When we think of adrenaline, speed and aggression, we think of Motorsports. Although prevalent predominantly throughout Europe, it's carving its way through Asia. In India, motorsports first gained traction around the 1970s, but high costs combined with few opportunities led to slow growth. The past decade has seen a massive increase in interest from the audience, participants, and stakeholders, and with increased participation in international races and home-grown racing events, India has seen immense growth. In this blog, we are going to dive into details about the economic potential that motorsport holds in our country and how we can move forward while growing it.
The countries in which motorsports have recently gained popularity, like Bahrain, Saudi Arabia, and Singapore, are understanding what motor racing can bring to their countries. The number of tourists who are now going to watch races in these places is putting a lot of money back into the economy. Only this year, India hosted the Hyderabad E-Prix for Formula E and the BharatGP for MotoGP. These two categories belong to the highest level of motorsports involving the most skilled drivers in the world and the attention of the sporting world.
When you have an entire caravan of drivers and mechanics, journalists, team and family members, and thousands of kilograms of equipment moving into your city for just 3 days, it surely creates an uproar. But this uproar comes with economic benefits for the hosts. MotoGP Bharat created an economic impact of over Rs 1000 crore in India, as reported by Vaibhav Sinha, chief executive officer (CEO) of Fairstreet Sports, the Indian promoters of the event. Not only this, but racing events create thousands of temporary jobs in addition to bringing in a large influx of domestic and foreign tourists.
Formula E's first-ever race in India, the 2023 Greenko Hyderabad E-Prix, hosted in collaboration with the Telangana government, delivered an economic impact of nearly USD 84 million, or Rs 700 crore. Now that is quite an achievement for just a 3-day event.
This itself speaks volumes about the economic opportunity in a country that has yet to hold a major Motorsports event since the Indian GP in 2013 for Formula 1.
From 2008 to 2013, we had two Indians in F1, namely, Narain Karthikeyan and Karun Chandhok. There was also an F1 team, Force India, carrying the tricolour flag, which was owned and operated by an Indian, Vijay Mallya. To pour gasoline on the fire, India also hosted the Indian GP on three occasions, from 2011 to 2013, at the Buddh International Circuit, and the interest skyrocketed, creating massive opportunities for commercial opportunities.
But as all good things must come to an end, the Indian GP was dropped amid financial problems and a tax dispute with the government. This was down to the Government of Uttar Pradesh, which classified F1 not as a sport but as an entertainment event and levied higher taxes on the event. There were plenty of opportunities for advertisements, sponsorships, and overall economic impact, with tourist hotspots in the vicinity. It should also be noted that this was a privately funded event; in comparison, only two other races on the F1 calendar were privately funded, both with an already stronger and established fanbase. The Jaypee Group spent almost half a billion dollars over 3 years, showing commitment and positive feedback from the crowd. From independent reports, we know that there were lots of Indian companies open to investing in the race.
Similarly, due to a breach of contract between the newly elected Telangana government and the Formula-E management, the Hyderabad E-Prix was called off. This was just a year after a new track was created for the street event that zig-zagged around the NTR Gardens. Jeff Dodds, the CEO of Formula E, said that racing in Hyderabad was important to showcase the benefits of adopting electric vehicles in a market where pollution from vehicle engines has a massive impact on public health and the environment. This just underlines the capacity the event had to promote and advertise electric vehicles in India.
Even after all this, India is still a hub for motorsports. The Indian GP is still under contract for two more races, and talks are being held to bring it back after the successful organisation of MotoGP and FormulaE races. India has also started to host the Indian Racing League, Indian F4 Championship, and Go-Karting Championships to cultivate the younger talents and show them the opportunities in this world. Even in the Indian Racing League, around ₹200 crores have been allocated for safety equipment and street circuit infrastructure, and an annual investment of ₹50 crores for marketing and operations forms part of the plans. Along with this, RedBull has recognised the potential of the Indian market by organising show runs with previous-generation F1 cars and fun events such as Soapbox races. The current crop of drivers, such as Jehan Daruvala, Arjun, and Kush Maini, have raced in F2, F3, FormulaE, and DTM, providing immense opportunities for sponsorships by Indian businesses to showcase their brands while supporting their homegrown athletes.
Motorsports play a pivotal role in driving technological innovation for automobiles, along with boosting the entertainment and hospitality sectors wherever they go. It would be irrational not to attach our economy to the rocketship that is Motorsports. India has the ability to build the infrastructure to start growing motor racing at the grassroots level. With the right backing and push from the governments, sponsors, and crowd, there is no way that a country with more than 1.4 billion people cannot succeed and reap the rewards of something as incredible as motorsports.