Economy of India

The Economy of India is the seventh-largest in the world by nominal

GDP and the third-largest by purchasing power parity (PPP).[27] The country
classified as Newly Industrialized Country, one of theG-20 major
economies, a member of BRICS and a developing economy with
approximately 7% average growth rate for the last two decades. [28] India's
economy became the world's fastest growing major economy from 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 Economy by next decade, and one of the largest
economies by 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 topped World 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 growing service sectors in 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
of IT services, BPO services, and software services 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] The agricultural
sector is the largest employer in India's economy but contributes to a
declining share of its GDP (17% in 2013-14). India ranks second worldwide
in farm output. [5] The Industry sector 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 of retail market in
2015 and one of world's fastest growing E-Commerce markets. [42][43]

India's two major stock exchanges, Bombay Stock Exchange and National
Stock Exchange of India, had a market capitalization of US$1.71 trillion and
US$1.68 trillion respectively as of Feb 2015, which ranks 11th & 12
largest in 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 the Commonwealth of Nations ,the South Asian
Association for Regional Cooperation ,the G20,the International Monetary
Fund, the World Bank, the World Trade Organization, the Asian Infrastructure
Investment Bank ,the United Nations and the New Development BRICS Bank.

Currency

Indian rupee (INR) () = 100 Paise

Fiscal year

1 April 31 March

Trade organizations

WTO, SAFTA, BRICS, G-20 and 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% Urban
2% Rural
Total=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
$313.2 billion: merchandise exports

Exports

$150.9 billion: services exports

$464.2 billion: Total (2013)[18]
Export goods

software, petrochemicals, agriculture products, jewellery, engineering goods,

[19]

Main export partners

pharmaceuticals, textiles, chemicals,transportation, ores and other commodities[16]

European Union 16.7%(2013)[18]
United States 12.5%
United Arab Emirates 10.1%

China 4.9%
Singapore 4.2%
Imports

$466 billion: merchandise imports

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

Import goods

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

Main import partners

China 11.1% (2013[18])

European Union 10.6%
Saudi Arabia 7.9%
United Arab Emirates 7.1%
Switzerland 5.3%

FDI stock

Inflows: $223.7 billion

Outflows: $54.6 billion (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$440 billion) (2015,IMF)[23]

Expenses

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

Economic aid
Credit rating

$2.43 billion (2013)[24]

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

Foreign reserves

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

Major Contributors to the Indian Economy

Three 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 subsectors 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 ecommerce 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 Pakistan have been complex due to a
number of historical and political events. Relations between the two states
have been defined by the violent partition of British India in 1947,
the Kashmir conflict and the numerous military conflictsfought between the
two nations. Consequently, even though the two South Asian nations
share linguistic, cultural, geographic, and economic links, their relationship
has been plagued by hostility and suspicion.
After the dissolution of the British Raj in 1947, two new sovereign nations
were formedthe Dominion of India and the Dominion 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] India emerged as a secular nation with a Hindu
majority population and a large Muslim minority while Pakistan was
established as an Islamic republic with an overwhelming Muslim

majority population;[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 fought three major wars, one undeclared war and have been involved
in numerous armed skirmishes and military standoffs. The Kashmir
conflict is the main centre-point of all of these conflicts with the exception of
the Indo-Pakistan War of 1971 and Bangladesh Liberation War, which
resulted in the secession of East Pakistan (now Bangladesh).
There have been numerous attempts to improve the relationshipnotably,
the Shimla summit, the Agra summit and the Lahore summit. Since the
early 1980s, relations between the two nations soured particularly after
the Sachem conflict, the intensification of Kashmir insurgency in
1989, Indian and Pakistani nuclear tests in 1998 and the 1999 Kargil war.
Certain confidence-building measures such as the 2003 ceasefire
agreement and the DelhiLahore Bus service were successful in
deescalating tensions. However, these efforts have been impeded by
periodic terrorist attacks. The 2001 Indian Parliament attack almost brought
the two nations to the brink of a nuclear war. The 2007 Samjhauta Express
bombings, which killed 68 civilians (most of whom were Pakistani), was
also a crucial point in relations. Additionally, the 2008 Mumbai
attacks carried out by Pakistani militants[5] resulted in a severe blow to the
ongoing India-Pakistan peace talks.
According to a 2013 BBC World 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 mid2013, 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

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

796,095 km (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

Official languages

Hindi, English and 20 other official

languages

80.5% Hinduism, 13.4% Islam, 2.3%

Main religions

Christianity, 1.9% Sikhism, 0.8% Buddhism,

0.4% Jainism[82]

Islamic Parliamentary Republic

Urdu, English

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.
1
2
3
4
5

Sectors
Fruits and vegetables
Pharmaceutical products
Textile
Spices (includes tea and
spices)
Tobacco items

(Rs. Millions)
540.0
5940
370840
960
4440

6
7
8
9
Total

Automobile
Cosmetic items
Herbel medicine
Jewelry
423,266.9

26840
4800
110
8796.5