Economy

THE INDIAN ECONOMY

India is today the second fastest growing economy of the world. The country ranked fourth in terms of Purchasing Power Parity (PPP) in 2005. The business and regulatory environment is evolving and moving towards constant improvement. A highly talented, skilled and English-speaking human resource base forms its backbone. Far-reaching measures introduced by the government over the past few years to liberalise the Indian market and integrate it with the global economy are widely acknowledged.  The tenth five year plan document targets a healthy growth rate of above 8% for the Indian economy during the plan period 2002 – 07. According to some experts, the share of the US in world GDP is expected to fall (from 21 per cent to 18 per cent) and that of India to rise (from 6 per cent to 11 per cent in 2025), and hence the latter will emerge as the third pole in the global economy after the US and China. By 2025, the Indian economy is projected to be about 60 per cent the size of the US economy. The transformation into a tripolar economy will be complete by 2035, and India is likely to be a larger growth driver than the six largest countries in the EU to become the third largest economy with a share of 14.3 per cent of global economy by 2015 and graduate to become the “third pole” and growth driver by 2035.

A growth rate of above 9 % was achieved by the Indian economy during the year 2006-07 and 8.6 % in 2007-08. Many factors are behind this robust performance of the Indian economy since  in 2001. High growth rates in Industry & Services sector and a benign world economic environment provided a backdrop conducive to the Indian economy. Another positive feature was that the growth was accompanied by continued maintenance of relative stability of prices.

Economic profile:

GDP at current prices: US$ 1005 billion (2007-08)

Composition of GDP: Services 56%, Agriculture 22% and Industry 22%

Estimate of GDP growth: 8.8 percent (2007-08)

Cumulative FDI inflow: US$ 38.9 million (upto March 2006)

Foreign exchange reserves: US$ 262.4 billion (October 2007)

Exchange rate: Rs 39.32 per US$ (November 2007)

Foodgrain production: 211.8 million tonnes (2006-2007)

Buffer foodgrain stock: 17.73 million tones (March 2007)

Principal exports: Traditional exports include cotton yarn and textiles, readymade garments, leather goods, gems and jewellery and agricultural and processed food products. However, chemicals, pharmaceuticals, engineering goods, automotive components, transport equipment, software, electronic goods and manufactured metals constitute the rapidly growing export segments.

Principal markets for exports: USA, Canada, UK, Germany, Japan, Russia, Belgium, Iran, Kuwait, Saudi Arabia, Chile, Argentina, Brazil, Mexico, China, Hong Kong, Singapore, Thailand, Malaysia and Sri Lanka.

Imports: US$ 140 billion (2007-08)

Principal imports: Capital goods, crude oil, lubricants and other petroleum products, precious and semi-precious stones, chemicals, edible oils and fertilizers.

Principal markets of imports: USA, UK, Japan, Germany, Nigeria, Iran, Kuwait, Saudi Arabia, Brazil, Chile, Egypt, Ghana, South Africa, China, Hong Kong, Singapore, Malaysia and Thailand.