Economy of India

TheEconomy ofIndiais theseventh-largestin the world bynominal GDPand thethird-largestby purchasing power parity(PPP).[27]The country classified asNewly Industrialized Country, one of theG-20 major economies, a member ofBRICSand adeveloping economywith approximately 7% average growth rate for the last two decades.[28]India's economy became the world's fastest growing major economyfrom the last quarter of 2014, replacing China's.[29]

The long-term growth prospective of the Indian economy is moderately positive due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy,[30]The Indian economy has the potential to become the world's3rd-largest Economyby next decade, and one of thelargest economiesby mid-century.[31][32][33].And the outlook for short-term growth prospective is also good as according to IMF, the Indian economy is the "bright spot" in the global landscape,[34]India also toppedWorld Banks growth outlook for the year 2015-16 for the first time with economy grown 7.3% in 2014-15 & expected to grow at 7.5-8.3% in 2015-16.[35]

India has the one of fastest growingservice sectorsin the world with annual growth rate of above 9% since 2001, which contributed to 57% of GDP in 2012-13.[36]India has capitalized its economy based on its large educated English-speaking population to become a major exporter ofITservices,BPO services, andsoftwareservices with $167.0 billion worth of service exports in 2013-14. It is also the fastest-growing part of the economy.[6]The IT industry continues to be the largest private sector employer in India.[37][38]India is also the fourth largest start-up hub in the world with over 3,100 technology start-ups in 2014-15[39]Theagricultural sectoris the largest employer in India's economy but contributes to a declining share of its GDP (17% in 2013-14). Indiaranks secondworldwide in farm output.[5]TheIndustrysector has held a constant share of its economic contribution(26% of GDP in 2013-14).[40]The Indian auto industry is one of the largest in the world with an annual production of 21.48 million vehicles in FY 2013-14.[41]India has $600 billion worth ofretail marketin 2015 and one of world's fastest growing E-Commerce markets.[42][43]

India's two major stock exchanges,Bombay Stock ExchangeandNational Stock Exchange of India, had a market capitalization of US$1.71 trillion and US$1.68 trillion respectively as of Feb 2015, which ranks11th & 12 largestin the world respectively according to the World Federation of Exchanges.[44]India also home to world's third largest Billionaires pool with 97 billionaires in 2014 and fourth largest number of ultra-high-net-worth households that have more than 100 million dollars.[45][46]

India is a member of theCommonwealth of Nations ,theSouth Asian Association for Regional Cooperation ,theG20,theInternational Monetary Fund, theWorld Bank, theWorld Trade Organization, theAsian Infrastructure Investment Bank ,theUnited Nationsand theNew Development BRICS Bank.

Currency

Indian rupee(INR) () = 100Paise

Fiscal year

1 April 31 March

Trade organizations

WTO,SAFTA,BRICS,G-20and others

Statistics

GDP

$2.308 trillion (Nominal, April 2015)[3]$7.996 trillion (PPP, April 2015)[3]

GDP rank

7th(Nominal) /3rd(PPP)

GDP growth

7.3% (2014-15)[4]

GDP per capita

$1,808 (Nominal:131th; 2015)[3]$6,265 (PPP:121th; 2015)[3]

GDP by sector

Agriculture: 17%Industry: 26%Services: 57% (2013-14)[5][6]

Inflation(CPI)

CPI:5.01%WPI:-2.36%[7](May, 2015)

Population belowpoverty line

23.6%, 276 million (2011, World Bank, based on 2005 ICP PPP)[8]21.9% (2012, Reserve Bank of India),[9]21.9% (2012, United Nation's Millennium Development Goal (MGD) programme)[1]

Gini coefficient

33.9 (2012 est.)[10]

Labour force

502.3 million (2014 est.)

Labour force by occupation

Agriculture: 49%Industry: 20%Services: 31% (2012 est.)

Unemployment

3% Urban2% RuralTotal=10.8 million(2013, NSSO method)[11]

Average gross salary

$1.46 per hour ($3,036.8 yearly in 2010);[12]GNI per capita: $1,631 yearly per person (2014);[13]Average household income: $6,671 yearly (2010)[14]

Main industries

software, petroleum products,chemicals,pharmaceuticals,agriculture, textiles, steel, transportation equipment,machinery,leather, cement, mining, construction[15][16]

Ease-of-doing-business rank

142[17](2015)

External

Exports

$313.2 billion: merchandise exports$150.9 billion: services exports$464.2 billion: Total (2013)[18]

Export goods

software,petrochemicals,agricultureproducts,jewellery, engineering goods,[19]pharmaceuticals,textiles,chemicals,transportation,oresand other commodities[16]

Main export partners

European Union16.7%(2013)[18]United States12.5%United Arab Emirates10.1%China4.9%Singapore4.2%

Imports

$466billion: merchandise imports$124.6billion: services imports$590.6billion: Total (2013)[18]

Import goods

crude oil, gold andprecious stones, electronics, engineering goods,[19]chemicals,plastics,coaland ores, iron and steel,vegetable oiland other commodities[16]

Main import partners

China11.1% (2013[18])European Union10.6%Saudi Arabia7.9%United Arab Emirates7.1%Switzerland5.3%

FDIstock

Inflows: $223.7billionOutflows: $54.6billion (2009-2013)[20]

Public finances

Public debt

64.9% of GDP (2014)[21]

Budget deficit

4.1% of GDP (201415)[22]

Revenues

27.5 trillion(US$440billion) (2015,IMF)[23]

Expenses

37.6 trillion(US$600billion) (2015,IMF)[23]

Economicaid

$2.43billion (2013)[24]

Credit rating

BBB- (Domestic)BBB- (Foreign)BBB+ (T&C Assessment)Outlook: Stable(Standard & Poor's)[25]

Foreign reserves

$355.2billion (as of 26 June 2015)[26]

Major Contributors to the Indian EconomyThree major sectors contribute to the Indian economy and the GDP of the country. These are: (i) agriculture - which includes crops, milk, animal husbandry, fishing, forestry and some other activities. (ii) industry - which includes several manufacturing sub-sectors, and (iii) services - which includes retail, construction, software, communication, IT, banking, healthcare and other economic activities.Agriculture -In agriculture production, India ranks second in the world. Agriculture and related activities accounts for about 18% of the total GDP and also employ approximately 50% of the total workforce of the country. The agriculture sector's contribution to the economy has been increasing with every financial year. In the financial year 2013-14, food grain production in the country stood at 264 million tones. .Industry -Industry contributes about 26% of the GDP and 22% of the total workforce in India is associated with industry sector. There are many sub-sectors in industry which generate revenue for this sector such as petroleum, engineering, pharmaceuticals, mining, textile and many more Services- The Indian service sectors account for about 60% of the total GDP. Information technology (IT), IT enabled services (ITeS) and e-commerce has led to the growth of this sector. The services sector has also attracted the highest amount of foreign equity with the government's foreign direct investment (FDI) policies. ...Challenges before Indian economy:

Population explosion:The rising population is eating into the success of India. According to 2011 census, the population of India has crossed one billion and is growing at a rate of 2.11% approximately. Such a vast population puts lot of stress on economic infrastructure of the nation. Thus India has to control its burgeoning population.

Poverty:As per records of National Planning Commission, 36 corer people were living below the poverty line in India in 2012.

Unemployment:The increasing population is pressing hard on economic resources as well as job opportunities. Indian government has started various schemes such as Jawahar Rozgar Yojna, and Self Employment Scheme for Educated Unemployed Youth (SEEUY). But these are proving to be a drop in an ocean.

Rural Urban Divide:It is said that India lies in villages. Even today when there is lot of talk about migration to cities, 70% of the Indian population still lives in villages. There is a very stark difference in the pace of rural and urban growth. Unless there isn't a balanced development Indian economy cannot grow.

IndiaPakistan relations

Relations between India and Pakistanhave been complex due to a number of historical and political events. Relations between the two states have been defined by the violentpartition of British Indiain 1947, theKashmir conflictand the numerousmilitary conflictsfought between the two nations. Consequently, even though the twoSouth Asiannations sharelinguistic, cultural, geographic, and economic links, their relationship has been plagued by hostility and suspicion.

After the dissolution of theBritish Rajin 1947, two new sovereign nations were formedtheDominion of Indiaand theDominion of Pakistan. The subsequent partition of the former British India displaced up to 12.5 million people, with estimates of loss of life varying from several hundred thousand to 1 million.[1]Indiaemerged as asecular nationwith aHindu majoritypopulation and a largeMuslim minoritywhilePakistanwas established as anIslamic republicwith an overwhelmingMuslim majoritypopulation;[2][3]although it's constitution guarantees freedom of religion to people of all faiths.[4]

Soon after their independence, India and Pakistan established diplomatic relations but the violent partition and numerous territorial claims would overshadow their relationship. Since their independence, the two countries have foughtthree major wars, oneundeclared warand have been involved in numerous armed skirmishes and military standoffs. TheKashmir conflictis the main centre-point of all of these conflicts with the exception of theIndo-Pakistan War of 1971andBangladesh Liberation War, which resulted in the secession ofEast Pakistan(nowBangladesh).

There have been numerous attempts to improve the relationshipnotably, theShimla summit, theAgra summitand theLahore summit. Since the early 1980s, relations between the two nations soured particularly after theSachem conflict, the intensification ofKashmir insurgencyin 1989,Indianand Pakistaninuclear tests in 1998 and the 1999Kargil war. Certainconfidence-building measures such as the 2003 ceasefire agreement and theDelhiLahore Busservice were successful in deescalating tensions. However, these efforts have been impeded by periodic terrorist attacks. The2001 Indian Parliament attackalmost brought the two nations to thebrink of a nuclear war. The2007 Samjhauta Express bombings, which killed 68 civilians (most of whom were Pakistani), was also a crucial point in relations. Additionally, the2008 Mumbai attackscarried out by Pakistani militants[5]resulted in asevere blowto the ongoing India-Pakistan peace talks.

According to a 2013BBCWorld Service Poll, 11% of Indians view Pakistan's influence positively, with 45% expressing a negative view, while 19% of Pakistanis view India's influence positively, with 54% expressing a negative view.[6]Since the election of new government in Pakistan in mid-2013, significant steps are being taken to improve relations, in particular the consensus on the agreement of Non-Discriminatory Market Access on Reciprocal Basis (NDMARB) status for each other, which will liberalize trade.[7]

Country comparison

India

Pakistan

Population

1,210,193,422[81]

170,600,000

Area

3,287,240km (1,269,210 sq mi)

796,095km (307,374 sq mi)

Population density

382/km (922/sq mi)

214.3/km (555/sq mi)

Capital

New Delhi

Islamabad

Largest city

Mumbai

Karachi

Government

Federal republic,Parliamentary democracy

Islamic Parliamentary Republic

Official languages

Hindi, English and20 other official languages

Urdu, English

Main religions

80.5%Hinduism, 13.4%Islam, 2.3% Christianity, 1.9%Sikhism, 0.8%Buddhism, 0.4%Jainism[82]

95-98%Islam(80-95%Sunni, 5-20%Shi'a), 1.6% Christianity, 1.6%Hinduism, others

GDP (nominal)

$2.048 trillion ($1,626 per capita)

$236.518 billion ($1,295 per capita)

GDP (PPP)

$7.277 trillion ($5,777 per capita)

$855 billion ($4,699 per capita)

Military expenditures

$36.03 billion (1.83% of GDP)

$5.1 billion (2.8% of GDP)

MAJOR ITEMS OF EXPORTS & IMPORTS

The important items of export to this region are textiles and ready made garments, engineering goods such as bicycles and components thereof, mopeds, diesel engines, automotive components, hand tools etc., chemical and allied items like fine chemicals, dye and dye intermediates, tyres and tubes, rubber gloves. Besides, India also exports handicrafts items, sports goods, electronic items, jute, shellac, tea and spices to Latin America.

Indias major imports from the region are iron & steel and their products, non-ferrous metals, crude minerals, chemicals, PVC, pulp & paper waste, raw wool etc.

INDIA BREIF ECONOMIC OVERVIEW

Major Industries of India

Food Processing

Mines

Gems and Jewelry Oil and Gas

Heavy Industry Pharmaceuticals

Steel

Textiles

Source: Department of Commerce: System on Foreign Trade Performance Analysis (FTPA)

Major Service Sector

Information Technology Media and Entertainment

Insurance Retailing and tourism

Source: Department of Commerce: System on Foreign Trade Performance Analysis (FTPA)

India Top 5 Commodities of Exports

Rank Commodity %share

1 Petroleum (crude & products) 21.09

2 Transport equipments 10.29

3 Gems & jewelers 5.30

4 Machinery and instruments 5.02

5 Manufactures of metals 4.93

Source: Department of Commerce: System on Foreign Trade Performance Analysis (FTPA)

Top Commodities of Indian import

Rank Commodity %share

1 Petroleum, crude & products 35.94

2 Gold 12.00

3 Perls prcus semiprcs stones 7.63

4 Machry excpt elec & electronic 6.22

5 Electronic goods 6.15

6 Coal,coke & briquittes etc. 3.16

7 ORGANIC CHEMICALS 2.80

8 METALIFERS ORES & METAL SCRAP 2.74

PAKISTAN AND TRADE GATE

Overall Guest mated Informal Trade PAKISTAN AND INDIA

S. No.

Sectors

(Rs. Millions)

1

Fruits and vegetables

540.0

2

Pharmaceutical products

5940

3

Textile

370840

4

Spices (includes tea and spices)

960

5

Tobacco items

4440

6

Automobile

26840

7

Cosmetic items

4800

8

Herbel medicine

110

9

Jewelry

8796.5

Total

423,266.9