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Economy of India

The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable public sector in strategic sectors.[48] It is the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP); on a per capita income basis, India ranked 139th by GDP (nominal) and 127th by GDP (PPP).[49] From independence in 1947 until 1991, successive governments followed Soviet model and promoted protectionist economic policies, with extensive Sovietization, state intervention, demand-side economics, natural resources, bureaucrat driven enterprises and economic regulation. This is characterised as dirigism, in the form of the Licence Raj.[50][51] The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning.[52][53] Since the start of the 21st century, annual average GDP growth has been 6% to 7%.[48] The economy of the Indian subcontinent was the largest in the world for most of recorded history up until the onset of colonialism in early 19th century.[54][55][56]

Economy of India
CurrencyIndian rupee (INR, ₹)
1 April – 31 March
Trade organisations
WTO, WCO, SAFTA, BIMSTEC, WFTU, BRICS, G-20, BIS, AIIB, ADB and others
Country group
Statistics
Population 1,417,173,173 (2nd; 2022 est.)[5][6]
GDP
GDP rank
GDP growth
  • 7.2% (FY2022-23)[7]
  • 7% (FY2023-24)[8]
  • 7.6% (Q2 2023-24)[9]
GDP per capita
  • $2,612 (nominal; 2023 est.)[7]
  • $9,183 (PPP; 2023 est.)[7]
GDP per capita rank
GDP by sector
GDP by component
  • 5.69% (December 2023)[12]
6.50% (9th February 2024)[13]
Population below poverty line
  • $2.15/day (2017 PPP) (% population): 11.90% (2021) [14]
  • 14.96% in multidimensional poverty [15] (2023)
  • 35.7 medium (2019)[16]
  • 33.9 medium (2013)[17]
39 (2023)[20] (93rd)
Labour force
  • 523,839,158 (2022)[21]
  • 49.8% employment rate (2022)[22]
Labour force by occupation
Unemployment
  • 10.09% (October 2023)[26]
  • 20.2% youth unemployment (15 to 24 year-olds; 2022)[27]
Gross savings29.345% of GDP (2022)[28]
10-year bond 7.190% (Jan 2023)[29][30]
  • 54.9 Manufacturing (Dec 2023)[31]
  • 59.0 Services (Dec 2023)[32]
Main industries
External
Exports $770.18 billion (FY2022-23)[34]
Export goods
Main export partners
Imports $892.18 billion (FY2022-23)[34]
Import goods
Main import partners
FDI stock
  • –$120.569 billion (2022)[28][39]
  • –3.476% of GDP (2022)[28]
  • $624.7 billion (March 2023)[40]
  • ( 18.9% of GDP)
–$379.7 billion (June 2023)[41]
Public finances
6.4% of GDP (2022–23)[42]
Revenues
Expenses
Economic aid
Donor:
$4.234 billion (2021) ($30.59 billions Line of Credit in total)[44]



$622.469 billion[b][47] (4th)
(as of 2 February 2024)

All values, unless otherwise stated, are in US dollars.

Nearly 70% of India's GDP is driven by domestic consumption;[57] country remains the world's sixth-largest consumer market.[58] Apart from private consumption, India's GDP is also fueled by government spending, investments, and exports.[59] In 2022, India was the world's 6th-largest importer and the 9th-largest exporter.[60] India has been a member of the World Trade Organization since 1 January 1995.[61] It ranks 63rd on the Ease of doing business index and 40th on the Global Competitiveness Index.[62] With 476 million workers, the Indian labour force is the world's second-largest.[21] India has one of the world's highest number of billionaires and extreme income inequality.[63][64]

During the 2008 global financial crisis, the economy faced a mild slowdown. India endorsed Keynesian policy and initiated stimulus measures (both fiscal and monetary) to boost growth and generate demand. In subsequent years, economic growth revived.[65] The period between 2004 and 2014 is referred to as India's lost decade as India fell behind other BRIC economies.[66][67]

In 2021–22, the foreign direct investment (FDI) in India was $82 billion. The leading sectors for FDI inflows were the service sector, the computer industry, and the telecom industry.[68] India has free trade agreements with several nations and blocs, including ASEAN, SAFTA, Mercosur, South Korea, Japan, Australia, UAE, and several others which are in effect or under negotiating stage.[69][70]

The service sector makes up more than 50% of GDP and remains the fastest growing sector, while the industrial sector and the agricultural sector employs a majority of the labor force.[71] The Bombay Stock Exchange and National Stock Exchange are some of the world's largest stock exchanges by market capitalisation.[72] India is the world's sixth-largest manufacturer, representing 2.6% of global manufacturing output.[73] Nearly 65% of India's population is rural,[74] and contributes about 50% of India's GDP.[75] India faces high unemployment, rising income inequality, and a drop in aggregate demand.[76][77] India's gross domestic savings rate stood at 29.3% of GDP in 2022.[78] In recent years, independent economists and financial institutions have accused the government of manipulating various economic data, especially GDP growth.[79][80] India's overall social spending as a share of GDP in 2021–22 will be 8.6%, which is much lower than the average for OECD nations.[81][82]

History

 
The spice trade between India and Roman Empire was the main catalyst for the Age of Discovery.[83]
 
Tharisapalli plates granted to Saint Thomas Christians by South Indian Chera ruler Sthanu Ravi Varma testify that merchant guilds and trade corporations played a very significant role in the economy and social life during the Kulasekhara period of Kerala, India.[84]
 
Atashgah is a temple built by Indian traders before 1745, west of the Caspian Sea. The inscription shown, is a Sanskrit invocation of Lord Shiva.

For a continuous duration of nearly 1700 years from the year 1 CE, India was the world's largest economy, constituting 35 to 40% of the world GDP.[85] The combination of protectionist, import-substitution, Fabian socialism, and social democratic-inspired policies governed India for sometime after the end of British rule. The economy was then characterised as Dirigism,[50][51] It had extensive regulation, protectionism, public ownership of large monopolies, pervasive corruption and slow growth.[52][53][86] Since 1991, continuing economic liberalisation has moved the country towards a market-based economy.[52][53] By 2008, India had established itself as one of the world's faster-growing economies.

Ancient and medieval eras

Indus Valley Civilisation

The citizens of the Indus Valley civilisation, a permanent settlement that flourished between 2800 BCE and 1800 BCE, practised agriculture, domesticated animals, used uniform weights and measures, made tools and weapons, and traded with other cities. Evidence of well-planned streets, a drainage system, and water supply reveals their knowledge of urban planning, which included the first-known urban sanitation systems and the existence of a form of municipal government.[87]

West Coast

Maritime trade was carried out extensively between South India and Southeast and West Asia from early times until around the fourteenth century CE. Both the Malabar and Coromandel Coasts were the sites of important trading centres from as early as the first century BCE, used for import and export as well as transit points between the Mediterranean region and southeast Asia.[88] Over time, traders organised themselves into associations which received state patronage. Historians Tapan Raychaudhuri and Irfan Habib claim this state patronage for overseas trade came to an end by the thirteenth century CE, when it was largely taken over by the local Parsi, Jewish, Syrian Christian, and Muslim communities, initially on the Malabar and subsequently on the Coromandel coast.[89]

Silk Route

Other scholars suggest trading from India to West Asia and Eastern Europe was active between the 14th and 18th centuries.[90][91][92] During this period, Indian traders settled in Surakhani, a suburb of greater Baku, Azerbaijan. These traders built a Hindu temple, which suggests commerce was active and prosperous for Indians by the 17th century.[93][94][95][96]

Further north, the Saurashtra and Bengal coasts played an important role in maritime trade, and the Gangetic plains and the Indus valley housed several centres of river-borne commerce. Most overland trade was carried out via the Khyber Pass connecting the Punjab region with Afghanistan and onward to the Middle East and Central Asia.[97] Although many kingdoms and rulers issued coins, barter was prevalent. Villages paid a portion of their agricultural produce as revenue to the rulers, while their craftsmen received a part of the crops at harvest time for their services.[98]

 
Silver coin of the Maurya Empire, 3rd century BCE
 
Silver coin of the Gupta dynasty, 5th century CE

Mughal, Rajput, and Maratha eras (1526–1820)

The Indian economy was the largest and most prosperous throughout world history and would continue to be under the Mughal Empire, up until the 18th century.[99] Sean Harkin estimates that China and India may have accounted for 60 to 70 percent of world GDP in the 17th century. The Mughal economy functioned on an elaborate system of coined currency, land revenue and trade. Gold, silver and copper coins were issued by the royal mints which functioned on the basis of free coinage.[100] The political stability and uniform revenue policy resulting from a centralized administration under the Mughals, coupled with a well-developed internal trade network, ensured that India–before the arrival of the British–was to a large extent economically unified, despite having a traditional agrarian economy characterised by a predominance of subsistence agriculture.[101] Agricultural production increased under Mughal agrarian reforms,[99] with Indian agriculture being advanced compared to Europe at the time, such as the widespread use of the seed drill among Indian peasants before its adoption in European agriculture,[102] and possibly higher per-capita agricultural output and standards of consumption than 17th century Europe.[103]

 
Mughal princes wearing muslin robes in 1665 CE

The Mughal Empire had a thriving industrial manufacturing economy, with India producing about 25% of the world's industrial output up until 1750,[104] making it the most important manufacturing center in international trade.[105] Manufactured goods and cash crops from the Mughal Empire were sold throughout the world. Key industries included textiles, shipbuilding, and steel, and processed exports included cotton textiles, yarns, thread, silk, jute products, metalware, and foods such as sugar, oils and butter.[99] Cities and towns boomed under the Mughal Empire, which had a relatively high degree of urbanization for its time, with 15% of its population living in urban centres, higher than the percentage of the urban population in contemporary Europe at the time and higher than that of British India in the 19th century.[106]

In early modern Europe, there was significant demand for products from Mughal India, particularly cotton textiles, as well as goods such as spices, peppers, indigo, silks, and saltpeter (for use in munitions).[99] European fashion, for example, became increasingly dependent on Mughal Indian textiles and silks. From the late 17th century to the early 18th century, Mughal India accounted for 95% of British imports from Asia, and the Bengal Subah province alone accounted for 40% of Dutch imports from Asia.[107] In contrast, there was very little demand for European goods in Mughal India, which was largely self-sufficient.[99] Indian goods, especially those from Bengal, were also exported in large quantities to other Asian markets, such as Indonesia and Japan.[108] At the time, Mughal Bengal was the most important center of cotton textile production.[109]

In the early 18th century the Mughal Empire declined, as it lost western, central and parts of south and north India to the Maratha Empire, which integrated and continued to administer those regions.[110] The decline of the Mughal Empire led to decreased agricultural productivity, which in turn negatively affected the textile industry.[111] The subcontinent's dominant economic power in the post-Mughal era was the Bengal Subah in the east., which continued to maintain thriving textile industries and relatively high real wages.[112] However, the former was devastated by the Maratha invasions of Bengal[113][114] and then British colonization in the mid-18th century.[112] After the loss at the Third Battle of Panipat, the Maratha Empire disintegrated into several confederate states, and the resulting political instability and armed conflict severely affected economic life in several parts of the country – although this was mitigated by localised prosperity in the new provincial kingdoms.[110] By the late eighteenth century, the British East India Company had entered the Indian political theatre and established its dominance over other European powers. This marked a determinative shift in India's trade, and a less-powerful effect on the rest of the economy.[115]

British era (1793–1947)

There is no doubt that our grievances against the British Empire had a sound basis. As the painstaking statistical work of the Cambridge historian Angus Maddison has shown, India's share of world income collapsed from 22.6% in 1700, almost equal to Europe's share of 23.3% at that time, to as low as 3.8% in 1952. Indeed, at the beginning of the 20th century, "the brightest jewel in the British Crown" was the poorest country in the world in terms of per capita income.

 
The global contribution to world's GDP by major economies from 1 CE to 2003 CE according to Angus Maddison's estimates.[54] Up until the 18th century, China and India were the two largest economies by GDP output.

From the beginning of the 19th century, the British East India Company's gradual expansion and consolidation of power brought a major change in taxation and agricultural policies, which tended to promote commercialisation of agriculture with a focus on trade, resulting in decreased production of food crops, mass impoverishment and destitution of farmers, and in the short term, led to numerous famines.[117] The economic policies of the British Raj caused a severe decline in the handicrafts and handloom sectors, due to reduced demand and dipping employment.[118] After the removal of international restrictions by the Charter of 1813, Indian trade expanded substantially with steady growth.[119] The result was a significant transfer of capital from India to England, which, due to the colonial policies of the British, led to a massive drain of revenue rather than any systematic effort at modernisation of the domestic economy.[120]

 
Estimated GDP per capita of India and United Kingdom during 1700–1950 in 1990 US$ according to Maddison.[121] However, Maddison's estimates for 18th-century India have been criticized as gross underestimates,[122] Bairoch estimates India had a higher GDP per capita in the 18th century,[123][124] and Parthasarathi's findings show higher real wages in 18th-century Bengal and Mysore.[125][104] But there is consensus that India's per capita GDP and income stagnated during the colonial era, starting in the late 18th century.[126]

Under British rule, India's share of the world economy declined from 24.4% in 1700 down to 4.2% in 1950. India's GDP (PPP) per capita was stagnant during the Mughal Empire and began to decline prior to the onset of British rule.[55] India's share of global industrial output declined from 25% in 1750 down to 2% in 1900.[104] At the same time, United Kingdom's share of the world economy rose from 2.9% in 1700 up to 9% in 1870. The British East India Company, following their conquest of Bengal in 1757, had forced open the large Indian market to British goods, which could be sold in India without tariffs or duties, compared to local Indian producers who were heavily taxed, while in Britain protectionist policies such as bans and high tariffs were implemented to restrict Indian textiles from being sold there, whereas raw cotton was imported from India without tariffs to British factories which manufactured textiles from Indian cotton and sold them back to the Indian market. British economic policies gave them a monopoly over India's large market and cotton resources.[127][128][129] India served as both a significant supplier of raw goods to British manufacturers and a large captive market for British manufactured goods.[130]

British territorial expansion in India throughout the 19th century created an institutional environment that, on paper, guaranteed property rights among the colonisers, encouraged free trade, and created a single currency with fixed exchange rates, standardised weights and measures and capital markets within the company-held territories. It also established a system of railways and telegraphs, a civil service that aimed to be free from political interference, a common-law, and an adversarial legal system.[131] This coincided with major changes in the world economy – industrialisation, and significant growth in production and trade. However, at the end of colonial rule, India inherited an economy that was one of the poorest in the developing world,[132] with industrial development stalled, agriculture unable to feed a rapidly growing population, a largely illiterate and unskilled labour force, and extremely inadequate infrastructure.[133]

The 1872 census revealed that 91.3% of the population of the region constituting present-day India resided in villages.[134] This was a decline from the earlier Mughal era, when 85% of the population resided in villages and 15% in urban centers under Akbar's reign in 1600.[135] Urbanisation generally remained sluggish in British India until the 1920s, due to the lack of industrialisation and absence of adequate transportation. Subsequently, the policy of discriminating protection (where certain important industries were given financial protection by the state), coupled with the Second World War, saw the development and dispersal of industries, encouraging rural-urban migration, and in particular, the large port cities of Bombay, Calcutta and Madras grew rapidly. Despite this, only one-sixth of India's population lived in cities by 1951.[136]

The effect of British rule on India's economy is a controversial topic. Leaders of the Indian independence movement and economic historians have blamed colonial rule for India's poor economic performance following independence and argued that the wealth required for Britain's industrial development was derived from wealth taken from India. At the same time, right-wing historians have countered that India's poor economic performance was due to various sectors being in a state of growth and decline due to changes brought in by colonialism and a world that was moving towards industrialisation and economic integration.[137]

Several economic historians have argued that real wage decline occurred in the early 19th century, or possibly beginning in the very late 18th century, largely as a result of British imperialism. According to Prasannan Parthasarathi and Sashi Sivramkrishna, the grain wages of Indian weavers were likely comparable to that of their British counterparts and their average income was around five times the subsistence level, which was comparable to advanced parts of Europe.[138][139] However they concluded that due to the scarcity of data, it was hard to draw definitive conclusions and that more research was required.[105][139] It has also been argued that India went through a period of deindustrialization in the latter half of the 18th century as an indirect outcome of the collapse of the Mughal Empire.[104]

Pre-liberalisation period (1947–1991)

Indian economic policy after independence was influenced by the colonial experience, which was seen as exploitative by Indian leaders exposed to the planned economy of the Soviet Union.[133] Domestic policy tended towards protectionism, with a strong emphasis on import substitution industrialisation, economic interventionism, a large government-run public sector, business regulation, and central planning,[140] while trade and foreign investment policies were relatively liberal.[141] Five-Year Plans of India resembled central planning in the Soviet Union. Steel, mining, machine tools, telecommunications, insurance, and power plants, among other industries, were effectively nationalised in the mid-1950s.[142] The Indian economy of this period is characterised as Dirigism.[50][51]

 
Change in per capita GDP of India, 1820–2015. Figures are inflation-adjusted to 1990 International Geary-Khamis dollars.[143][144]

Never talk to me about profit, Jeh, it is a dirty word.

— Nehru, India's Fabian Socialism-inspired first prime minister to industrialist J. R. D. Tata, when Tata suggested state-owned companies should be profitable[145]

Jawaharlal Nehru, the first prime minister of India, along with the statistician Prasanta Chandra Mahalanobis, formulated and oversaw economic policy during the initial years of the country's independence. They expected favourable outcomes from their strategy, involving the rapid development of heavy industry by both public and private sectors, and based on direct and indirect state intervention, rather than the more extreme Soviet-style central command system.[146][147] The policy of concentrating simultaneously on capital- and technology-intensive heavy industry and subsidising manual, low-skill cottage industries was criticised by economist Milton Friedman, who thought it would waste capital and labour, and retard the development of small manufacturers.[148]

I cannot decide how much to borrow, what shares to issue, at what price, what wages and bonus to pay, and what dividend to give. I even need the government's permission for the salary I pay to a senior executive.

— J. R. D. Tata, on the Indian regulatory system, 1969[145]

Since 1965, the use of high-yielding varieties of seeds, increased fertilisers and improved irrigation facilities collectively contributed to the Green Revolution in India, which improved the condition of agriculture by increasing crop productivity, improving crop patterns and strengthening forward and backward linkages between agriculture and industry.[149] However, it has also been criticised as an unsustainable effort, resulting in the growth of capitalistic farming, ignoring institutional reforms and widening income disparities.[150]

In 1984, Rajiv Gandhi promised economic liberalization, he made V. P. Singh the finance minister, who tried to reduce tax evasion and tax receipts rose due to this crackdown although taxes were lowered. This process lost its momentum during the later tenure of Mr. Gandhi as his government was marred by scandals.

Post-liberalisation period (since 1991)

Economic liberalisation in India was initiated in 1991 by Prime Minister P. V. Narasimha Rao and his then-Finance Minister Dr. Manmohan Singh.

The collapse of the Soviet Union, which was India's major trading partner, and the Gulf War, which caused a spike in oil prices, resulted in a major balance-of-payments crisis for India, which found itself facing the prospect of defaulting on its loans.[151] India asked for a $1.8 billion bailout loan from the International Monetary Fund (IMF), which in return demanded de-regulation.[152]

In response, the Narasimha Rao government, including Finance Minister Manmohan Singh, initiated economic reforms in 1991. The reforms did away with the Licence Raj, reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors.[153] Since then, the overall thrust of liberalisation has remained the same, although no government has tried to take on powerful lobbies such as trade unions and farmers, on contentious issues such as reforming labour laws and reducing agricultural subsidies.[154] This has been accompanied by increases in life expectancy, literacy rates, and food security, although urban residents have benefited more than rural residents.[155]

 
GDP grows exponentially, almost doubling every five years.
 
Indian GDP growth rate from 1985 to 2016 in red, compared to that of China in green

From 2010, India has risen from ninth-largest to the fifth-largest economies in the world by nominal GDP in 2019 by surpassing UK, France, Italy and Brazil.[156]

India started recovery in 2013–14 when the GDP growth rate accelerated to 6.4% from the previous year's 5.5%. The acceleration continued through 2014–15 and 2015–16 with growth rates of 7.5% and 8.0% respectively. For the first time since 1990, India grew faster than China which registered 6.9% growth in 2015.[needs update] However the growth rate subsequently decelerated, to 7.1% and 6.6% in 2016–17 and 2017–18 respectively,[157] partly because of the disruptive effects of 2016 Indian banknote demonetisation and the Goods and Services Tax (India).[158]

India is ranked 63rd out of 190 countries in the World Bank's 2020 ease of doing business index, up 14 points from the last year's 100 and up 37 points in just two years.[159] In terms of dealing with construction permits and enforcing contracts, it is ranked among the 10 worst in the world, while it has a relatively favourable ranking when it comes to protecting minority investors or getting credit.[160] The strong efforts taken by the Department of Industrial Policy and Promotion (DIPP) to boost ease of doing business rankings at the state level is said to affect the overall rankings of India.[161]

COVID-19 pandemic and aftermath (2020–present)

During the COVID-19 pandemic, numerous rating agencies downgraded India's GDP predictions for FY21 to negative figures,[162][163] signalling a recession in India, the most severe since 1979.[164][165] The Indian Economy contracted by 6.6 percent which was lower than the estimated 7.3 percent decline.[166] In 2022, the ratings agency Fitch Ratings upgraded India's outlook to stable similar to S&P Global Ratings and Moody's Investors Service's outlooks.[167] In the first quarter of financial year 2022–2023, the Indian economy grew by 13.5%.[168]

Data

The following table shows the main economic indicators in 1980–2022 (with IMF staff estimates in 2023–2028). Inflation below 5% is in green.[169] The annual unemployment rate is extracted from the World Bank, although the International Monetary Fund finds them unreliable.[170]

Year GDP
(in Bil. US$PPP)
GDP per capita
(in US$ PPP)
GDP
(in Bil. US$nominal)
GDP per capita
(in US$ nominal)
GDP growth
(real)
Inflation rate
(in Percent)
Unemployment
(in Percent)
Government debt
(in % of GDP)
1980 371.9 532.0 189.4 271.0  6.74%  11.3% n/a n/a
1981  431.5  603.2  196.5  274.7  6.01%  12.7% n/a n/a
1982  474.1  647.5  203.5  278.0  3.5%  7.7% n/a n/a
1983  528.6  705.3  222.0  296.3  7.3%  12.6% n/a n/a
1984  568.6  741.4  215.6  281.1  3.8%  5.2% n/a n/a
1985  617.4  787.1  237.6  302.9  5.3%  5.56%[171] n/a n/a
1986  659.9  822.8  252.8  315.2  4.8%  7.8%[172] n/a n/a
1987  703.0  857.7  283.8  346.2  4.0%  9.1% n/a n/a
1988  797.9  952.7  299.6  357.8  10.18%  7.2% n/a n/a
1989  878.5  1,027.0  301.2  352.2  5.9%  4.6% n/a n/a
1990  961.8  1,101.3  326.6  374.0  5.5%  11.2% n/a n/a
1991  1,004.8  1,127.4  274.8  308.4  1.1%  13.5% 5.6% 75.3%
1992  1,084.1  1,192.2  293.3  322.5  5.5%  9.9%  5.7%  77.4%
1993  1,162.5  1,253.5  284.2  306.4  4.8%  7.3%  5.7%  77.0%
1994  1,266.4  1,339.2  333.0  352.2  6.7%  10.3%  5.7%  73.5%
1995  1,390.8  1,442.9  366.6  380.3  7.6%  10.0%  5.8%  69.7%
1996  1,523.2  1,550.6  399.8  407.0  7.6%  9.4%  5.7%  66.0%
1997  1,612.3  1,610.8  423.2  422.8  4.1%  6.8%  5.6%  67.8%
1998  1,731.2  1,698.1  428.8  420.6  6.2%  13.1%  5.7%  68.1%
1999  1,904.2  1,834.4  466.9  449.8  8.5%  5.7%  5.7%  70.0%
2000  2,024.7  1,916.3  476.6  451.1  4.0%  3.8%  5.6%  73.6%
2001  2,172.7  2,021.1  494.0  459.5  4.9%  4.3%  5.6%  78.7%
2002  2,292.8  2,097.1  524.0  479.2  3.9%  4.0%  5.5%  82.9%
2003  2,523.8  2,270.6  618.4  556.3  7.9%  3.9%  5.6%  84.4%
2004  2,795.0  2,474.2  721.6  638.8  7.8%  3.8%  5.6%  83.4%
2005  3,150.3  2,745.1  834.2  726.9  9.3%  4.4%  5.6%  81.0%
2006  3,548.3  3,044.5  949.1  814.4  9.3%  6.7%  5.6%  77.2%
2007  4,001.4  3,381.8  1,238.7  1,046.9  10.3%  6.2%  5.6%  74.1%
2008  4,236.8  3,528.7  1,224.1  1,019.5  3.9%  9.1%  5.4%  72.8%
2009  4,625.5  3,798.5  1,365.4  1,121.2  7.9%  12.3%  5.5%  71.5%
2010  5,161.4  4,181.7  1,708.5  1,384.2  8.5%  10.5%  5.5%  66.4%
2011  5,618.4  4,493.7  1,823.1  1,458.1  6.6%  9.5%  5.4%  68.6%
2012  6,153.2  4,861.2  1,827.6  1,443.9  5.5%  10.0%  5.4%  68.0%
2013  6,477.5  5,057.2  1,856.7  1,449.6  6.4%  9.4%  5.4%  67.7%
2014  6,781.0  5,233.9  2,039.1  1,573.9  7.4%  5.8%  5.4%  67.1%
2015  7,159.8  5,464.9  2,103.6  1,605.6  8.0%  4.9%  5.4%  69.0%
2016  7,735.0  5,839.9  2,294.8  1,732.6  8.3%  4.5%  5.4%  68.9%
2017  8,276.9  6,112.1  2,702.9  1,958.0  6.8%  3.6%  5.4%  69.7%
2018  9,023.0  6,590.9  2,702.9  1,974.4  6.5%  3.4%  5.3%  70.4%
2019  9,540.4  6,897.8  2,835.6  2,050.2  4.2%  4.8%  5.3%  75.0%
2020  9,101.3  6,517.8  2,671.6  1,913.2  -5.8%  6.1%  8.0%  88.5%
2021  10,370.8  7,355.4  3,150.3  2,234.3  9.1%  5.5%  6.0%  83.7%
2022  11,900.7  8,397.5  3,389.7  2,391.9  7.2%  6.7%  7.3%  81.0%
2023  13,119.6  9,183.4  3,732.2  2,612.5  6.3%  5.5%  8.7%  81.9%
2024  14,261.2  9,891.8  4,105.4  2,847.6  6.3%  4.6% n/a  82.3%
2025  15,469.1  10,634.6  4,511.8  3,101.8  6.3%  4.1% n/a  82.2%
2026  16,765.2  11,426.4  4,951.6  3,374.8  6.3%  4.1% n/a  81.8%
2027  18,155.7  12,270.8  5,427.4  3,668.2  6.3%  4.0% n/a  81.2%
2028  19,650.2  13,173.3  5,944.4  3,985.0  6.3%  4.0% n/a  80.5%

Sectors

Agriculture, forest, and fishing

Agriculture and allied sectors like forestry, logging and fishing accounted for 18.4% of the GDP,[173] the sector employed 51.2 crore persons or 45.5% of the workforce in India are employed in agriculture.[174][175] India is major agriculture producing country and has the most arable land in the world followed by the United States.[176] However, agricultural output lags far behind its potential.[177] Agriculture's contribution to GDP has steadily declined from 1951 to 2011,[178] yet it is still the country's largest employment provider sector .[174] Crop-yield-per-unit-area of all crops has grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since the Green Revolution in India. However, international comparisons reveal the average yield in India is generally 30% to 50% of the highest average yield in the world.[179] The states of Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Andhra Pradesh, Telangana, Bihar, West Bengal, Gujarat and Maharashtra are key contributors to Indian agriculture.

 
Amul Dairy Plant at Anand, Gujarat, was a highly successful co-operative started during Operation Flood in the 1970s.

India receives an average annual rainfall of 1,208 millimetres (47.6 in) and a total annual precipitation of 4,000 billion cubic metres, with the total utilisable water resources, including surface and groundwater, amounting to 1,123 billion cubic metres.[180] 546,820 square kilometres (211,130 sq mi) of the land area, or about 39% of the total cultivated area, is irrigated.[181] India's inland water resources and marine resources provide employment to nearly 6 million people in the fisheries sector. In 2010, India had the world's sixth-largest fishing industry.[182]

 
India exports more than 100,000 tonnes (98,000 long tons; 110,000 short tons) of processed cashew kernels every year. There are more than 600 cashew processing units in Kollam alone.[183]

India is the largest producer of milk, jute and pulses, and has the world's second-largest cattle population with 170 million animals in 2011.[184] It is the second-largest producer of rice, wheat, sugarcane, cotton and groundnuts, as well as the second-largest fruit and vegetable producer, accounting for 10.9% and 8.6% of the world fruit and vegetable production, respectively. India is also the second-largest producer and the largest consumer of silk, producing 77,000 tonnes (76,000 long tons; 85,000 short tons) in 2005.[185] India is the largest exporter of cashew kernels and cashew nut shell liquid (CNSL). Foreign exchange earned by the country through the export of cashew kernels during 2011–12 reached 43.9 billion (equivalent to 83 billion or US$1.0 billion in 2023) based on statistics from the Cashew Export Promotion Council of India (CEPCI). 131,000 tonnes (129,000 long tons; 144,000 short tons) of kernels were exported during 2011–12.[186] There are about 600 cashew processing units in Kollam, Kerala.[183]

 
Assam is largest tea producer in India
 
Kodagu is the largest producer of Coffee and Pepper in India

India's foodgrain production stagnant at approximately 316 megatonnes (311 million long tons; 348 million short tons) during 2020–21.[187] India exports several agriculture products, such as Basmati rice, wheat, cereals, spices, fresh fruits, dry fruits, cotton, tea, coffee, milk products and other cash crops to the Asian, African and other countries.[188]

 
Sugarcane weighing at a Pravara Sahakari Sakhar Karkhana Ltd in Maharashtra

The low productivity in India is a result of several factors.Over-regulation of agriculture has increased costs, price risks and uncertainty, and governmental intervention in labour, land, and credit are hurting the market. Infrastructure such as rural roads, electricity, ports, food storage, retail markets and services remain inadequate.[189] The average size of land holdings is very small, with 70% of holdings being less than one hectare (2.5 acres) in size.[190] Irrigation facilities are inadequate, as revealed by the fact that only 46% of the total cultivable land was irrigated as of 2016,[181] resulting in farmers still being dependent on rainfall, specifically the monsoon season, which is often inconsistent and unevenly distributed across the country.[191] In an effort to bring an additional 20,000,000 hectares (49,000,000 acres) of land under irrigation, various schemes have been attempted, including the Accelerated Irrigation Benefit Programme (AIBP) which was provided 800 billion (equivalent to 1.2 trillion or US$14 billion in 2023) in the Union Budget.[192] Farming incomes are also hampered by lack of food storage and distribution infrastructure; a third of India's agricultural production is lost from spoilage.[193]

Mining, resources, and chemicals

Mining

 
an NLC India mine

Mining contributed $63 billion (3% of GDP) and employed 20.14 million people (5% of the workforce) in 2016.[194] India's mining industry was the fourth-largest producer of minerals in the world by volume, and eighth-largest producer by value in 2009.[195] In 2013, it mined and processed 89 minerals, of which four were fuel, three were atomic energy minerals, and 80 non-fuel.[196] The public sector accounted for 68% of mineral production by volume in 2011–12.[197] India has the world's fourth-largest natural resources, with the mining sector contributing 11% of the country's industrial GDP and 2.5% of total GDP.

Nearly 50% of India's mining industry, by output value, is concentrated in eight states: Odisha, Rajasthan, Chhattisgarh, Andhra Pradesh, Telangana, Jharkhand, Madhya Pradesh and Karnataka. Another 25% of the output by value comes from offshore oil and gas resources.[197] India operated about 3,000 mines in 2010, half of which were coal, limestone and iron ore.[198] On output-value basis, India was one of the five largest producers of mica, chromite, coal, lignite, iron ore, bauxite, barite, zinc and manganese; while being one of the ten largest global producers of many other minerals.[195][197] India was the fourth-largest producer of steel in 2013,[199] and the seventh-largest producer of aluminium.[200]

India's mineral resources are vast.[201] However, its mining industry has declined – contributing 2.3% of its GDP in 2010 compared to 3% in 2000, and employed 2.9 million people – a decreasing percentage of its total labour. India is a net importer of many minerals including coal. India's mining sector decline is because of complex permit, regulatory and administrative procedures, inadequate infrastructure, shortage of capital resources, and slow adoption of environmentally sustainable technologies.[197][202]

Iron and steel

 
Bokaro Steel Plant (BSL) alone contributes 45% of SAIL's profit and it produces highly diversified steel portfolio
 
MSTC Limited Kolkata HQ, a Metal trading e-commerce company

India surpassed Japan as the second largest steel producer in January 2019.[203] As per worldsteel, India's crude steel production in 2018 was at 106.5 tonnes (104.8 long tons; 117.4 short tons), 4.9% increase from 101.5 tonnes (99.9 long tons; 111.9 short tons) in 2017, which means that India overtook Japan as the world's second largest steel production country.

According to data presented by PIB(FY2021-22), there are more than 900 steel plants in India that produce crude steel. These are owned by PSUs, large-scale companies as well as small and medium enterprises (SMEs). In the year 2021–22, the total capacity of these plants stood at 154.06 million tonnes.[204]

The total market value of the Indian steel sector stood at US$57.8 billion in 2011 and is predicted to touch US$95.3 billion by 2016.Growth of crude steel production in India has not kept pace with the growth in capacity of production, according to the report. As per this report, steel sector contributes 2 per cent to India's GDP and employs half a million people directly and 2 million people indirectly. The Indian steel sector has been vibrant, growing at a compounded rate of 6% year-on-year.[205]

Petroleum

 
Haldia Petrochemicals in Haldia industrial city
 
MRPL Refinery in Mangalore

Petroleum products and chemicals are a major contributor to India's industrial GDP, and together they contribute over 34% of its export earnings. India hosts many oil refinery and petrochemical operations developed with help of Soviet technology such as Barauni Refinery and Gujarat Refinery , it also includes the world's largest refinery complex in Jamnagar that processes 1.24 million barrels of crude per day.[206] By volume, the Indian chemical industry was the third-largest producer in Asia, and contributed 5% of the country's GDP. India is one of the five-largest producers of agrochemicals, polymers and plastics, dyes and various organic and inorganic chemicals.[207] Despite being a large producer and exporter, India is a net importer of chemicals due to domestic demands.[208] India's chemical industry is extremely diversified and estimated at $178 billion.[209]

Chemicals and fertilizer

The chemical industry contributed $163 billion to the economy in FY18 and is expected to reach $300–400 billion by 2025.[210][211] The industry employed 17.33 million people (4% of the workforce) in 2016.[194]

 
National Fertilizers Vijapur Unit 2 as seen from prilling tower

At present, 57 large fertilizer units are manufacturing a wide number of nitrogen fertilizers. These include 29 urea-producing units and 9 ammonia sulfate-producing units as a by-product. Besides, there are 64 small-scale producing units of single super phosphate.[212]

According to the latest data released by the WTO, India has emerged as the second largest exporter of agrochemicals in the world. The rank was sixth, 10 years ago.The Indian agrochemical industry fetches valuable trade surplus every year. The trade surplus sharply increased from Rs. 8,030 crores in 2017–18 to Rs. 28,908 crores in the last fiscal. India's agrochemicals export has doubled in the last 6 years from $2.6 bn in 2017–18 to $5.4 bn in the last financial year according to the data recently released by Ministry of Commerce. It has grown at an impressive CAGR of 13% which is among the highest in the manufacturing sector.[213]

Millions of farmers in over 130 countries trust Indian agrochemicals for their high quality and affordable prices, said an industry observer. With the global agrochemicals market estimated at $78 billion, predominantly comprising post-patent products, India is rapidly becoming a preferred global hub for sourcing such agrochemicals. To bolster domestic production and reduce imports, the Crop Care Federation of India (CCFI) has recommended specific measures to the Government of India.[214]

Transportation and telecommunications

Transport

 
Vande Bharat train
 
DFCCIL maintains Dedicated freight corridors rail tracks
 
Navi Mumbai Metro
 
RapidX trains at depot

The Indian Railways contributes to ~3% of the country's gross domestic product (GDP) and has social obligations pegged at $5.3 Billion annually.[citation needed] Indian Railways revenue has grown at 5% CAGR in the past 5 years but profitability has reduced drastically in the past 4 years, due to growing infrastructure and modernization expenses. With a workforce of 1.31 million people, the IR is also one of the country's largest employers. The railways is a major contributor to jobs, GDP, and mobility.[citation needed]

Indian Railways has decided to revise its 2022–23 rolling stock production plan upwards. The Ministry's new plan targets the production of 8,429 units for the coming financial year. Production for 2022–23 has been raised by 878 units from the earlier planned 7,551, according to the revised targets.[215] Indian Railways has targeted to manufacture 475 new Vande Bharat trainsets for the next four years as a part of its modernization plan.[216] It is about Rs 40,000 crore(5 billion $) business opportunity that would also create 15,000 jobs and several spin -off benefits.[217] Indian Railway's CORE aims to electrify all of its broad gauge network by 31 March 2024.[218] The entire electrified mainline rail network in India uses 25 kV AC; DC is used only for metros.As of July 2023, India currently has 90% of total train tracks fully electrified.[219]

Under the eleventh Five Year Plan of India (2007–12), the Ministry of Railways started constructing a new Dedicated Freight Corridor (DFC) in two long routes, namely the Eastern and Western freight corridors.[220] The two routes cover a total length of 3,260 kilometres (2,030 mi), with the Eastern Dedicated Freight Corridor stretching from Ludhiana in Punjab to Dankuni in West Bengal and the Western Dedicated Freight Corridor from Jawaharlal Nehru Port in Mumbai (Maharashtra) to Dadri in Uttar Pradesh.[221] The DFC will generate around 42,000 jobs and provide long term employment to many people in public sector and private sector.[citation needed]

India is developing modern mass rapid transit systems to meet present and future urban requirements. A modern metro rail system is already in place in the cities of Navi Mumbai, Delhi, Mumbai, Bangalore, Kolkata, Hyderabad, Kochi, Gurgaon, Jaipur, Noida, Pune, Nagpur, Kanpur, Ahmedabad and Lucknow. Similar mass transit systems are intended for Agra, Bhopal, Indore, Surat, Patna, Bhubaneswar Tri-city , Chandigarh Tri-city, Gwalior, Mysore, Nashik, Prayagraj, Varanasi, Ranchi, Thane and Trivandrum. Former Prime Minister Atal Bihari Vajpayee has been credited with success of the metro systems in India and every metro has followed Delhi Metro model generating lot of real estate wealth in India specially in smaller cities like Gurgaon and Noida. For Elevated corridor, there is no need for land acquisition as pillars are built above Median strip of a road.[222][citation needed] Land prices in tier-II cities such as Lucknow, Patna, Jaipur, Ahmedabad, Pune, Kochi, and Coimbatore have gone up by almost 8-10 percent following the introduction of a metro corridor in these cities, an assessment by JLL has said.[223]

India is also developing modern RRTS system to replace the old MRTS system which will provide connectivity in Delhi Metropolitan Area and Mumbai Metropolitan Region which will serve the suburbs of these big cities at 80–100 km of distance from city center.[citation needed]

 
Indigenously developed 12,000 hp electric WAG-11 locomotive by RDSO

India is the fourth-largest civil aviation market in the world recording an air traffic of 158 million passengers in 2017.[224][225] The market is estimated to have 800 aircraft by 2020, which would account for 4.3% of global volumes,[226] and is expected to record annual passenger traffic of 520 million by 2037.[225] IATA estimated that aviation contributed $30 billion to India's GDP in 2017, and supported 7.5 million jobs – 390,000 directly, 570,000 in the value chain, and 6.2 million through tourism.[225]

Civil aviation in India traces its beginnings to 18 February 1911, when Henri Pequet, a French aviator, carried 6,500 pieces of mail on a Humber biplane from Allahabad (present-day Prayagraj) to Naini.[227] Later on 15 October 1932, J.R.D. Tata flew a consignment of mail from Karachi to Juhu Airport. His airline later became Air India and was the first Asian airline to cross the Atlantic Ocean as well as first Asian airline to fly jets.[228]

Telecommunications

 
INSAT-1B satellite: broadcasting sector in India is highly dependent on INSAT system.

The telecommunication sector generated 2.20 trillion (US$28 billion) in revenue in 2014–15, accounting for 1.94% of total GDP.[229] India is the second-largest market in the world by number of telephone users (both fixed and mobile phones) with 1.053 billion subscribers as of 31 August 2016. It has one of the lowest call-tariffs in the world, due to fierce competition among telecom operators. India has the world's third-largest Internet user-base. As of 31 March 2016, there were 342.65 million Internet subscribers in the country.[230] India's telecommunication industry is the world's second largest by the number of mobile phone, smartphone, and internet users. It is the world's 24th-largest oil producer and the third-largest oil consumer.[231]

Industry estimates indicate that there are over 554 million TV consumers in India as of 2012.[232] India is the largest direct-to-home (DTH) television market in the world by number of subscribers. As of May 2016, there were 84.80 million DTH subscribers in the country.[233]

Defence and energy

Defence

 
DRDO Advanced Towed Artillery Gun System is exported to countries like Armenia

With strength of over 1.3 million active personnel, Indian Army is the third-largest military force and the largest volunteer army. Defence expenditure was pegged at US$70.12 billion for fiscal year 2022–23 and, increased 9.8% than previous fiscal year.[234] India is the world's second largest arms importer; between 2016 and 2020, it accounted for 9.5% of the total global arms imports.[235] India exported military hardware worth 159.2 billion (US$2.0 billion) in the financial year 2022–23, the highest ever and a notable tenfold increase since 2016–17.[236]

Energy sector

 
an NLC India thermal power plant in Tamil Nadu
 
An IPHWR-700 reactor undergoing construction in Kakrapar Nuclear Plant started in 1984
 
BHEL designed super thermal power plant at Simhadri reduces carbon emission significantly

Primary energy consumption of India is the third-largest after China and US with 5.3% global share in the year 2015.[237] Coal and crude oil together account for 85% of the primary energy consumption of India. India's oil reserves meet 25% of the country's domestic oil demand.[238][239] As of April 2015, India's total proven crude oil reserves are 763.476 megatonnes (751.418 million long tons; 841.588 million short tons), while gas reserves stood at 1,490 billion cubic metres (53 trillion cubic feet).[240] Oil and natural gas fields are located offshore at Ashoknagar Oil Field, Bombay High, Krishna Godavari Basin, Mangala Area and the Cauvery Delta, and onshore mainly in the states of West Bengal, Assam, Gujarat and Rajasthan. India is the fourth-largest consumer of oil and net oil imports were nearly 8.2 trillion (US$100 billion) in 2014–15,[240] which had an adverse effect on the country's current account deficit. The petroleum industry in India mostly consists of public sector companies such as Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL). There are some major private Indian companies in the oil sector such as Reliance Industries Limited (RIL) which operates the world's largest oil refining complex.[241]

India became the world's third-largest producer of electricity in 2013 with a 4.8% global share in electricity generation, surpassing Japan and Russia.[242] By the end of calendar year 2015, India had an electricity surplus with many power stations idling for want of demand.[243] The utility electricity sector had an installed capacity of 303 GW as of May 2016 of which thermal power contributed 69.8%, hydroelectricity 15.2%, other sources of renewable energy 13.0%, and nuclear power 2.1%.[244] India meets most of its domestic electricity demand through its 106 gigatonnes (104 billion long tons; 117 billion short tons) of proven coal reserves.[245] India is also rich in certain alternative sources of energy with significant future potential such as solar, wind and biofuels (jatropha, sugarcane). India's dwindling uranium reserves stagnated the growth of nuclear energy in the country for many years.[246] Recent discoveries in the Tummalapalle belt may be among the top 20 natural uranium reserves worldwide,[247][248][249][needs update] and an estimated reserve of 846,477 tonnes (833,108 long tons; 933,081 short tons) of thorium[250] – about 25% of world's reserves – are expected to fuel the country's ambitious nuclear energy program in the long-run. The Indo-US nuclear deal has also paved the way for India to import uranium from other countries.[251]

Infrastructure and constructions

 
Paradeep Port the third largest port in India after Mundra Port and Kandla Port with 135MMTA capacity

India's infrastructure and transport sector contributes about 5% of its GDP. India has a road network of over 5,472,144 kilometres (3,400,233 mi) as of 31 March 2015, the second-largest road network in the world only behind United States. At 1.66 km of roads per square kilometre of land (2.68 miles per square mile), the quantitative density of India's road network is higher than that of Japan (0.91) and United States (0.67), and far higher than that of China (0.46), Brazil (0.18) or Russia (0.08).[252] Qualitatively, India's roads are a mix of modern highways and narrow, unpaved roads, and are being improved.[253] As of 31 March 2015, 87.05% of Indian roads were paved.[252] It is upgrading its infrastructure. As of May 2014, India had completed over 22,600 kilometres (14,000 mi) of 4- or 6-lane highways, connecting most of its major manufacturing, commercial and cultural centres.[254] India's road infrastructure carries 60% of freight and 87% of passenger traffic.[255]

 
Nhava Sheva Port is the second largest Container port and fourth largest port in India

India has a coastline of 7,500 kilometres (4,700 mi) with 13 major ports, 15 big private ports and 60 operational non-major ports, which together handle 95% of the country's external trade by volume and 70% by value (most of the remainder handled by air).[256] Kandla Port, New Kandla is the largest public port established in early 1960's, while Mundra is the largest private sea port.[257] The airport infrastructure of India includes 125 airports,[258] of which 66 airports are licensed to handle both passengers and cargo.[259] India has multiple global infrastructure companies such as Adani Group, JSW Infrastructure, Larsen & Toubro etc.

The construction industry contributed $288 billion (13% of GDP) and employed 60.42 million people (14% of the workforce) in 2016.[194] The construction and real estate sector ranks third among the 14 major sectors in terms of direct, indirect, and induced effects in all sectors of the economy.[260]

 
Indiabulls Blu skyscraper

The real estate sector will provide huge business opportunities, employment and big avenues for startup ecosystem. The 2023 Union budget of India also focused significantly on infrastructure with nearly ₹10 trillion direct investment of central government.[261]

Finance and trade

Banking and financial services

 
Bank of India HQ in BKC
 
India bonds
  30 year
  10 year
  2 year
  1 year
  3 month

The financial services industry contributed $809 billion (37% of GDP) and employed 14.17 million people (3% of the workforce) in 2016, and the banking sector contributed $407 billion (19% of GDP) and employed 5.5 million people (1% of the workforce) in 2016.[194] The Indian money market is classified into the organised sector, comprising private, public and foreign-owned commercial banks and cooperative banks, together known as 'scheduled banks'; and the unorganised sector, which includes individual or family-owned indigenous bankers or money lenders and non-banking financial companies.[262] The unorganised sector and microcredit are preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes such as short-term loans for ceremonies.[263]

Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory for banks to provide 40% of their net credit to priority sectors including agriculture, small-scale industry, retail trade and small business, to ensure that the banks fulfilled their social and developmental goals. Since then, the number of bank branches has increased from 8,260 in 1969 to 72,170 in 2007 and the population covered by a branch decreased from 63,800 to 15,000 during the same period. The total bank deposits increased from 59.1 billion (equivalent to 2.8 trillion or US$35 billion in 2023) in 1970–71 to 38.31 trillion (equivalent to 96 trillion or US$1.2 trillion in 2023) in 2008–09. Despite an increase of rural branches – from 1,860 or 22% of the total in 1969 to 30,590 or 42% in 2007 – only 32,270 of 500,000 villages are served by a scheduled bank.[264][265]

India's gross domestic savings in 2006–07 as a percentage of GDP stood at a high 32.8%.[266] More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold.[267] The government-owned public-sector banks hold over 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.[268] Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks – such as reforms encouraging mergers, reducing government interference and increasing profitability and competitiveness – other reforms have opened the banking and insurance sectors to private and foreign companies.[238][269]

Retail

 
World Trade Park, Shopping mall in Jaipur
 
City Centre Mall in Kolkata

The retail industry, excluding wholesale, contributed $793 billion (10% of GDP) and employed 35 million people (8% of the workforce) in 2020. The industry is the second largest employer in India, after agriculture.[270][271][272][273] The Indian retail market is estimated to be US$600 billion and one of the top-five retail markets in the world by economic value. India has one of the fastest-growing retail markets in the world,[274][275] and is projected to reach $1.3 trillion by 2020.[276][277] India has retail market worth $1.17 trillion, which contributes over 10% of India's GDP. It also has one of the world's fastest growing e-commerce markets.[278] The e-commerce retail market in India was valued at $32.7 billion in 2018, and is expected to reach $71.9 billion by 2022.[279]

India's retail industry mostly consists of local mom-and-pop stores, owner-staffed shops and street vendors. Retail supermarkets are expanding, with a market share of 4% in 2008.[280] In 2012, the government permitted 51% FDI in multi-brand retail and 100% FDI in single-brand retail. However, a lack of back-end warehouse infrastructure and state-level permits and red tape continue to limit growth of organised retail.[281] Compliance with over thirty regulations such as "signboard licences" and "anti-hoarding measures" must be made before a store can open for business. There are taxes for moving goods from state to state, and even within states.[280] According to The Wall Street Journal, the lack of infrastructure and efficient retail networks cause a third of India's agriculture produce to be lost from spoilage.[193]

 
Scenic view from Harangi Elephant Camp & Tree Park in Coorg

Industries

Tourism

 
Munnar a very popular hill station in Kerala
 
Valley of Flowers National Park, a UNESCO world heritage site

The World Travel & Tourism Council calculated that tourism generated 15.24 trillion (US$190 billion) or 9.4% of the nation's GDP in 2017 and supported 41.622 million jobs, 8% of its total employment. The sector is predicted to grow at an annual rate of 6.9% to 32.05 trillion (US$400 billion) by 2028 (9.9% of GDP).[282] Over 10 million foreign tourists arrived in India in 2017 compared to 8.89 million in 2016, recording a growth of 15.6%.[283] The tourism industry contributes about 9.2% of India's GDP and employs over 42 million people.[284] India earned $21.07 billion in foreign exchange from tourism receipts in 2015.[285] International tourism to India has seen a steady growth from 2.37 million arrivals in 1997 to 8.03 million arrivals in 2015. Bangladesh is the largest source of international tourists to India, while European Union nations and Japan are other major sources of international tourists.[286][287] Less than 10% of international tourists visit the Taj Mahal, with the majority visiting other cultural, thematic and holiday circuits.[288] Over 12 million Indian citizens take international trips each year for tourism, while domestic tourism within India adds about 740 million Indian travellers.[286] India has a fast-growing medical tourism sector of its health care economy, offering low-cost health services and long-term care.[289][290] In October 2015, the medical tourism sector was estimated to be worth US$3 billion. It is projected to grow to $7–8 billion by 2020.[291] In 2014, 184,298 foreign patients traveled to India to seek medical treatment.[292]

Films, entertainment and music industry

The Indian cinema industry is expected to garner a revenue of around Rs 16,198 crore by 2026, of which Rs 15,849 would be Box office revenue and the rest Rs 349 crore from advertising, the report added.[293] India's Recorded Music industry (which is a key sub-segment) is making steady progress at a CAGR of 13.6 percent, thanks to streaming models.[293]

Security markets

 
The National Stock Exchange of India (NSE) is the biggest stock exchange in India by trading volume as 96% trading occurs in NSE
 
Bombay Stock Exchange in Mumbai, which was Asia's first stock exchange[294]

The development of Indian security markets began with the launch of the Bombay Stock Exchange (BSE) in July 1875 and the Ahmedabad Stock Exchange in 1894. Since then, 22 other exchanges have traded in Indian cities. In 2014, India's stock exchange market became the 10th largest in the world by market capitalisation, just above those of South Korea and Australia.[295] India's two major stock exchanges, BSE and the National Stock Exchange of India, had a market capitalisation of US$1.71 trillion and US$1.68 trillion as of February 2015, according to the World Federation of Exchanges, which grew to $3.36 trillion and $3.31 trillion respectively by September 2021.[296][297]

The initial public offering (IPO) market in India has been small compared to NYSE and NASDAQ, raising US$300 million in 2013 and US$1.4 billion in 2012. Ernst & Young stated[298] that the low IPO activity reflects market conditions, slow government approval processes, and complex regulations. Before 2013, Indian companies were not allowed to list their securities internationally without first completing an IPO in India. In 2013, these security laws were reformed and Indian companies can now choose where they want to list first: overseas, domestically, or both concurrently.[299] Further, security laws have been revised to ease overseas listings of already-listed companies, to increase liquidity for private equity and international investors in Indian companies.[298]

Foreign trade and investment

 
A map showing the global distribution of Indian exports in 2006 as a percentage of the top market (US at $20.9 billion)

Foreign trade

 
 
India's exports (top) and imports (bottom), by value, in 2013–14

India's foreign trade by year

Year Exports (in USD billion) Imports (in USD billion) Trade Deficit (in USD billion)
2022[300] 458.3 725.4 -267.2
2021 420 612 -192
2020 314.31 467.19 -158.88
2019 330.07 514.07 -184
2018 303.52 465.58 -162.05
2017 275.8 384.3 -108.5
2016 262.3 381 -118.7
2015 310.3 447.9 -137.6
2014 318.2 462.9 -144.7
2013 313.2 467.5 -154.3
2012 298.4 500.4 -202.0
2011 299.4 461.4 -162.0
2010 201.1 327.0 -125.9
2009 168.2 274.3 -106.1
2008 176.4 305.5 -129.1
2007 112.0 100.9 11.1
2006 76.23 113.1 -36.87
2005 69.18 89.33 -20.15
2004 57.24 74.15 -16.91
2003 48.3 61.6 -13.3
2002 44.5 53.8 -9.3
2001 42.5 54.5 -12.0
2000 43.1 60.8 -17.7
1999 36.3 50.2 -13.9

Until the liberalisation of 1991, India was largely and intentionally isolated from world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around $200 million annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians.[301] India's exports were stagnant for the first 15 years after independence, due to general neglect of trade policy by the government of that period; imports in the same period, with early industrialisation, consisted predominantly of machinery, raw materials and consumer goods.[302] Since liberalisation, the value of India's international trade has increased sharply,[303] with the contribution of total trade in goods and services to the GDP rising from 16% in 1990–91 to 47% in 2009–10.[304][305] Foreign trade accounted for 48.8% of India's GDP in 2015.[306] Globally, India accounts for 1.44% of exports and 2.12% of imports for merchandise trade and 3.34% of exports and 3.31% of imports for commercial services trade.[305] India's major trading partners are the European Union, China, United States and United Arab Emirates.[307] In 2006–07, major export commodities included engineering goods, petroleum products, chemicals and pharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron ore and other minerals. Major import commodities included crude oil and related products, machinery, electronic goods, gold and silver.[308] In November 2010, exports increased 22.3% year-on-year to 851 billion (equivalent to 1.9 trillion or US$24 billion in 2023), while imports were up 7.5% at 1.25 trillion (equivalent to 2.8 trillion or US$35 billion in 2023). The trade deficit for the same month dropped from 469 billion (equivalent to 1.2 trillion or US$15 billion in 2023) in 2009 to 401 billion (equivalent to 900 billion or US$11 billion in 2023) in 2010.[309]

India is a founding-member of General Agreement on Tariffs and Trade (GATT) and its successor, the WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of labour, environmental issues and other non-tariff barriers to trade in WTO policies.[310]

India secured 43rd place in competitiveness index.[311]

Balance of payments

 
Cumulative current account balance 1980–2008 based on IMF data

Since independence, India's balance of payments on its current account has been negative. Since economic liberalisation in the 1990s, precipitated by a balance-of-payment crisis, India's exports rose consistently, covering 80.3% of its imports in 2002–03, up from 66.2% in 1990–91.[312] However, the global economic slump followed by a general deceleration in world trade saw the exports as a percentage of imports drop to 61.4% in 2008–09.[313] India's growing oil import bill is seen as the main driver behind the large current account deficit,[314] which rose to $118.7 billion, or 11.11% of GDP, in 2008–09.[315] Between January and October 2010, India imported $82.1 billion worth of crude oil.[314] The Indian economy has run a trade deficit every year from 2002 to 2012, with a merchandise trade deficit of US$189 billion in 2011–12.[316] Its trade with China has the largest deficit, about $31 billion in 2013.[317]

India's reliance on external assistance and concessional debt has decreased since liberalisation of the economy, and the debt service ratio decreased from 35.3% in 1990–91 to 4.4% in 2008–09.[318] In India, external commercial borrowings (ECBs), or commercial loans from non-resident lenders, are being permitted by the government for providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates them through ECB policy guidelines issued by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act of 1999.[319] India's foreign exchange reserves have steadily risen from $5.8 billion in March 1991 to ₹38,832.21 billion (US$540 billion) in July 2020.[320][321] In 2012, United Kingdom announced an end to all financial aid to India, citing the growth and robustness of Indian economy.[322][323]

India's current account deficit reached an all-time high in 2013.[324] India has historically funded its current account deficit through borrowings by companies in the overseas markets or remittances by non-resident Indians and portfolio inflows. From April 2016 to January 2017, RBI data showed that, for the first time since 1991, India was funding its deficit through foreign direct investment inflows. The Economic Times noted that the development was "a sign of rising confidence among long-term investors in Prime Minister Narendra Modi's ability to strengthen the country's economic foundation for sustained growth".[325]

Foreign direct investment

Share of top five investing countries in FDI inflows (2000–2010)[326]
Rank Country Inflows
(million US$)
Inflows (%)
1 Mauritius 50,164 42.00
2 Singapore 11,275 9.00
3 US 8,914 7.00
4 UK 6,158 5.00
5 Netherlands 4,968 4.00

As the third-largest economy in the world in PPP terms, India has attracted foreign direct investment (FDI).[327] During the year 2011, FDI inflow into India stood at $36.5 billion, 51.1% higher than the 2010 figure of $24.15 billion. India has strengths in telecommunication, information technology and other significant areas such as auto components, chemicals, apparels, pharmaceuticals, and jewellery. Despite a surge in foreign investments, rigid FDI policies[328] were a significant hindrance. Over time, India has adopted a number of FDI reforms.[327] India has a large pool of skilled managerial and technical expertise. The size of the middle-class population stands at 300 million and represents a growing consumer market.[329]

India liberalised its FDI policy in 2005, allowing up to a 100% FDI stake in ventures. Industrial policy reforms have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and investment. The upward growth curve of the real-estate sector owes some credit to a booming economy and liberalised FDI regime. In March 2005, the government amended the rules to allow 100% FDI in the construction sector, including built-up infrastructure and construction development projects comprising housing, commercial premises, hospitals, educational institutions, recreational facilities, and city- and regional-level infrastructure.[330] Between 2012 and 2014, India extended these reforms to defence, telecom, oil, retail, aviation, and other sectors.[331][332]

From 2000 to 2010, the country attracted $178 billion as FDI.[333] The inordinately high investment from Mauritius is due to routing of international funds through the country given significant tax advantages – double taxation is avoided due to a tax treaty between India and Mauritius, and Mauritius is a capital gains tax haven, effectively creating a zero-taxation FDI channel.[334] FDI accounted for 2.1% of India's GDP in 2015.[306]

As the government has eased 87 foreign investment direct rules across 21 sectors in the last three years, FDI inflows hit $60.1 billion between 2016 and 2017 in India.[335][336]

Outflows

Since 2000, Indian companies have expanded overseas, investing FDI and creating jobs outside India. From 2006 to 2010, FDI by Indian companies outside India amounted to 1.34 per cent of its GDP.[337] Indian companies have deployed FDI and started operations in United States,[338] Europe and Africa.[339] The Indian conglomerate Tata Group is United Kingdom's largest manufacturer and private-sector employer.[340][341]

Remittances

In 2015, a total of US$68.91 billion was made in remittances to India from other countries, and a total of US$8.476 billion was made in remittances by foreign workers in India to their home countries. UAE, US, and Saudi Arabia were the top sources of remittances to India, while Bangladesh, Pakistan, and Nepal were the top recipients of remittances from India.[342] Remittances to India accounted for 3.32% of the country's GDP in 2015.[306]

Mergers and acquisitions

Between 1985 and 2018 20,846 deals have been announced in, into (inbound) and out of (outbound) India. This cumulates to a value of US$618 billion. In terms of value, 2010 has been the most active year with deals worth almost 60 bil. USD. Most deals have been conducted in 2007 (1,510).[343]

Here is a list of the top 10 deals with Indian companies participating:

Acquiror Name Acquiror Mid Industry Acquiror Nation Target Name Target Mid Industry Target Nation Value of Transaction ($mil)
Petrol Complex Pte Ltd Oil & Gas Singapore Essar Oil Ltd Oil & Gas India 12,907.25
Vodafone Grp Plc Wireless United Kingdom Hutchison Essar Ltd Telecommunications Services India 12,748.00
Vodafone Grp PLC-Vodafone Asts Wireless India Idea Cellular Ltd-Mobile Bus Wireless India 11,627.32
Bharti Airtel Ltd Wireless India MTN Group Ltd Wireless South Africa 11,387.52
Bharti Airtel Ltd Wireless India Zain Africa BV Wireless Nigeria 10,700.00
BP PLC Oil & Gas United Kingdom Reliance Industries Ltd-21 Oil Oil & Gas India 9,000.00
MTN Group Ltd Wireless South Africa Bharti Airtel Ltd Wireless India 8,775.09
Shareholders Other Financials India Reliance Inds Ltd-Telecom Bus Telecommunications Services India 8,063.01
Oil & Natural Gas Corp Ltd Oil & Gas India Hindustan Petro Corp Ltd Petrochemicals India 5,784.20
Reliance Commun Ventures Ltd Telecommunications Services India Reliance Infocomm Ltd Telecommunications Services India 5,577.18

Currency

 
The Reserve Bank of India's headquarters in Mumbai, India

 • EXCHANGE RATES

Year INR per US$
(annual average)[344]
INR per Pound(£)
(annual average)[345]
1947 3.31 13.33
1950 4.76
1967 7.50 17.76
1975 9.4058
1980 7.88
1985 12.364
1987 21.18
1990 17.4992 31.07
1995 32.4198 51.17
2000 44.9401 67.99
2005 44.1000 80.15
2010 45.7393 70.65
2015 64.05 98.0101
2016 67.09 90.72
2017 64.14 87.56
2018 69.71 98.51
2019 70.394 95.06
2020 72.97 100.05
2021 74.98 101.56

The Indian rupee () is the only legal tender in India, and is also accepted as legal tender in neighbouring Nepal and Bhutan, both of which peg their currency to that of the Indian rupee. The rupee previously was divided into 100 paise, which no longer exist. The highest-denomination banknote is the 2,000 note until 30 September 2023 after which it will be scrapped and ₹500 note will become the highest denomination; the lowest-denomination coin in circulation is the ₹1 coin.[347] In 2017, demonetisation was announced in which ₹500 and ₹1000 notes were withdrawn and new ₹500 notes were issued. India's monetary system is managed by the Reserve Bank of India (RBI), the country's central bank.[348] Established on 1 April 1935 and nationalised in 1949, the RBI serves as the nation's monetary authority, regulator and supervisor of the monetary system, banker to the government, custodian of foreign exchange reserves, and as an issuer of currency. It is governed by a central board of directors, headed by a governor who is appointed by the Government of India.[349] The benchmark interest rates are set by the Monetary Policy Committee.

The rupee was linked to the British pound from 1927 to 1946, and then to US dollar until 1975 through a fixed exchange rate. It was devalued in September 1975 and the system of fixed par rate was replaced with a basket of four major international currencies: the British pound, US dollar, the Japanese yen and the Deutsche Mark.[350] In 1991, after the collapse of its largest trading partner, the Soviet Union, India faced the major foreign exchange crisis and the rupee was devalued by around 19% in two stages on 1 and 2 July. In 1992, a Liberalized Exchange Rate Mechanism (LERMS) was introduced. Under LERMS, exporters had to surrender 40 percent of their for

economy, india, this, article, long, read, navigate, comfortably, please, consider, splitting, content, into, articles, condensing, adding, subheadings, please, discuss, this, issue, article, talk, page, december, 2023, economy, india, transitioned, from, mixe. This article may be too long to read and navigate comfortably Please consider splitting content into sub articles condensing it or adding subheadings Please discuss this issue on the article s talk page December 2023 The economy of India has transitioned from a mixed planned economy to a mixed middle income developing social market economy with notable public sector in strategic sectors 48 It is the world s fifth largest economy by nominal GDP and the third largest by purchasing power parity PPP on a per capita income basis India ranked 139th by GDP nominal and 127th by GDP PPP 49 From independence in 1947 until 1991 successive governments followed Soviet model and promoted protectionist economic policies with extensive Sovietization state intervention demand side economics natural resources bureaucrat driven enterprises and economic regulation This is characterised as dirigism in the form of the Licence Raj 50 51 The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning 52 53 Since the start of the 21st century annual average GDP growth has been 6 to 7 48 The economy of the Indian subcontinent was the largest in the world for most of recorded history up until the onset of colonialism in early 19th century 54 55 56 Economy of IndiaMumbai the financial centre of India 1 2 CurrencyIndian rupee INR Fiscal year1 April 31 MarchTrade organisationsWTO WCO SAFTA BIMSTEC WFTU BRICS G 20 BIS AIIB ADB and othersCountry groupDeveloping Emerging 3 Lower middle income economy 4 Newly industrialized countryStatisticsPopulation1 417 173 173 2nd 2022 est 5 6 GDP 3 732 trillion nominal 2023 est 7 13 119 trillion PPP 2023est 7 GDP rank5th nominal 2023 3rd PPP 2023 GDP growth7 2 FY2022 23 7 7 FY2023 24 8 7 6 Q2 2023 24 9 GDP per capita 2 612 nominal 2023 est 7 9 183 PPP 2023 est 7 GDP per capita rank140th nominal 2023 a 125th PPP 2023 a GDP by sectorAgriculture 18 4 Industry 28 3 Services 53 3 FY 2021 22 10 GDP by componentPrivate final consumption 57 2 Government final consumption 10 3 Gross fixed capital formation 33 9 Exports of goods and services 22 7 Imports of goods and services 29 7 Other source 5 7 FY 2022 23 11 Inflation CPI 5 69 December 2023 12 Base borrowing rate6 50 9th February 2024 13 Population below poverty line 2 15 day 2017 PPP population 11 90 2021 14 14 96 in multidimensional poverty 15 2023 Gini coefficient35 7 medium 2019 16 33 9 medium 2013 17 Human Development Index0 633 medium 2021 18 132nd 0 475 low IHDI 108th 2021 19 Corruption Perceptions Index39 2023 20 93rd Labour force523 839 158 2022 21 49 8 employment rate 2022 22 Labour force by occupationAgriculture 42 60 23 Industry 25 12 24 Services 32 28 25 2019 Unemployment10 09 October 2023 26 20 2 youth unemployment 15 to 24 year olds 2022 27 Gross savings29 345 of GDP 2022 28 Yield curve10 year bond 7 190 Jan 2023 29 30 Purchasing Managers Index54 9 Manufacturing Dec 2023 31 59 0 Services Dec 2023 32 Main industriesTextileschemicalsfood processingsteeltransportation equipmentcementminingpetroleummachinerysoftwarepharmaceuticals 33 ExternalExports 770 18 billion FY2022 23 34 Export goodsManufacturers 70 7 Fuels and mining products 14 7 Agricultural products 14 1 Others 0 5 35 2022 Main export partners United States 18 1 European Union 14 9 United Arab Emirates 6 4 China 5 8 Bangladesh 3 6 Other 51 1 35 FY 2021 22 Imports 892 18 billion FY2022 23 34 Import goodsAgricultural products 7 Fuels and mining products 33 2 Manufacturers 52 1 Other 7 7 35 2022 Main import partners China 14 07 United Arab Emirates 7 43 United States 7 21 Russia 6 32 Saudi Arabia 5 97 Other 59 36 FY 2022 23 FDI stock 514 Billion 2021 22 37 38 Current account 120 569 billion 2022 28 39 3 476 of GDP 2022 28 Gross external debt 624 7 billion March 2023 40 18 9 of GDP Net international investment position 379 7 billion June 2023 41 Public financesGovernment debt 246 531 trillion US 3 1 trillion 28 81 9 of GDP 2023 28 Budget balance6 4 of GDP 2022 23 42 Revenues 27 163 trillion US 340 billion 2023 24 43 Expenses 45 031 trillion US 560 billion 2023 24 43 Economic aidDonor 4 234 billion 2021 30 59 billions Line of Credit in total 44 Credit ratingStandard amp Poor s 45 BBB Outlook PositiveMoody s 45 Baa3 Outlook StableFitch 45 BBB Outlook StableDBRS 46 BBB low Outlook PositiveForeign reserves 622 469 billion b 47 4th as of 2 February 2024 All values unless otherwise stated are in US dollars Nearly 70 of India s GDP is driven by domestic consumption 57 country remains the world s sixth largest consumer market 58 Apart from private consumption India s GDP is also fueled by government spending investments and exports 59 In 2022 India was the world s 6th largest importer and the 9th largest exporter 60 India has been a member of the World Trade Organization since 1 January 1995 61 It ranks 63rd on the Ease of doing business index and 40th on the Global Competitiveness Index 62 With 476 million workers the Indian labour force is the world s second largest 21 India has one of the world s highest number of billionaires and extreme income inequality 63 64 During the 2008 global financial crisis the economy faced a mild slowdown India endorsed Keynesian policy and initiated stimulus measures both fiscal and monetary to boost growth and generate demand In subsequent years economic growth revived 65 The period between 2004 and 2014 is referred to as India s lost decade as India fell behind other BRIC economies 66 67 In 2021 22 the foreign direct investment FDI in India was 82 billion The leading sectors for FDI inflows were the service sector the computer industry and the telecom industry 68 India has free trade agreements with several nations and blocs including ASEAN SAFTA Mercosur South Korea Japan Australia UAE and several others which are in effect or under negotiating stage 69 70 The service sector makes up more than 50 of GDP and remains the fastest growing sector while the industrial sector and the agricultural sector employs a majority of the labor force 71 The Bombay Stock Exchange and National Stock Exchange are some of the world s largest stock exchanges by market capitalisation 72 India is the world s sixth largest manufacturer representing 2 6 of global manufacturing output 73 Nearly 65 of India s population is rural 74 and contributes about 50 of India s GDP 75 India faces high unemployment rising income inequality and a drop in aggregate demand 76 77 India s gross domestic savings rate stood at 29 3 of GDP in 2022 78 In recent years independent economists and financial institutions have accused the government of manipulating various economic data especially GDP growth 79 80 India s overall social spending as a share of GDP in 2021 22 will be 8 6 which is much lower than the average for OECD nations 81 82 Contents 1 History 1 1 Ancient and medieval eras 1 1 1 Indus Valley Civilisation 1 1 2 West Coast 1 1 3 Silk Route 1 2 Mughal Rajput and Maratha eras 1526 1820 1 3 British era 1793 1947 1 4 Pre liberalisation period 1947 1991 1 5 Post liberalisation period since 1991 1 6 COVID 19 pandemic and aftermath 2020 present 2 Data 3 Sectors 3 1 Agriculture forest and fishing 3 2 Mining resources and chemicals 3 2 1 Mining 3 2 2 Iron and steel 3 2 3 Petroleum 3 2 4 Chemicals and fertilizer 3 3 Transportation and telecommunications 3 3 1 Transport 3 3 2 Telecommunications 3 4 Defence and energy 3 4 1 Defence 3 4 2 Energy sector 3 5 Infrastructure and constructions 3 6 Finance and trade 3 6 1 Banking and financial services 3 6 2 Retail 3 7 Industries 3 7 1 Tourism 3 7 2 Films entertainment and music industry 4 Security markets 5 Foreign trade and investment 5 1 Foreign trade 5 1 1 India s foreign trade by year 5 2 Balance of payments 5 3 Foreign direct investment 5 3 1 Outflows 5 4 Remittances 5 5 Mergers and acquisitions 6 Currency 7 Income and consumption 7 1 Poverty 8 Employment 8 1 Unemployment 8 2 Child labour 8 3 Diaspora employment 8 4 Trade unions 9 Economic issues 9 1 Corruption 9 2 Education 9 3 Economic disparities 9 4 Climate change 10 See also 11 Notes 12 References 13 Further reading 14 External linksHistoryMain articles Economic history of India and Timeline of the economy of the Indian subcontinent nbsp The spice trade between India and Roman Empire was the main catalyst for the Age of Discovery 83 nbsp Tharisapalli plates granted to Saint Thomas Christians by South Indian Chera ruler Sthanu Ravi Varma testify that merchant guilds and trade corporations played a very significant role in the economy and social life during the Kulasekhara period of Kerala India 84 nbsp Atashgah is a temple built by Indian traders before 1745 west of the Caspian Sea The inscription shown is a Sanskrit invocation of Lord Shiva For a continuous duration of nearly 1700 years from the year 1 CE India was the world s largest economy constituting 35 to 40 of the world GDP 85 The combination of protectionist import substitution Fabian socialism and social democratic inspired policies governed India for sometime after the end of British rule The economy was then characterised as Dirigism 50 51 It had extensive regulation protectionism public ownership of large monopolies pervasive corruption and slow growth 52 53 86 Since 1991 continuing economic liberalisation has moved the country towards a market based economy 52 53 By 2008 India had established itself as one of the world s faster growing economies Ancient and medieval eras Indus Valley Civilisation The citizens of the Indus Valley civilisation a permanent settlement that flourished between 2800 BCE and 1800 BCE practised agriculture domesticated animals used uniform weights and measures made tools and weapons and traded with other cities Evidence of well planned streets a drainage system and water supply reveals their knowledge of urban planning which included the first known urban sanitation systems and the existence of a form of municipal government 87 West Coast Maritime trade was carried out extensively between South India and Southeast and West Asia from early times until around the fourteenth century CE Both the Malabar and Coromandel Coasts were the sites of important trading centres from as early as the first century BCE used for import and export as well as transit points between the Mediterranean region and southeast Asia 88 Over time traders organised themselves into associations which received state patronage Historians Tapan Raychaudhuri and Irfan Habib claim this state patronage for overseas trade came to an end by the thirteenth century CE when it was largely taken over by the local Parsi Jewish Syrian Christian and Muslim communities initially on the Malabar and subsequently on the Coromandel coast 89 Silk Route Other scholars suggest trading from India to West Asia and Eastern Europe was active between the 14th and 18th centuries 90 91 92 During this period Indian traders settled in Surakhani a suburb of greater Baku Azerbaijan These traders built a Hindu temple which suggests commerce was active and prosperous for Indians by the 17th century 93 94 95 96 Further north the Saurashtra and Bengal coasts played an important role in maritime trade and the Gangetic plains and the Indus valley housed several centres of river borne commerce Most overland trade was carried out via the Khyber Pass connecting the Punjab region with Afghanistan and onward to the Middle East and Central Asia 97 Although many kingdoms and rulers issued coins barter was prevalent Villages paid a portion of their agricultural produce as revenue to the rulers while their craftsmen received a part of the crops at harvest time for their services 98 nbsp Silver coin of the Maurya Empire 3rd century BCE nbsp Silver coin of the Gupta dynasty 5th century CE Mughal Rajput and Maratha eras 1526 1820 See also Muslin trade in Bengal and Economy of the Kingdom of Mysore The Indian economy was the largest and most prosperous throughout world history and would continue to be under the Mughal Empire up until the 18th century 99 Sean Harkin estimates that China and India may have accounted for 60 to 70 percent of world GDP in the 17th century The Mughal economy functioned on an elaborate system of coined currency land revenue and trade Gold silver and copper coins were issued by the royal mints which functioned on the basis of free coinage 100 The political stability and uniform revenue policy resulting from a centralized administration under the Mughals coupled with a well developed internal trade network ensured that India before the arrival of the British was to a large extent economically unified despite having a traditional agrarian economy characterised by a predominance of subsistence agriculture 101 Agricultural production increased under Mughal agrarian reforms 99 with Indian agriculture being advanced compared to Europe at the time such as the widespread use of the seed drill among Indian peasants before its adoption in European agriculture 102 and possibly higher per capita agricultural output and standards of consumption than 17th century Europe 103 nbsp Mughal princes wearing muslin robes in 1665 CEThe Mughal Empire had a thriving industrial manufacturing economy with India producing about 25 of the world s industrial output up until 1750 104 making it the most important manufacturing center in international trade 105 Manufactured goods and cash crops from the Mughal Empire were sold throughout the world Key industries included textiles shipbuilding and steel and processed exports included cotton textiles yarns thread silk jute products metalware and foods such as sugar oils and butter 99 Cities and towns boomed under the Mughal Empire which had a relatively high degree of urbanization for its time with 15 of its population living in urban centres higher than the percentage of the urban population in contemporary Europe at the time and higher than that of British India in the 19th century 106 In early modern Europe there was significant demand for products from Mughal India particularly cotton textiles as well as goods such as spices peppers indigo silks and saltpeter for use in munitions 99 European fashion for example became increasingly dependent on Mughal Indian textiles and silks From the late 17th century to the early 18th century Mughal India accounted for 95 of British imports from Asia and the Bengal Subah province alone accounted for 40 of Dutch imports from Asia 107 In contrast there was very little demand for European goods in Mughal India which was largely self sufficient 99 Indian goods especially those from Bengal were also exported in large quantities to other Asian markets such as Indonesia and Japan 108 At the time Mughal Bengal was the most important center of cotton textile production 109 In the early 18th century the Mughal Empire declined as it lost western central and parts of south and north India to the Maratha Empire which integrated and continued to administer those regions 110 The decline of the Mughal Empire led to decreased agricultural productivity which in turn negatively affected the textile industry 111 The subcontinent s dominant economic power in the post Mughal era was the Bengal Subah in the east which continued to maintain thriving textile industries and relatively high real wages 112 However the former was devastated by the Maratha invasions of Bengal 113 114 and then British colonization in the mid 18th century 112 After the loss at the Third Battle of Panipat the Maratha Empire disintegrated into several confederate states and the resulting political instability and armed conflict severely affected economic life in several parts of the country although this was mitigated by localised prosperity in the new provincial kingdoms 110 By the late eighteenth century the British East India Company had entered the Indian political theatre and established its dominance over other European powers This marked a determinative shift in India s trade and a less powerful effect on the rest of the economy 115 British era 1793 1947 Main articles Economy of India under Company rule and Economy of India under the British Raj There is no doubt that our grievances against the British Empire had a sound basis As the painstaking statistical work of the Cambridge historian Angus Maddison has shown India s share of world income collapsed from 22 6 in 1700 almost equal to Europe s share of 23 3 at that time to as low as 3 8 in 1952 Indeed at the beginning of the 20th century the brightest jewel in the British Crown was the poorest country in the world in terms of per capita income Manmohan Singh 116 nbsp The global contribution to world s GDP by major economies from 1 CE to 2003 CE according to Angus Maddison s estimates 54 Up until the 18th century China and India were the two largest economies by GDP output From the beginning of the 19th century the British East India Company s gradual expansion and consolidation of power brought a major change in taxation and agricultural policies which tended to promote commercialisation of agriculture with a focus on trade resulting in decreased production of food crops mass impoverishment and destitution of farmers and in the short term led to numerous famines 117 The economic policies of the British Raj caused a severe decline in the handicrafts and handloom sectors due to reduced demand and dipping employment 118 After the removal of international restrictions by the Charter of 1813 Indian trade expanded substantially with steady growth 119 The result was a significant transfer of capital from India to England which due to the colonial policies of the British led to a massive drain of revenue rather than any systematic effort at modernisation of the domestic economy 120 nbsp Estimated GDP per capita of India and United Kingdom during 1700 1950 in 1990 US according to Maddison 121 However Maddison s estimates for 18th century India have been criticized as gross underestimates 122 Bairoch estimates India had a higher GDP per capita in the 18th century 123 124 and Parthasarathi s findings show higher real wages in 18th century Bengal and Mysore 125 104 But there is consensus that India s per capita GDP and income stagnated during the colonial era starting in the late 18th century 126 Under British rule India s share of the world economy declined from 24 4 in 1700 down to 4 2 in 1950 India s GDP PPP per capita was stagnant during the Mughal Empire and began to decline prior to the onset of British rule 55 India s share of global industrial output declined from 25 in 1750 down to 2 in 1900 104 At the same time United Kingdom s share of the world economy rose from 2 9 in 1700 up to 9 in 1870 The British East India Company following their conquest of Bengal in 1757 had forced open the large Indian market to British goods which could be sold in India without tariffs or duties compared to local Indian producers who were heavily taxed while in Britain protectionist policies such as bans and high tariffs were implemented to restrict Indian textiles from being sold there whereas raw cotton was imported from India without tariffs to British factories which manufactured textiles from Indian cotton and sold them back to the Indian market British economic policies gave them a monopoly over India s large market and cotton resources 127 128 129 India served as both a significant supplier of raw goods to British manufacturers and a large captive market for British manufactured goods 130 British territorial expansion in India throughout the 19th century created an institutional environment that on paper guaranteed property rights among the colonisers encouraged free trade and created a single currency with fixed exchange rates standardised weights and measures and capital markets within the company held territories It also established a system of railways and telegraphs a civil service that aimed to be free from political interference a common law and an adversarial legal system 131 This coincided with major changes in the world economy industrialisation and significant growth in production and trade However at the end of colonial rule India inherited an economy that was one of the poorest in the developing world 132 with industrial development stalled agriculture unable to feed a rapidly growing population a largely illiterate and unskilled labour force and extremely inadequate infrastructure 133 The 1872 census revealed that 91 3 of the population of the region constituting present day India resided in villages 134 This was a decline from the earlier Mughal era when 85 of the population resided in villages and 15 in urban centers under Akbar s reign in 1600 135 Urbanisation generally remained sluggish in British India until the 1920s due to the lack of industrialisation and absence of adequate transportation Subsequently the policy of discriminating protection where certain important industries were given financial protection by the state coupled with the Second World War saw the development and dispersal of industries encouraging rural urban migration and in particular the large port cities of Bombay Calcutta and Madras grew rapidly Despite this only one sixth of India s population lived in cities by 1951 136 The effect of British rule on India s economy is a controversial topic Leaders of the Indian independence movement and economic historians have blamed colonial rule for India s poor economic performance following independence and argued that the wealth required for Britain s industrial development was derived from wealth taken from India At the same time right wing historians have countered that India s poor economic performance was due to various sectors being in a state of growth and decline due to changes brought in by colonialism and a world that was moving towards industrialisation and economic integration 137 Several economic historians have argued that real wage decline occurred in the early 19th century or possibly beginning in the very late 18th century largely as a result of British imperialism According to Prasannan Parthasarathi and Sashi Sivramkrishna the grain wages of Indian weavers were likely comparable to that of their British counterparts and their average income was around five times the subsistence level which was comparable to advanced parts of Europe 138 139 However they concluded that due to the scarcity of data it was hard to draw definitive conclusions and that more research was required 105 139 It has also been argued that India went through a period of deindustrialization in the latter half of the 18th century as an indirect outcome of the collapse of the Mughal Empire 104 Pre liberalisation period 1947 1991 Main article Licence Raj Indian economic policy after independence was influenced by the colonial experience which was seen as exploitative by Indian leaders exposed to the planned economy of the Soviet Union 133 Domestic policy tended towards protectionism with a strong emphasis on import substitution industrialisation economic interventionism a large government run public sector business regulation and central planning 140 while trade and foreign investment policies were relatively liberal 141 Five Year Plans of India resembled central planning in the Soviet Union Steel mining machine tools telecommunications insurance and power plants among other industries were effectively nationalised in the mid 1950s 142 The Indian economy of this period is characterised as Dirigism 50 51 nbsp Change in per capita GDP of India 1820 2015 Figures are inflation adjusted to 1990 International Geary Khamis dollars 143 144 Never talk to me about profit Jeh it is a dirty word Nehru India s Fabian Socialism inspired first prime minister to industrialist J R D Tata when Tata suggested state owned companies should be profitable 145 Jawaharlal Nehru the first prime minister of India along with the statistician Prasanta Chandra Mahalanobis formulated and oversaw economic policy during the initial years of the country s independence They expected favourable outcomes from their strategy involving the rapid development of heavy industry by both public and private sectors and based on direct and indirect state intervention rather than the more extreme Soviet style central command system 146 147 The policy of concentrating simultaneously on capital and technology intensive heavy industry and subsidising manual low skill cottage industries was criticised by economist Milton Friedman who thought it would waste capital and labour and retard the development of small manufacturers 148 I cannot decide how much to borrow what shares to issue at what price what wages and bonus to pay and what dividend to give I even need the government s permission for the salary I pay to a senior executive J R D Tata on the Indian regulatory system 1969 145 Since 1965 the use of high yielding varieties of seeds increased fertilisers and improved irrigation facilities collectively contributed to the Green Revolution in India which improved the condition of agriculture by increasing crop productivity improving crop patterns and strengthening forward and backward linkages between agriculture and industry 149 However it has also been criticised as an unsustainable effort resulting in the growth of capitalistic farming ignoring institutional reforms and widening income disparities 150 In 1984 Rajiv Gandhi promised economic liberalization he made V P Singh the finance minister who tried to reduce tax evasion and tax receipts rose due to this crackdown although taxes were lowered This process lost its momentum during the later tenure of Mr Gandhi as his government was marred by scandals Post liberalisation period since 1991 Main articles Economic history of India Economic liberalisation in India and Economic development in India nbsp P V Narasimha Rao nbsp Manmohan SinghEconomic liberalisation in India was initiated in 1991 by Prime Minister P V Narasimha Rao and his then Finance Minister Dr Manmohan Singh The collapse of the Soviet Union which was India s major trading partner and the Gulf War which caused a spike in oil prices resulted in a major balance of payments crisis for India which found itself facing the prospect of defaulting on its loans 151 India asked for a 1 8 billion bailout loan from the International Monetary Fund IMF which in return demanded de regulation 152 In response the Narasimha Rao government including Finance Minister Manmohan Singh initiated economic reforms in 1991 The reforms did away with the Licence Raj reduced tariffs and interest rates and ended many public monopolies allowing automatic approval of foreign direct investment in many sectors 153 Since then the overall thrust of liberalisation has remained the same although no government has tried to take on powerful lobbies such as trade unions and farmers on contentious issues such as reforming labour laws and reducing agricultural subsidies 154 This has been accompanied by increases in life expectancy literacy rates and food security although urban residents have benefited more than rural residents 155 nbsp GDP grows exponentially almost doubling every five years nbsp Indian GDP growth rate from 1985 to 2016 in red compared to that of China in greenFrom 2010 India has risen from ninth largest to the fifth largest economies in the world by nominal GDP in 2019 by surpassing UK France Italy and Brazil 156 India started recovery in 2013 14 when the GDP growth rate accelerated to 6 4 from the previous year s 5 5 The acceleration continued through 2014 15 and 2015 16 with growth rates of 7 5 and 8 0 respectively For the first time since 1990 India grew faster than China which registered 6 9 growth in 2015 needs update However the growth rate subsequently decelerated to 7 1 and 6 6 in 2016 17 and 2017 18 respectively 157 partly because of the disruptive effects of 2016 Indian banknote demonetisation and the Goods and Services Tax India 158 India is ranked 63rd out of 190 countries in the World Bank s 2020 ease of doing business index up 14 points from the last year s 100 and up 37 points in just two years 159 In terms of dealing with construction permits and enforcing contracts it is ranked among the 10 worst in the world while it has a relatively favourable ranking when it comes to protecting minority investors or getting credit 160 The strong efforts taken by the Department of Industrial Policy and Promotion DIPP to boost ease of doing business rankings at the state level is said to affect the overall rankings of India 161 COVID 19 pandemic and aftermath 2020 present Main article Economic impact of the COVID 19 pandemic in India During the COVID 19 pandemic numerous rating agencies downgraded India s GDP predictions for FY21 to negative figures 162 163 signalling a recession in India the most severe since 1979 164 165 The Indian Economy contracted by 6 6 percent which was lower than the estimated 7 3 percent decline 166 In 2022 the ratings agency Fitch Ratings upgraded India s outlook to stable similar to S amp P Global Ratings and Moody s Investors Service s outlooks 167 In the first quarter of financial year 2022 2023 the Indian economy grew by 13 5 168 DataThis article needs to be updated Please help update this article to reflect recent events or newly available information October 2023 The following table shows the main economic indicators in 1980 2022 with IMF staff estimates in 2023 2028 Inflation below 5 is in green 169 The annual unemployment rate is extracted from the World Bank although the International Monetary Fund finds them unreliable 170 Year GDP in Bil US PPP GDP per capita in US PPP GDP in Bil US nominal GDP per capita in US nominal GDP growth real Inflation rate in Percent Unemployment in Percent Government debt in of GDP 1980 371 9 532 0 189 4 271 0 nbsp 6 74 nbsp 11 3 n a n a1981 nbsp 431 5 nbsp 603 2 nbsp 196 5 nbsp 274 7 nbsp 6 01 nbsp 12 7 n a n a1982 nbsp 474 1 nbsp 647 5 nbsp 203 5 nbsp 278 0 nbsp 3 5 nbsp 7 7 n a n a1983 nbsp 528 6 nbsp 705 3 nbsp 222 0 nbsp 296 3 nbsp 7 3 nbsp 12 6 n a n a1984 nbsp 568 6 nbsp 741 4 nbsp 215 6 nbsp 281 1 nbsp 3 8 nbsp 5 2 n a n a1985 nbsp 617 4 nbsp 787 1 nbsp 237 6 nbsp 302 9 nbsp 5 3 nbsp 5 56 171 n a n a1986 nbsp 659 9 nbsp 822 8 nbsp 252 8 nbsp 315 2 nbsp 4 8 nbsp 7 8 172 n a n a1987 nbsp 703 0 nbsp 857 7 nbsp 283 8 nbsp 346 2 nbsp 4 0 nbsp 9 1 n a n a1988 nbsp 797 9 nbsp 952 7 nbsp 299 6 nbsp 357 8 nbsp 10 18 nbsp 7 2 n a n a1989 nbsp 878 5 nbsp 1 027 0 nbsp 301 2 nbsp 352 2 nbsp 5 9 nbsp 4 6 n a n a1990 nbsp 961 8 nbsp 1 101 3 nbsp 326 6 nbsp 374 0 nbsp 5 5 nbsp 11 2 n a n a1991 nbsp 1 004 8 nbsp 1 127 4 nbsp 274 8 nbsp 308 4 nbsp 1 1 nbsp 13 5 5 6 75 3 1992 nbsp 1 084 1 nbsp 1 192 2 nbsp 293 3 nbsp 322 5 nbsp 5 5 nbsp 9 9 nbsp 5 7 nbsp 77 4 1993 nbsp 1 162 5 nbsp 1 253 5 nbsp 284 2 nbsp 306 4 nbsp 4 8 nbsp 7 3 nbsp 5 7 nbsp 77 0 1994 nbsp 1 266 4 nbsp 1 339 2 nbsp 333 0 nbsp 352 2 nbsp 6 7 nbsp 10 3 nbsp 5 7 nbsp 73 5 1995 nbsp 1 390 8 nbsp 1 442 9 nbsp 366 6 nbsp 380 3 nbsp 7 6 nbsp 10 0 nbsp 5 8 nbsp 69 7 1996 nbsp 1 523 2 nbsp 1 550 6 nbsp 399 8 nbsp 407 0 nbsp 7 6 nbsp 9 4 nbsp 5 7 nbsp 66 0 1997 nbsp 1 612 3 nbsp 1 610 8 nbsp 423 2 nbsp 422 8 nbsp 4 1 nbsp 6 8 nbsp 5 6 nbsp 67 8 1998 nbsp 1 731 2 nbsp 1 698 1 nbsp 428 8 nbsp 420 6 nbsp 6 2 nbsp 13 1 nbsp 5 7 nbsp 68 1 1999 nbsp 1 904 2 nbsp 1 834 4 nbsp 466 9 nbsp 449 8 nbsp 8 5 nbsp 5 7 nbsp 5 7 nbsp 70 0 2000 nbsp 2 024 7 nbsp 1 916 3 nbsp 476 6 nbsp 451 1 nbsp 4 0 nbsp 3 8 nbsp 5 6 nbsp 73 6 2001 nbsp 2 172 7 nbsp 2 021 1 nbsp 494 0 nbsp 459 5 nbsp 4 9 nbsp 4 3 nbsp 5 6 nbsp 78 7 2002 nbsp 2 292 8 nbsp 2 097 1 nbsp 524 0 nbsp 479 2 nbsp 3 9 nbsp 4 0 nbsp 5 5 nbsp 82 9 2003 nbsp 2 523 8 nbsp 2 270 6 nbsp 618 4 nbsp 556 3 nbsp 7 9 nbsp 3 9 nbsp 5 6 nbsp 84 4 2004 nbsp 2 795 0 nbsp 2 474 2 nbsp 721 6 nbsp 638 8 nbsp 7 8 nbsp 3 8 nbsp 5 6 nbsp 83 4 2005 nbsp 3 150 3 nbsp 2 745 1 nbsp 834 2 nbsp 726 9 nbsp 9 3 nbsp 4 4 nbsp 5 6 nbsp 81 0 2006 nbsp 3 548 3 nbsp 3 044 5 nbsp 949 1 nbsp 814 4 nbsp 9 3 nbsp 6 7 nbsp 5 6 nbsp 77 2 2007 nbsp 4 001 4 nbsp 3 381 8 nbsp 1 238 7 nbsp 1 046 9 nbsp 10 3 nbsp 6 2 nbsp 5 6 nbsp 74 1 2008 nbsp 4 236 8 nbsp 3 528 7 nbsp 1 224 1 nbsp 1 019 5 nbsp 3 9 nbsp 9 1 nbsp 5 4 nbsp 72 8 2009 nbsp 4 625 5 nbsp 3 798 5 nbsp 1 365 4 nbsp 1 121 2 nbsp 7 9 nbsp 12 3 nbsp 5 5 nbsp 71 5 2010 nbsp 5 161 4 nbsp 4 181 7 nbsp 1 708 5 nbsp 1 384 2 nbsp 8 5 nbsp 10 5 nbsp 5 5 nbsp 66 4 2011 nbsp 5 618 4 nbsp 4 493 7 nbsp 1 823 1 nbsp 1 458 1 nbsp 6 6 nbsp 9 5 nbsp 5 4 nbsp 68 6 2012 nbsp 6 153 2 nbsp 4 861 2 nbsp 1 827 6 nbsp 1 443 9 nbsp 5 5 nbsp 10 0 nbsp 5 4 nbsp 68 0 2013 nbsp 6 477 5 nbsp 5 057 2 nbsp 1 856 7 nbsp 1 449 6 nbsp 6 4 nbsp 9 4 nbsp 5 4 nbsp 67 7 2014 nbsp 6 781 0 nbsp 5 233 9 nbsp 2 039 1 nbsp 1 573 9 nbsp 7 4 nbsp 5 8 nbsp 5 4 nbsp 67 1 2015 nbsp 7 159 8 nbsp 5 464 9 nbsp 2 103 6 nbsp 1 605 6 nbsp 8 0 nbsp 4 9 nbsp 5 4 nbsp 69 0 2016 nbsp 7 735 0 nbsp 5 839 9 nbsp 2 294 8 nbsp 1 732 6 nbsp 8 3 nbsp 4 5 nbsp 5 4 nbsp 68 9 2017 nbsp 8 276 9 nbsp 6 112 1 nbsp 2 702 9 nbsp 1 958 0 nbsp 6 8 nbsp 3 6 nbsp 5 4 nbsp 69 7 2018 nbsp 9 023 0 nbsp 6 590 9 nbsp 2 702 9 nbsp 1 974 4 nbsp 6 5 nbsp 3 4 nbsp 5 3 nbsp 70 4 2019 nbsp 9 540 4 nbsp 6 897 8 nbsp 2 835 6 nbsp 2 050 2 nbsp 4 2 nbsp 4 8 nbsp 5 3 nbsp 75 0 2020 nbsp 9 101 3 nbsp 6 517 8 nbsp 2 671 6 nbsp 1 913 2 nbsp 5 8 nbsp 6 1 nbsp 8 0 nbsp 88 5 2021 nbsp 10 370 8 nbsp 7 355 4 nbsp 3 150 3 nbsp 2 234 3 nbsp 9 1 nbsp 5 5 nbsp 6 0 nbsp 83 7 2022 nbsp 11 900 7 nbsp 8 397 5 nbsp 3 389 7 nbsp 2 391 9 nbsp 7 2 nbsp 6 7 nbsp 7 3 nbsp 81 0 2023 nbsp 13 119 6 nbsp 9 183 4 nbsp 3 732 2 nbsp 2 612 5 nbsp 6 3 nbsp 5 5 nbsp 8 7 nbsp 81 9 2024 nbsp 14 261 2 nbsp 9 891 8 nbsp 4 105 4 nbsp 2 847 6 nbsp 6 3 nbsp 4 6 n a nbsp 82 3 2025 nbsp 15 469 1 nbsp 10 634 6 nbsp 4 511 8 nbsp 3 101 8 nbsp 6 3 nbsp 4 1 n a nbsp 82 2 2026 nbsp 16 765 2 nbsp 11 426 4 nbsp 4 951 6 nbsp 3 374 8 nbsp 6 3 nbsp 4 1 n a nbsp 81 8 2027 nbsp 18 155 7 nbsp 12 270 8 nbsp 5 427 4 nbsp 3 668 2 nbsp 6 3 nbsp 4 0 n a nbsp 81 2 2028 nbsp 19 650 2 nbsp 13 173 3 nbsp 5 944 4 nbsp 3 985 0 nbsp 6 3 nbsp 4 0 n a nbsp 80 5 SectorsAgriculture forest and fishing This article needs to be updated Please help update this article to reflect recent events or newly available information June 2023 Main articles Agriculture in India Forestry in India Animal husbandry in India Fishing in India and Natural resources in India Agriculture and allied sectors like forestry logging and fishing accounted for 18 4 of the GDP 173 the sector employed 51 2 crore persons or 45 5 of the workforce in India are employed in agriculture 174 175 India is major agriculture producing country and has the most arable land in the world followed by the United States 176 However agricultural output lags far behind its potential 177 Agriculture s contribution to GDP has steadily declined from 1951 to 2011 178 yet it is still the country s largest employment provider sector 174 Crop yield per unit area of all crops has grown since 1950 due to the special emphasis placed on agriculture in the five year plans and steady improvements in irrigation technology application of modern agricultural practices and provision of agricultural credit and subsidies since the Green Revolution in India However international comparisons reveal the average yield in India is generally 30 to 50 of the highest average yield in the world 179 The states of Uttar Pradesh Punjab Haryana Madhya Pradesh Andhra Pradesh Telangana Bihar West Bengal Gujarat and Maharashtra are key contributors to Indian agriculture nbsp Amul Dairy Plant at Anand Gujarat was a highly successful co operative started during Operation Flood in the 1970s India receives an average annual rainfall of 1 208 millimetres 47 6 in and a total annual precipitation of 4 000 billion cubic metres with the total utilisable water resources including surface and groundwater amounting to 1 123 billion cubic metres 180 546 820 square kilometres 211 130 sq mi of the land area or about 39 of the total cultivated area is irrigated 181 India s inland water resources and marine resources provide employment to nearly 6 million people in the fisheries sector In 2010 India had the world s sixth largest fishing industry 182 nbsp India exports more than 100 000 tonnes 98 000 long tons 110 000 short tons of processed cashew kernels every year There are more than 600 cashew processing units in Kollam alone 183 India is the largest producer of milk jute and pulses and has the world s second largest cattle population with 170 million animals in 2011 184 It is the second largest producer of rice wheat sugarcane cotton and groundnuts as well as the second largest fruit and vegetable producer accounting for 10 9 and 8 6 of the world fruit and vegetable production respectively India is also the second largest producer and the largest consumer of silk producing 77 000 tonnes 76 000 long tons 85 000 short tons in 2005 185 India is the largest exporter of cashew kernels and cashew nut shell liquid CNSL Foreign exchange earned by the country through the export of cashew kernels during 2011 12 reached 43 9 billion equivalent to 83 billion or US 1 0 billion in 2023 based on statistics from the Cashew Export Promotion Council of India CEPCI 131 000 tonnes 129 000 long tons 144 000 short tons of kernels were exported during 2011 12 186 There are about 600 cashew processing units in Kollam Kerala 183 nbsp Assam is largest tea producer in India nbsp Kodagu is the largest producer of Coffee and Pepper in IndiaIndia s foodgrain production stagnant at approximately 316 megatonnes 311 million long tons 348 million short tons during 2020 21 187 India exports several agriculture products such as Basmati rice wheat cereals spices fresh fruits dry fruits cotton tea coffee milk products and other cash crops to the Asian African and other countries 188 nbsp Sugarcane weighing at a Pravara Sahakari Sakhar Karkhana Ltd in MaharashtraThe low productivity in India is a result of several factors Over regulation of agriculture has increased costs price risks and uncertainty and governmental intervention in labour land and credit are hurting the market Infrastructure such as rural roads electricity ports food storage retail markets and services remain inadequate 189 The average size of land holdings is very small with 70 of holdings being less than one hectare 2 5 acres in size 190 Irrigation facilities are inadequate as revealed by the fact that only 46 of the total cultivable land was irrigated as of 2016 update 181 resulting in farmers still being dependent on rainfall specifically the monsoon season which is often inconsistent and unevenly distributed across the country 191 In an effort to bring an additional 20 000 000 hectares 49 000 000 acres of land under irrigation various schemes have been attempted including the Accelerated Irrigation Benefit Programme AIBP which was provided 800 billion equivalent to 1 2 trillion or US 14 billion in 2023 in the Union Budget 192 Farming incomes are also hampered by lack of food storage and distribution infrastructure a third of India s agricultural production is lost from spoilage 193 Mining resources and chemicals Mining Main articles Mining in India and Iron and steel industry in India nbsp an NLC India mineMining contributed 63 billion 3 of GDP and employed 20 14 million people 5 of the workforce in 2016 194 India s mining industry was the fourth largest producer of minerals in the world by volume and eighth largest producer by value in 2009 195 In 2013 it mined and processed 89 minerals of which four were fuel three were atomic energy minerals and 80 non fuel 196 The public sector accounted for 68 of mineral production by volume in 2011 12 197 India has the world s fourth largest natural resources with the mining sector contributing 11 of the country s industrial GDP and 2 5 of total GDP Nearly 50 of India s mining industry by output value is concentrated in eight states Odisha Rajasthan Chhattisgarh Andhra Pradesh Telangana Jharkhand Madhya Pradesh and Karnataka Another 25 of the output by value comes from offshore oil and gas resources 197 India operated about 3 000 mines in 2010 half of which were coal limestone and iron ore 198 On output value basis India was one of the five largest producers of mica chromite coal lignite iron ore bauxite barite zinc and manganese while being one of the ten largest global producers of many other minerals 195 197 India was the fourth largest producer of steel in 2013 199 and the seventh largest producer of aluminium 200 India s mineral resources are vast 201 However its mining industry has declined contributing 2 3 of its GDP in 2010 compared to 3 in 2000 and employed 2 9 million people a decreasing percentage of its total labour India is a net importer of many minerals including coal India s mining sector decline is because of complex permit regulatory and administrative procedures inadequate infrastructure shortage of capital resources and slow adoption of environmentally sustainable technologies 197 202 Iron and steel nbsp Bokaro Steel Plant BSL alone contributes 45 of SAIL s profit and it produces highly diversified steel portfolio nbsp MSTC Limited Kolkata HQ a Metal trading e commerce companyIndia surpassed Japan as the second largest steel producer in January 2019 203 As per worldsteel India s crude steel production in 2018 was at 106 5 tonnes 104 8 long tons 117 4 short tons 4 9 increase from 101 5 tonnes 99 9 long tons 111 9 short tons in 2017 which means that India overtook Japan as the world s second largest steel production country According to data presented by PIB FY2021 22 there are more than 900 steel plants in India that produce crude steel These are owned by PSUs large scale companies as well as small and medium enterprises SMEs In the year 2021 22 the total capacity of these plants stood at 154 06 million tonnes 204 The total market value of the Indian steel sector stood at US 57 8 billion in 2011 and is predicted to touch US 95 3 billion by 2016 Growth of crude steel production in India has not kept pace with the growth in capacity of production according to the report As per this report steel sector contributes 2 per cent to India s GDP and employs half a million people directly and 2 million people indirectly The Indian steel sector has been vibrant growing at a compounded rate of 6 year on year 205 Petroleum Main article Oil and gas industry in India nbsp Haldia Petrochemicals in Haldia industrial city nbsp MRPL Refinery in MangalorePetroleum products and chemicals are a major contributor to India s industrial GDP and together they contribute over 34 of its export earnings India hosts many oil refinery and petrochemical operations developed with help of Soviet technology such as Barauni Refinery and Gujarat Refinery it also includes the world s largest refinery complex in Jamnagar that processes 1 24 million barrels of crude per day 206 By volume the Indian chemical industry was the third largest producer in Asia and contributed 5 of the country s GDP India is one of the five largest producers of agrochemicals polymers and plastics dyes and various organic and inorganic chemicals 207 Despite being a large producer and exporter India is a net importer of chemicals due to domestic demands 208 India s chemical industry is extremely diversified and estimated at 178 billion 209 Chemicals and fertilizer The chemical industry contributed 163 billion to the economy in FY18 and is expected to reach 300 400 billion by 2025 210 211 The industry employed 17 33 million people 4 of the workforce in 2016 194 nbsp National Fertilizers Vijapur Unit 2 as seen from prilling towerAt present 57 large fertilizer units are manufacturing a wide number of nitrogen fertilizers These include 29 urea producing units and 9 ammonia sulfate producing units as a by product Besides there are 64 small scale producing units of single super phosphate 212 According to the latest data released by the WTO India has emerged as the second largest exporter of agrochemicals in the world The rank was sixth 10 years ago The Indian agrochemical industry fetches valuable trade surplus every year The trade surplus sharply increased from Rs 8 030 crores in 2017 18 to Rs 28 908 crores in the last fiscal India s agrochemicals export has doubled in the last 6 years from 2 6 bn in 2017 18 to 5 4 bn in the last financial year according to the data recently released by Ministry of Commerce It has grown at an impressive CAGR of 13 which is among the highest in the manufacturing sector 213 Millions of farmers in over 130 countries trust Indian agrochemicals for their high quality and affordable prices said an industry observer With the global agrochemicals market estimated at 78 billion predominantly comprising post patent products India is rapidly becoming a preferred global hub for sourcing such agrochemicals To bolster domestic production and reduce imports the Crop Care Federation of India CCFI has recommended specific measures to the Government of India 214 Transportation and telecommunications Transport See also Indian Railways Multiple units of India and Vande Bharat Express nbsp Vande Bharat train nbsp DFCCIL maintains Dedicated freight corridors rail tracks nbsp Navi Mumbai Metro nbsp RapidX trains at depotThe Indian Railways contributes to 3 of the country s gross domestic product GDP and has social obligations pegged at 5 3 Billion annually citation needed Indian Railways revenue has grown at 5 CAGR in the past 5 years but profitability has reduced drastically in the past 4 years due to growing infrastructure and modernization expenses With a workforce of 1 31 million people the IR is also one of the country s largest employers The railways is a major contributor to jobs GDP and mobility citation needed Indian Railways has decided to revise its 2022 23 rolling stock production plan upwards The Ministry s new plan targets the production of 8 429 units for the coming financial year Production for 2022 23 has been raised by 878 units from the earlier planned 7 551 according to the revised targets 215 Indian Railways has targeted to manufacture 475 new Vande Bharat trainsets for the next four years as a part of its modernization plan 216 It is about Rs 40 000 crore 5 billion business opportunity that would also create 15 000 jobs and several spin off benefits 217 Indian Railway s CORE aims to electrify all of its broad gauge network by 31 March 2024 218 The entire electrified mainline rail network in India uses 25 kV AC DC is used only for metros As of July 2023 India currently has 90 of total train tracks fully electrified 219 Under the eleventh Five Year Plan of India 2007 12 the Ministry of Railways started constructing a new Dedicated Freight Corridor DFC in two long routes namely the Eastern and Western freight corridors 220 The two routes cover a total length of 3 260 kilometres 2 030 mi with the Eastern Dedicated Freight Corridor stretching from Ludhiana in Punjab to Dankuni in West Bengal and the Western Dedicated Freight Corridor from Jawaharlal Nehru Port in Mumbai Maharashtra to Dadri in Uttar Pradesh 221 The DFC will generate around 42 000 jobs and provide long term employment to many people in public sector and private sector citation needed India is developing modern mass rapid transit systems to meet present and future urban requirements A modern metro rail system is already in place in the cities of Navi Mumbai Delhi Mumbai Bangalore Kolkata Hyderabad Kochi Gurgaon Jaipur Noida Pune Nagpur Kanpur Ahmedabad and Lucknow Similar mass transit systems are intended for Agra Bhopal Indore Surat Patna Bhubaneswar Tri city Chandigarh Tri city Gwalior Mysore Nashik Prayagraj Varanasi Ranchi Thane and Trivandrum Former Prime Minister Atal Bihari Vajpayee has been credited with success of the metro systems in India and every metro has followed Delhi Metro model generating lot of real estate wealth in India specially in smaller cities like Gurgaon and Noida For Elevated corridor there is no need for land acquisition as pillars are built above Median strip of a road 222 citation needed Land prices in tier II cities such as Lucknow Patna Jaipur Ahmedabad Pune Kochi and Coimbatore have gone up by almost 8 10 percent following the introduction of a metro corridor in these cities an assessment by JLL has said 223 India is also developing modern RRTS system to replace the old MRTS system which will provide connectivity in Delhi Metropolitan Area and Mumbai Metropolitan Region which will serve the suburbs of these big cities at 80 100 km of distance from city center citation needed nbsp Indigenously developed 12 000 hp electric WAG 11 locomotive by RDSOIndia is the fourth largest civil aviation market in the world recording an air traffic of 158 million passengers in 2017 224 225 The market is estimated to have 800 aircraft by 2020 which would account for 4 3 of global volumes 226 and is expected to record annual passenger traffic of 520 million by 2037 225 IATA estimated that aviation contributed 30 billion to India s GDP in 2017 and supported 7 5 million jobs 390 000 directly 570 000 in the value chain and 6 2 million through tourism 225 Civil aviation in India traces its beginnings to 18 February 1911 when Henri Pequet a French aviator carried 6 500 pieces of mail on a Humber biplane from Allahabad present day Prayagraj to Naini 227 Later on 15 October 1932 J R D Tata flew a consignment of mail from Karachi to Juhu Airport His airline later became Air India and was the first Asian airline to cross the Atlantic Ocean as well as first Asian airline to fly jets 228 Telecommunications Main article Telecommunications in India nbsp INSAT 1B satellite broadcasting sector in India is highly dependent on INSAT system The telecommunication sector generated 2 20 trillion US 28 billion in revenue in 2014 15 accounting for 1 94 of total GDP 229 India is the second largest market in the world by number of telephone users both fixed and mobile phones with 1 053 billion subscribers as of 31 August 2016 update It has one of the lowest call tariffs in the world due to fierce competition among telecom operators India has the world s third largest Internet user base As of 31 March 2016 update there were 342 65 million Internet subscribers in the country 230 India s telecommunication industry is the world s second largest by the number of mobile phone smartphone and internet users It is the world s 24th largest oil producer and the third largest oil consumer 231 Industry estimates indicate that there are over 554 million TV consumers in India as of 2012 update 232 India is the largest direct to home DTH television market in the world by number of subscribers As of May 2016 update there were 84 80 million DTH subscribers in the country 233 Defence and energy Defence Main article Defence industry of India nbsp DRDO Advanced Towed Artillery Gun System is exported to countries like ArmeniaWith strength of over 1 3 million active personnel Indian Army is the third largest military force and the largest volunteer army Defence expenditure was pegged at US 70 12 billion for fiscal year 2022 23 and increased 9 8 than previous fiscal year 234 India is the world s second largest arms importer between 2016 and 2020 it accounted for 9 5 of the total global arms imports 235 India exported military hardware worth 159 2 billion US 2 0 billion in the financial year 2022 23 the highest ever and a notable tenfold increase since 2016 17 236 Energy sector Main articles Electricity sector in India and Energy policy of India nbsp an NLC India thermal power plant in Tamil Nadu nbsp An IPHWR 700 reactor undergoing construction in Kakrapar Nuclear Plant started in 1984 nbsp BHEL designed super thermal power plant at Simhadri reduces carbon emission significantlyPrimary energy consumption of India is the third largest after China and US with 5 3 global share in the year 2015 237 Coal and crude oil together account for 85 of the primary energy consumption of India India s oil reserves meet 25 of the country s domestic oil demand 238 239 As of April 2015 update India s total proven crude oil reserves are 763 476 megatonnes 751 418 million long tons 841 588 million short tons while gas reserves stood at 1 490 billion cubic metres 53 trillion cubic feet 240 Oil and natural gas fields are located offshore at Ashoknagar Oil Field Bombay High Krishna Godavari Basin Mangala Area and the Cauvery Delta and onshore mainly in the states of West Bengal Assam Gujarat and Rajasthan India is the fourth largest consumer of oil and net oil imports were nearly 8 2 trillion US 100 billion in 2014 15 240 which had an adverse effect on the country s current account deficit The petroleum industry in India mostly consists of public sector companies such as Oil and Natural Gas Corporation ONGC Hindustan Petroleum Corporation Limited HPCL Bharat Petroleum Corporation Limited BPCL and Indian Oil Corporation Limited IOCL There are some major private Indian companies in the oil sector such as Reliance Industries Limited RIL which operates the world s largest oil refining complex 241 India became the world s third largest producer of electricity in 2013 with a 4 8 global share in electricity generation surpassing Japan and Russia 242 By the end of calendar year 2015 India had an electricity surplus with many power stations idling for want of demand 243 The utility electricity sector had an installed capacity of 303 GW as of May 2016 update of which thermal power contributed 69 8 hydroelectricity 15 2 other sources of renewable energy 13 0 and nuclear power 2 1 244 India meets most of its domestic electricity demand through its 106 gigatonnes 104 billion long tons 117 billion short tons of proven coal reserves 245 India is also rich in certain alternative sources of energy with significant future potential such as solar wind and biofuels jatropha sugarcane India s dwindling uranium reserves stagnated the growth of nuclear energy in the country for many years 246 Recent discoveries in the Tummalapalle belt may be among the top 20 natural uranium reserves worldwide 247 248 249 needs update and an estimated reserve of 846 477 tonnes 833 108 long tons 933 081 short tons of thorium 250 about 25 of world s reserves are expected to fuel the country s ambitious nuclear energy program in the long run The Indo US nuclear deal has also paved the way for India to import uranium from other countries 251 Infrastructure and constructions This article needs to be updated Please help update this article to reflect recent events or newly available information June 2023 Main articles Roads in India Indian Railways Ports in India and Construction industry of India nbsp Paradeep Port the third largest port in India after Mundra Port and Kandla Port with 135MMTA capacityIndia s infrastructure and transport sector contributes about 5 of its GDP India has a road network of over 5 472 144 kilometres 3 400 233 mi as of 31 March 2015 update the second largest road network in the world only behind United States At 1 66 km of roads per square kilometre of land 2 68 miles per square mile the quantitative density of India s road network is higher than that of Japan 0 91 and United States 0 67 and far higher than that of China 0 46 Brazil 0 18 or Russia 0 08 252 Qualitatively India s roads are a mix of modern highways and narrow unpaved roads and are being improved 253 As of 31 March 2015 update 87 05 of Indian roads were paved 252 It is upgrading its infrastructure As of May 2014 update India had completed over 22 600 kilometres 14 000 mi of 4 or 6 lane highways connecting most of its major manufacturing commercial and cultural centres 254 India s road infrastructure carries 60 of freight and 87 of passenger traffic 255 nbsp Nhava Sheva Port is the second largest Container port and fourth largest port in IndiaIndia has a coastline of 7 500 kilometres 4 700 mi with 13 major ports 15 big private ports and 60 operational non major ports which together handle 95 of the country s external trade by volume and 70 by value most of the remainder handled by air 256 Kandla Port New Kandla is the largest public port established in early 1960 s while Mundra is the largest private sea port 257 The airport infrastructure of India includes 125 airports 258 of which 66 airports are licensed to handle both passengers and cargo 259 India has multiple global infrastructure companies such as Adani Group JSW Infrastructure Larsen amp Toubro etc The construction industry contributed 288 billion 13 of GDP and employed 60 42 million people 14 of the workforce in 2016 194 The construction and real estate sector ranks third among the 14 major sectors in terms of direct indirect and induced effects in all sectors of the economy 260 nbsp Indiabulls Blu skyscraperThe real estate sector will provide huge business opportunities employment and big avenues for startup ecosystem The 2023 Union budget of India also focused significantly on infrastructure with nearly 10 trillion direct investment of central government 261 Finance and trade Banking and financial services Main articles Banking in India and Finance in India nbsp Bank of India HQ in BKC nbsp India bonds 30 year 10 year 2 year 1 year 3 monthThe financial services industry contributed 809 billion 37 of GDP and employed 14 17 million people 3 of the workforce in 2016 and the banking sector contributed 407 billion 19 of GDP and employed 5 5 million people 1 of the workforce in 2016 194 The Indian money market is classified into the organised sector comprising private public and foreign owned commercial banks and cooperative banks together known as scheduled banks and the unorganised sector which includes individual or family owned indigenous bankers or money lenders and non banking financial companies 262 The unorganised sector and microcredit are preferred over traditional banks in rural and sub urban areas especially for non productive purposes such as short term loans for ceremonies 263 Prime Minister Indira Gandhi nationalised 14 banks in 1969 followed by six others in 1980 and made it mandatory for banks to provide 40 of their net credit to priority sectors including agriculture small scale industry retail trade and small business to ensure that the banks fulfilled their social and developmental goals Since then the number of bank branches has increased from 8 260 in 1969 to 72 170 in 2007 and the population covered by a branch decreased from 63 800 to 15 000 during the same period The total bank deposits increased from 59 1 billion equivalent to 2 8 trillion or US 35 billion in 2023 in 1970 71 to 38 31 trillion equivalent to 96 trillion or US 1 2 trillion in 2023 in 2008 09 Despite an increase of rural branches from 1 860 or 22 of the total in 1969 to 30 590 or 42 in 2007 only 32 270 of 500 000 villages are served by a scheduled bank 264 265 India s gross domestic savings in 2006 07 as a percentage of GDP stood at a high 32 8 266 More than half of personal savings are invested in physical assets such as land houses cattle and gold 267 The government owned public sector banks hold over 75 of total assets of the banking industry with the private and foreign banks holding 18 2 and 6 5 respectively 268 Since liberalisation the government has approved significant banking reforms While some of these relate to nationalised banks such as reforms encouraging mergers reducing government interference and increasing profitability and competitiveness other reforms have opened the banking and insurance sectors to private and foreign companies 238 269 Retail Main article Retailing in India nbsp World Trade Park Shopping mall in Jaipur nbsp City Centre Mall in KolkataThe retail industry excluding wholesale contributed 793 billion 10 of GDP and employed 35 million people 8 of the workforce in 2020 The industry is the second largest employer in India after agriculture 270 271 272 273 The Indian retail market is estimated to be US 600 billion and one of the top five retail markets in the world by economic value India has one of the fastest growing retail markets in the world 274 275 and is projected to reach 1 3 trillion by 2020 276 277 India has retail market worth 1 17 trillion which contributes over 10 of India s GDP It also has one of the world s fastest growing e commerce markets 278 The e commerce retail market in India was valued at 32 7 billion in 2018 and is expected to reach 71 9 billion by 2022 279 India s retail industry mostly consists of local mom and pop stores owner staffed shops and street vendors Retail supermarkets are expanding with a market share of 4 in 2008 280 In 2012 the government permitted 51 FDI in multi brand retail and 100 FDI in single brand retail However a lack of back end warehouse infrastructure and state level permits and red tape continue to limit growth of organised retail 281 Compliance with over thirty regulations such as signboard licences and anti hoarding measures must be made before a store can open for business There are taxes for moving goods from state to state and even within states 280 According to The Wall Street Journal the lack of infrastructure and efficient retail networks cause a third of India s agriculture produce to be lost from spoilage 193 nbsp Scenic view from Harangi Elephant Camp amp Tree Park in CoorgIndustries Tourism Main article Tourism in India nbsp Munnar a very popular hill station in Kerala nbsp Valley of Flowers National Park a UNESCO world heritage siteThe World Travel amp Tourism Council calculated that tourism generated 15 24 trillion US 190 billion or 9 4 of the nation s GDP in 2017 and supported 41 622 million jobs 8 of its total employment The sector is predicted to grow at an annual rate of 6 9 to 32 05 trillion US 400 billion by 2028 9 9 of GDP 282 Over 10 million foreign tourists arrived in India in 2017 compared to 8 89 million in 2016 recording a growth of 15 6 283 The tourism industry contributes about 9 2 of India s GDP and employs over 42 million people 284 India earned 21 07 billion in foreign exchange from tourism receipts in 2015 285 International tourism to India has seen a steady growth from 2 37 million arrivals in 1997 to 8 03 million arrivals in 2015 Bangladesh is the largest source of international tourists to India while European Union nations and Japan are other major sources of international tourists 286 287 Less than 10 of international tourists visit the Taj Mahal with the majority visiting other cultural thematic and holiday circuits 288 Over 12 million Indian citizens take international trips each year for tourism while domestic tourism within India adds about 740 million Indian travellers 286 India has a fast growing medical tourism sector of its health care economy offering low cost health services and long term care 289 290 In October 2015 the medical tourism sector was estimated to be worth US 3 billion It is projected to grow to 7 8 billion by 2020 291 In 2014 184 298 foreign patients traveled to India to seek medical treatment 292 Films entertainment and music industry Main article Cinema of India The Indian cinema industry is expected to garner a revenue of around Rs 16 198 crore by 2026 of which Rs 15 849 would be Box office revenue and the rest Rs 349 crore from advertising the report added 293 India s Recorded Music industry which is a key sub segment is making steady progress at a CAGR of 13 6 percent thanks to streaming models 293 Security markets nbsp The National Stock Exchange of India NSE is the biggest stock exchange in India by trading volume as 96 trading occurs in NSE nbsp Bombay Stock Exchange in Mumbai which was Asia s first stock exchange 294 The development of Indian security markets began with the launch of the Bombay Stock Exchange BSE in July 1875 and the Ahmedabad Stock Exchange in 1894 Since then 22 other exchanges have traded in Indian cities In 2014 India s stock exchange market became the 10th largest in the world by market capitalisation just above those of South Korea and Australia 295 India s two major stock exchanges BSE and the National Stock Exchange of India had a market capitalisation of US 1 71 trillion and US 1 68 trillion as of February 2015 update according to the World Federation of Exchanges which grew to 3 36 trillion and 3 31 trillion respectively by September 2021 296 297 The initial public offering IPO market in India has been small compared to NYSE and NASDAQ raising US 300 million in 2013 and US 1 4 billion in 2012 Ernst amp Young stated 298 that the low IPO activity reflects market conditions slow government approval processes and complex regulations Before 2013 Indian companies were not allowed to list their securities internationally without first completing an IPO in India In 2013 these security laws were reformed and Indian companies can now choose where they want to list first overseas domestically or both concurrently 299 Further security laws have been revised to ease overseas listings of already listed companies to increase liquidity for private equity and international investors in Indian companies 298 Foreign trade and investmentFurther information Globalisation in India nbsp A map showing the global distribution of Indian exports in 2006 as a percentage of the top market US at 20 9 billion Foreign trade Main article Foreign trade of India Further information List of the largest trading partners of India nbsp nbsp India s exports top and imports bottom by value in 2013 14 India s foreign trade by year Year Exports in USD billion Imports in USD billion Trade Deficit in USD billion 2022 300 458 3 725 4 267 22021 420 612 1922020 314 31 467 19 158 882019 330 07 514 07 1842018 303 52 465 58 162 052017 275 8 384 3 108 52016 262 3 381 118 72015 310 3 447 9 137 62014 318 2 462 9 144 72013 313 2 467 5 154 32012 298 4 500 4 202 02011 299 4 461 4 162 02010 201 1 327 0 125 92009 168 2 274 3 106 12008 176 4 305 5 129 12007 112 0 100 9 11 12006 76 23 113 1 36 872005 69 18 89 33 20 152004 57 24 74 15 16 912003 48 3 61 6 13 32002 44 5 53 8 9 32001 42 5 54 5 12 02000 43 1 60 8 17 71999 36 3 50 2 13 9Until the liberalisation of 1991 India was largely and intentionally isolated from world markets to protect its economy and to achieve self reliance Foreign trade was subject to import tariffs export taxes and quantitative restrictions while foreign direct investment FDI was restricted by upper limit equity participation restrictions on technology transfer export obligations and government approvals these approvals were needed for nearly 60 of new FDI in the industrial sector The restrictions ensured that FDI averaged only around 200 million annually between 1985 and 1991 a large percentage of the capital flows consisted of foreign aid commercial borrowing and deposits of non resident Indians 301 India s exports were stagnant for the first 15 years after independence due to general neglect of trade policy by the government of that period imports in the same period with early industrialisation consisted predominantly of machinery raw materials and consumer goods 302 Since liberalisation the value of India s international trade has increased sharply 303 with the contribution of total trade in goods and services to the GDP rising from 16 in 1990 91 to 47 in 2009 10 304 305 Foreign trade accounted for 48 8 of India s GDP in 2015 306 Globally India accounts for 1 44 of exports and 2 12 of imports for merchandise trade and 3 34 of exports and 3 31 of imports for commercial services trade 305 India s major trading partners are the European Union China United States and United Arab Emirates 307 In 2006 07 major export commodities included engineering goods petroleum products chemicals and pharmaceuticals gems and jewellery textiles and garments agricultural products iron ore and other minerals Major import commodities included crude oil and related products machinery electronic goods gold and silver 308 In November 2010 exports increased 22 3 year on year to 851 billion equivalent to 1 9 trillion or US 24 billion in 2023 while imports were up 7 5 at 1 25 trillion equivalent to 2 8 trillion or US 35 billion in 2023 The trade deficit for the same month dropped from 469 billion equivalent to 1 2 trillion or US 15 billion in 2023 in 2009 to 401 billion equivalent to 900 billion or US 11 billion in 2023 in 2010 309 India is a founding member of General Agreement on Tariffs and Trade GATT and its successor the WTO While participating actively in its general council meetings India has been crucial in voicing the concerns of the developing world For instance India has continued its opposition to the inclusion of labour environmental issues and other non tariff barriers to trade in WTO policies 310 India secured 43rd place in competitiveness index 311 Balance of payments nbsp Cumulative current account balance 1980 2008 based on IMF dataSince independence India s balance of payments on its current account has been negative Since economic liberalisation in the 1990s precipitated by a balance of payment crisis India s exports rose consistently covering 80 3 of its imports in 2002 03 up from 66 2 in 1990 91 312 However the global economic slump followed by a general deceleration in world trade saw the exports as a percentage of imports drop to 61 4 in 2008 09 313 India s growing oil import bill is seen as the main driver behind the large current account deficit 314 which rose to 118 7 billion or 11 11 of GDP in 2008 09 315 Between January and October 2010 India imported 82 1 billion worth of crude oil 314 The Indian economy has run a trade deficit every year from 2002 to 2012 with a merchandise trade deficit of US 189 billion in 2011 12 316 Its trade with China has the largest deficit about 31 billion in 2013 317 India s reliance on external assistance and concessional debt has decreased since liberalisation of the economy and the debt service ratio decreased from 35 3 in 1990 91 to 4 4 in 2008 09 318 In India external commercial borrowings ECBs or commercial loans from non resident lenders are being permitted by the government for providing an additional source of funds to Indian corporates The Ministry of Finance monitors and regulates them through ECB policy guidelines issued by the Reserve Bank of India RBI under the Foreign Exchange Management Act of 1999 319 India s foreign exchange reserves have steadily risen from 5 8 billion in March 1991 to 38 832 21 billion US 540 billion in July 2020 320 321 In 2012 United Kingdom announced an end to all financial aid to India citing the growth and robustness of Indian economy 322 323 India s current account deficit reached an all time high in 2013 324 India has historically funded its current account deficit through borrowings by companies in the overseas markets or remittances by non resident Indians and portfolio inflows From April 2016 to January 2017 RBI data showed that for the first time since 1991 India was funding its deficit through foreign direct investment inflows The Economic Times noted that the development was a sign of rising confidence among long term investors in Prime Minister Narendra Modi s ability to strengthen the country s economic foundation for sustained growth 325 Foreign direct investment This section needs to be updated Please help update this article to reflect recent events or newly available information October 2015 Main article Foreign direct investment in India Share of top five investing countries in FDI inflows 2000 2010 326 Rank Country Inflows million US Inflows 1 Mauritius 50 164 42 002 Singapore 11 275 9 003 US 8 914 7 004 UK 6 158 5 005 Netherlands 4 968 4 00As the third largest economy in the world in PPP terms India has attracted foreign direct investment FDI 327 During the year 2011 FDI inflow into India stood at 36 5 billion 51 1 higher than the 2010 figure of 24 15 billion India has strengths in telecommunication information technology and other significant areas such as auto components chemicals apparels pharmaceuticals and jewellery Despite a surge in foreign investments rigid FDI policies 328 were a significant hindrance Over time India has adopted a number of FDI reforms 327 India has a large pool of skilled managerial and technical expertise The size of the middle class population stands at 300 million and represents a growing consumer market 329 India liberalised its FDI policy in 2005 allowing up to a 100 FDI stake in ventures Industrial policy reforms have substantially reduced industrial licensing requirements removed restrictions on expansion and facilitated easy access to foreign technology and investment The upward growth curve of the real estate sector owes some credit to a booming economy and liberalised FDI regime In March 2005 the government amended the rules to allow 100 FDI in the construction sector including built up infrastructure and construction development projects comprising housing commercial premises hospitals educational institutions recreational facilities and city and regional level infrastructure 330 Between 2012 and 2014 India extended these reforms to defence telecom oil retail aviation and other sectors 331 332 From 2000 to 2010 the country attracted 178 billion as FDI 333 The inordinately high investment from Mauritius is due to routing of international funds through the country given significant tax advantages double taxation is avoided due to a tax treaty between India and Mauritius and Mauritius is a capital gains tax haven effectively creating a zero taxation FDI channel 334 FDI accounted for 2 1 of India s GDP in 2015 306 As the government has eased 87 foreign investment direct rules across 21 sectors in the last three years FDI inflows hit 60 1 billion between 2016 and 2017 in India 335 336 Outflows Since 2000 Indian companies have expanded overseas investing FDI and creating jobs outside India From 2006 to 2010 FDI by Indian companies outside India amounted to 1 34 per cent of its GDP 337 Indian companies have deployed FDI and started operations in United States 338 Europe and Africa 339 The Indian conglomerate Tata Group is United Kingdom s largest manufacturer and private sector employer 340 341 Remittances Main article Remittances to India In 2015 a total of US 68 91 billion was made in remittances to India from other countries and a total of US 8 476 billion was made in remittances by foreign workers in India to their home countries UAE US and Saudi Arabia were the top sources of remittances to India while Bangladesh Pakistan and Nepal were the top recipients of remittances from India 342 Remittances to India accounted for 3 32 of the country s GDP in 2015 306 Mergers and acquisitions Between 1985 and 2018 20 846 deals have been announced in into inbound and out of outbound India This cumulates to a value of US 618 billion In terms of value 2010 has been the most active year with deals worth almost 60 bil USD Most deals have been conducted in 2007 1 510 343 Here is a list of the top 10 deals with Indian companies participating Acquiror Name Acquiror Mid Industry Acquiror Nation Target Name Target Mid Industry Target Nation Value of Transaction mil Petrol Complex Pte Ltd Oil amp Gas Singapore Essar Oil Ltd Oil amp Gas India 12 907 25Vodafone Grp Plc Wireless United Kingdom Hutchison Essar Ltd Telecommunications Services India 12 748 00Vodafone Grp PLC Vodafone Asts Wireless India Idea Cellular Ltd Mobile Bus Wireless India 11 627 32Bharti Airtel Ltd Wireless India MTN Group Ltd Wireless South Africa 11 387 52Bharti Airtel Ltd Wireless India Zain Africa BV Wireless Nigeria 10 700 00BP PLC Oil amp Gas United Kingdom Reliance Industries Ltd 21 Oil Oil amp Gas India 9 000 00MTN Group Ltd Wireless South Africa Bharti Airtel Ltd Wireless India 8 775 09Shareholders Other Financials India Reliance Inds Ltd Telecom Bus Telecommunications Services India 8 063 01Oil amp Natural Gas Corp Ltd Oil amp Gas India Hindustan Petro Corp Ltd Petrochemicals India 5 784 20Reliance Commun Ventures Ltd Telecommunications Services India Reliance Infocomm Ltd Telecommunications Services India 5 577 18CurrencyMain articles Indian rupee and Reserve Bank of India nbsp The Reserve Bank of India s headquarters in Mumbai India EXCHANGE RATES Year INR per US annual average 344 INR per Pound annual average 345 1947 3 31 13 331950 4 76 1967 7 50 17 761975 9 4058 1980 7 88 1985 12 364 1987 21 181990 17 4992 31 071995 32 4198 51 172000 44 9401 67 992005 44 1000 80 152010 45 7393 70 652015 64 05 98 01012016 67 09 90 722017 64 14 87 562018 69 71 98 512019 70 394 95 062020 72 97 100 052021 74 98 101 56The Indian rupee is the only legal tender in India and is also accepted as legal tender in neighbouring Nepal and Bhutan both of which peg their currency to that of the Indian rupee The rupee previously was divided into 100 paise which no longer exist The highest denomination banknote is the 2 000 note until 30 September 2023 after which it will be scrapped and 500 note will become the highest denomination the lowest denomination coin in circulation is the 1 coin 347 In 2017 demonetisation was announced in which 500 and 1000 notes were withdrawn and new 500 notes were issued India s monetary system is managed by the Reserve Bank of India RBI the country s central bank 348 Established on 1 April 1935 and nationalised in 1949 the RBI serves as the nation s monetary authority regulator and supervisor of the monetary system banker to the government custodian of foreign exchange reserves and as an issuer of currency It is governed by a central board of directors headed by a governor who is appointed by the Government of India 349 The benchmark interest rates are set by the Monetary Policy Committee The rupee was linked to the British pound from 1927 to 1946 and then to US dollar until 1975 through a fixed exchange rate It was devalued in September 1975 and the system of fixed par rate was replaced with a basket of four major international currencies the British pound US dollar the Japanese yen and the Deutsche Mark 350 In 1991 after the collapse of its largest trading partner the Soviet Union India faced the major foreign exchange crisis and the rupee was devalued by around 19 in two stages on 1 and 2 July In 1992 a Liberalized Exchange Rate Mechanism LERMS was introduced Under LERMS exporters had to surrender 40 percent of their for, wikipedia, wiki, book, books, library,

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