getting a significant chunk of this revenue. In India, however, the VAS provider market is fragmented and the carriers reluctant to share the pie and hence encourage innovation. It's time that some brave souls in India banded together to replicate the success of global players in the VAS ecosystem like WiderThan (a BlueRun portfolio company).
* Component Manufacturers for ODMs/OEMs
* Fabless Semiconductor Companies: (aka Chip Design)
Big companies like TI and Intel have nurtured a technical talent pool in India in their 15+ years of local operation. We are likely to see startups that partner world-class chip architects who depart these companies with business managers who understand the likely markets in North America and Europe. Often, at least some of the team members will have spent part of their careers in Silicon Valley.
* Clean Technology:
India's growing hunger for energy, its problems with pollution and waste management, and the domestic research base in electrochemistry, photovoltaics and efficient power generation provide fertile soil for clean technology startups.
My bet is that as the large number of relatively undifferentiated offshore development companies consolidate, among the survivors will be companies that translate market knowledge gained by working with their customers into software products or services that can form the foundation of a scalable business.
Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.