India: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
India is amongst the world's 10 largest economies. The average GNP growth rate was 9.4% in average over the period 2006-07. This growth rate dropped during the global recession, the crisis affected India by the increase of risk aversion, a withdrawal of foreign capital and the drop of global demand. However, India was a country that quickly got out of the crisis, its growth was stimulated by private consumption and by the state's expenditures. From 5.7% in 2009, the growth has jumped up and it is expected to reach 10% in 2010 according to the estimations.
The government has established as its priorities to continue the reforms that will allow to sustain the growth, to modernize the economic structure and to fight against poverty. Programs concerning jobs, health, education, infrastructures and rural communities have also been announced. The pursuit of a re-balance in public finance is also projected, the objective is to bring the deficit to 5.5% of the GDP.
India remains a poor country: the GDP per capita is low, almost 25% of the population still lives below the poverty line and the inequalities are very strong.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 1,264.86 | 1,631.97e | 1,843.38e | 2,012.76 | 2,235.24 |
| GDP (Constant Prices, Annual % Change) | 6.8 | 10.1 | 7.8e | 7.5 | 8.1 |
| GDP per Capita (USD) | 1,077e | 1,371 | 1,527e | 1,646 | 1,804 |
| General Government Balance (in % of GDP) | -10.6 | -9.2e | -8.3 | -8.0 | -7.9 |
| General Government Gross Debt (in % of GDP) | 69.4 | 64.1 | 62.4 | 62.0 | 60.9 |
| Inflation Rate (%) | 10.9 | 12.0e | 10.6 | 8.6 | 7.1 |
| Unemployment Rate (% of the Labor Force) | - | 10.8 | - | - | - |
| Current Account (billions USD) | -35.77 | -42.81 | -40.27 | -43.96 | -41.74 |
| Current Account (in % of GDP) | -2.8 | -2.6 | -2.2 | -1.9 | - |
Source: IMF - World Economic Outlook Database ; CIA - The world factbook , Last Available Data
Note: (e) Estimated Data
India is the world's fourth agricultural power. Agriculture contributes to about 20% of the GNP and employs close to two-thirds of the active population. The main agricultural products are: wheat, millet, rice, corn, sugar cane, tea, potatoes and cotton. India is also the second producer of cattle, third producer of sheep and fourth in fishing production.
Coal is the country's main energy source (India is the third largest world producer of coal). In the manufacturing industry, textile plays a predominant role. In terms of size, the chemical industry is the second largest industrial sector (12% of the GNP).
The services sector is the most dynamic part of the Indian economy. It contributes to more than half of its GDP, and it does not employ but a third of its active population. The software sector, which grows rapidly, is boosting the export of services and modernizing the Indian economy.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 55.8 | 19.0 | 25.2 |
| Value Added (in % of GDP) | 16.2 | 28.4 | 55.4 |
| Value Added (Annual % Change) | 5.0 | 9.0 | 9.1 |
Source: World Bank - Last Available Data.
| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Indian Rupee (INR) - Average Annual Exchange Rate For 1 USD | 45.31 | 41.35 | 43.51 | 48.41 | 45.73 |
Source: World Bank - Last Available Data.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
See the Country Risk Analysis Provided By Ducroire.
India was a protectionist state for a long time, but the country has become progressively more open to international trade. It has recently signed free trade agreements with South Korea and the ASEAN, and has entered into negotiations with several partners (EU, MERCOSUR, Australia, New Zealand, South Africa).
India recorded a high commercial deficit due to the price rise of raw materials which increased the import invoices. In regards of exports, they have recorded a lower progression during the last recent years due to the rise of the rupee in relation to the dollar (most of the exports are drawn up in dollars) and the decline of the global demand. During the economic crisis, exports dropped at a slower rhythm than imports, creating a reduction of the commercial deficit.
The main trade partners of India are the European Union, the United Arab Emirates, China and the United States.
| Foreign Trade Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Imports of Goods (million USD) | 178,410 | 229,370 | 321,032 | 257,202 | 322,702 |
| Exports of Goods (million USD) | 121,808 | 150,159 | 194,827 | 164,907 | 216,162 |
| Imports of Services (million USD) | 58,222 | 70,388 | 87,760 | 80,274 | 116,906 |
| Exports of Services (million USD) | 69,456 | 86,612 | 103,829 | 90,193 | 109,514 |
| Imports of Goods and Services (Annual % Change) | 22.0 | 10.0 | 23.0 | -7.3 | 13.7 |
| Exports of Goods and Services (Annual % Change) | 21.8 | 5.2 | 19.3 | -6.7 | 4.2 |
| Imports of Goods and Services (in % of GDP) | 24.3 | 24.5 | 28.9 | 24.0 | 24.9 |
| Exports of Goods and Services (in % of GDP) | 21.3 | 20.4 | 23.5 | 19.6 | 18.5 |
| Trade Balance (million USD) | -42,804 | -54,827 | -93,142 | -79,665 | -97,934 |
| Trade Balance (Including Service) (million USD) | -31,770 | -38,704 | -74,360 | -67,678 | -91,013 |
| Foreign Trade (in % of GDP) | 45.6 | 44.9 | 52.4 | 43.6 | 43.3 |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| United Arab Emirates | 12.4% |
| United States | 10.7% |
| China | 7.9% |
| Hong Kong | 4.3% |
| Singapore | 4.1% |
| See More Countries | 60.5% |
| Main Suppliers (% of Imports) |
2010 |
| China | 12.3% |
| United Arab Emirates | 8.8% |
| Switzerland | 6.3% |
| United States | 5.8% |
| Saudi Arabia | 5.6% |
| See More Countries | 61.3% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
President is the chief of the state and is elected by an electoral college consisting of elected members of both houses of Parliament and the legislatures of the provinces for a five-year term.
Prime Minister is the head of the government and is chosen by parliamentary members of the majority party following legislative elections, to serve a term of five years. The President, on the recommendation of the Prime Minister, appoints the Cabinet.The major political parties in the country are:
- Indian National Congress: a major political party involved in India's independence movement
- Bharatiya Janta Party: pro-Hindu, nationalist ideology,
- Communist Party of India: Marxism-Leninism,
- Bahujan Samajwadi Party: draws support from backward classes & religious minorities.
Source: Worldwide Press Freedom Index 2010, Reporters Without Borders
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Last Updates: January 2012