The Indian music industry failed to keep pace with double-digit growth in other entertainment sectors in the territory last year, according to a report released March 17.

While the local entertainment industry's retail revenues totaled 513 billion rupees ($12.8 billion) in 2007, up 17% from 2006, music sales increased just 1% to $7.3 billion rupees ($182 million), according to "Indian Entertainment and Media Industry 2008," the annual joint report by New Delhi-based Federation of Indian Chambers of Commerce and Industry (FICCI) and Mumbai-based PricewaterhouseCoopers India.

And while the report predicts India's entertainment industry will rack up sales of 1.2 trillion rupees ($28.92 billion) by 2012, the music sector's sales are projected to total just 8 million rupees ($200 million) that year. Last year's FICCI-PWC estimated 8.7 billion rupees ($217.5 million) in music sales in 2011.

PwC India executive director Timmy Kandhari says growth estimates for the Indian music industry "have been scaled down as physical sales continue to decline, and it's still early days for other revenues such as digital sales to make up for this loss."

According to the IFPI, in 2006 Indian music retail revenues were $165.4 million, with digital sales contributing an additional $10 million. Figures for 2007 have yet to be released by local labels body Indian Music Industry (IMI).

Kandhari says India's music industry faces an uphill battle in trying to boost sales while battling piracy and factors like the new phenomenon of FM radio stations having a negative impact on physical sales.