It took 33 years for India to increase its per-capita annual income from $100 to $500, but only five years to double it from $500 to $1,000. It’s not surprising then, that Indian industry reported huge rises in sales in June: cars (34 per cent), refrigerators (32 per cent), air conditioners (50 per cent) and microwave ovens (40 per cent) as reported by Samiran Chakraborty, Head of India Research at Standard Chartered Bank, a British financial institution which recently raised capital in India.

Penetration levels of most consumer goods are still low  – there are 12 cars per 1,000 people, while only 18 per cent of the population owns a refrigerator and 56 per cent owns a TV. India has plenty of spending to do to catch up with even China, where there are 128 cars per 1,000 people and 80 per cent of the population owns a TV.

This assures a long growth curve for most consumer products and the companies that produce and market them. Many western companies who have ignore India thus far should take a close look before it’s too late.

Berkshire Hathaway, promoted by billionaire Nebraska investor  Warren Buffet, will become part of India’s auto insurance market. Berkshire Hathaway will position itself  with an existing Indian corporation, Bajaj Allianz General.  Entrance through an existing corporation is in response to Indian law which prohibits  high level of direct foreign investment in certain industries. Specifically, in the insurance sectors, equity held by foreign direct investment is limited to 26%.

A modest initial investment of approximately $10.9 million (Rs 500 million) will fund operations. Overseeing operations is Ajit Jain, rumored successor of Warren Buffet and an IIT Kharagpur alumnus. Jain oversees Berkshire Hathaway’s reinsurance businesses. Buffett has indicated the possibility of future ventures in the country, scheduled in early 2011.

This venture will make it possible for persons in India to purchase automobile insurance online. Such services are needed in India, given the countries growing middle class population. This particular sector has been the catalyst for an increase in car sales which have skyrocketed over the last decade.

The Society of Indian Automotive Manufacturers reports a 64% increase in the sales of commercial vehicles for April 2010 compared to April 2009.  49,086 commercial vehicles were sold in India last month.

The passenger vehicles segment in April 2010 grew at 34 percent over same month last year. Indian companies sold  143,976 cars in April, compared with 103,227 units a year ago.  (Breaking down further, passenger cars grew by 39 percent, sports utility vehicles grew by 12 percent and MPV grew by 27 percent in April 2010 over April 2009).

Three wheeler and two wheeler sales were up by 22 percent and 20 percent respectively.

This is yet another indication of how India’s growth continues unabated at a breathtaking pace.