Economy of India

Economy of India

Mumbai, the financial centre of India[1][2]
Currency	Indian rupee (INR, ₹)
Fiscal year	1 April – 31 March
Trade organisations	WTO, WCO, SAFTA, BIMSTEC, WFTU, BRICS, G-20, BIS, AIIB, ADB and others
Country group	Developing/Emerging[3] Lower-middle income economy[4] Newly industrialized country
Statistics
Population	1,428,627,663 (1st; 2024 est.)[5]
GDP	$3.937 trillion (nominal; 2024 est.)[6] $14.594 trillion (PPP; 2024 est.)[6]
GDP rank	5th (nominal; 2024) 3rd (PPP; 2024)
GDP growth	7.8% (2023)[6] 6.8% (2024)[6] 6.5% (2025)[6]
GDP per capita	$2,731 (nominal; 2024 est.)[6] $10,123 (PPP; 2024 est.)[6]
GDP per capita rank	136th (nominal; 2024)[a] 125th (PPP; 2024)[a]
GDP by sector	Agriculture: 18.4% Industry: 28.3% Services: 53.3% (FY 2021–22)[7]
GDP by component	Private 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)[8]
Inflation (CPI)	4.85% (March 2024)[9]
Base borrowing rate	6.50% (9th February 2024)[10]
Population below poverty line	$2.15/day (2017 PPP) (% population): 11.90% (2021) [11] 11.28% in multidimensional poverty [12](2022-23)
Gini coefficient	35.7 medium (2019)[13] 32.8 medium (2021)[14]
Human Development Index	0.644 medium (2022)[15]
Corruption Perceptions Index	39 (2023)[16] (93rd)
Labour force	586 million (2023)[17] 49.8% employment rate (2022)[18]
Labour force by occupation	Agriculture: 42.60% [19] Industry: 25.12% [20] Services: 32.28% [21] (2019)
Unemployment	7.6% March 2024 [22][23]
Gross savings	29.345% of GDP (2022)[24]
Yield curve	10-year bond 7.190% (Jan 2023)[25][26]
Purchasing Managers' Index	54.9 Manufacturing (Dec 2023)[27] 59.0 Services (Dec 2023)[28]
Main industries	Textiles chemicals food processing steel transportation equipment cement mining petroleum machinery software pharmaceuticals[29]
External
Exports	$776.68 billion (FY2023-24)[30]
Export goods	Manufacturers 70.7% Fuels and mining products 14.7% Agricultural products 14.1% Others 0.5%[31] (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%[31] (FY 2021–22)
Imports	$854.80 billion (FY2023-24)[30]
Import goods	Agricultural products 7% Fuels and mining products 33.2% Manufacturers 52.1% Other 7.7 %[31] (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%[32] (FY 2022–23)
FDI stock	$514 Billion (2021–22) [33][34]
Current account	–$120.569 billion (2022)[24][35] –3.476% of GDP (2022)[24]
Gross external debt	$624.7 billion (March 2023)[36] ( 18.9% of GDP)
Net international investment position	–$379.7 billion (June 2023)[37]
Public finances
Government debt	₹246.531 trillion (US$3.1 trillion)[24] 81.9% of GDP (2023)[24]
Budget balance	6.4% of GDP (2022–23)[38]
Revenues	₹27.163 trillion (US$340 billion) (2023–24) [39]
Expenses	₹45.031 trillion (US$560 billion) (2023–24) [39]
Economic aid	Donor: $4.234 billion (2021) ($30.59 billions Line of Credit in total)[40]
Credit rating	Standard & Poor's:[41] BBB− Outlook: Positive Moody's:[41] Baa3 Outlook: Stable Fitch:[41] BBB− Outlook: Stable DBRS:[42] BBB(low) Outlook: Positive
Foreign reserves	$643.142 billion[b][43] (4th) (as of 12 April 2024)
All values, unless otherwise stated, are in US dollars.

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.^[44] 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 136th by GDP (nominal) and 125th by GDP (PPP).^[45] 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.^[46][47] 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.^[48][49] Since the start of the 21st century, annual average GDP growth has been 6% to 7%.^[44] 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.^[50][51][52]

Nearly 70% of India's GDP is driven by domestic consumption;^[53] country remains the world's fourth-largest consumer market.^[54] Apart from private consumption, India's GDP is also fueled by government spending, investments, and exports.^[55] In 2022, India was the world's 8th-largest importer and the 10th-largest exporter.^[56] India has been a member of the World Trade Organization since 1 January 1995.^[57] It ranks 63rd on the Ease of doing business index and 40th on the Global Competitiveness Index.^[58] With 476 million workers, the Indian labour force is the world's second-largest.^[59] India has one of the world's highest number of billionaires and extreme income inequality.^[60][61]

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.^[62] The period between 2004 and 2014 is referred to as India's lost decade as India fell behind other BRIC economies.^[63][64]

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.^[65] 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.^[66][67]

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.^[68] The Bombay Stock Exchange and National Stock Exchange are some of the world's largest stock exchanges by market capitalisation.^[69] India is the world's sixth-largest manufacturer, representing 2.6% of global manufacturing output.^[70] Nearly 65% of India's population is rural,^[71] and contributes about 50% of India's GDP.^[72] India faces high unemployment, rising income inequality, and a drop in aggregate demand.^[73][74] India's gross domestic savings rate stood at 29.3% of GDP in 2022.^[75] In recent years, independent economists and financial institutions have accused the government of manipulating various economic data, especially GDP growth.^[76][77] 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.^[78][79]

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