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Economy of India

India has a developing mixed economy with a notable public sector in strategic sectors. It is the world's sixth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP) as of April 2026. On a per capita income basis, the is nation ranked 149th by nominal GDP and 119th by PPP-adjusted GDP as 2026. From independence in 1947 until 1991, economic development was characterized by protectionist economic policies, with extensive state intervention, demand-side economics, natural resource optimization, and regulation. An acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning. India has about 1,900 public sector companies under a variety of public–private partnership (PPP) models. The government plays a major role in sectors like supercomputing, space and shipping but private participation is growing, especially in space, telecom, and satellite communications.

History
expanded the Mughal Empire and made it the region with largest GDP in the 17th century. Indus Valley Civilisation, the early civilisation of India and Pakistan, developed the economy of agriculture and craft which later spread into central India. Angus Maddison estimates that from 1-1000 AD, the regions making up the present-day India contributed roughly 30% of the world's population and GDP. India experienced per-capita GDP growth in the high medieval era. By the late 17th century, most of the Indian subcontinent had been united under the Mughal Emperor Aurangzeb, which for a time Maddison estimates became the largest economy and manufacturing power in the world, producing about a quarter of global GDP, before fragmenting and being conquered over the next century. The combination of protectionist, import-substitution, Fabian socialism, and social democratic-inspired policies governed India for sometime after the end of British rule. The economy was then characterised as Dirigism, due to extensive regulation, protectionism, and public ownership of large monopolies. Since 1991, continuing economic liberalisation has moved the country towards a market-based economy. By 2008, India had established itself as one of the world's faster-growing economies. Ancient and medieval eras Indus Valley Civilisation The citizens of the Indus Valley civilisation, a permanent settlement that flourished between 2800 BCE and 1800 BCE, practised agriculture, domesticated animals, used uniform weights and measures, made tools and weapons, and traded with other cities. Evidence of well-planned streets, a drainage system, and water supply reveals their knowledge of urban planning, which included the first-known urban sanitation systems and the existence of a form of municipal government. West Coast Maritime trade was carried out extensively between southern regions of India and Southeast Asia and West Asia from early times until around the fourteenth century CE. Both the Malabar and Coromandel Coasts were the sites of important trading centres from as early as the first century BCE, used for import and export as well as transit points between the Mediterranean region and southeast Asia. Over time, traders organised themselves into associations which received state patronage. This state patronage for overseas trade came to an end by the thirteenth century CE, when it was largely taken over by the local Parsi, Jewish, Syrian Christian, and Muslim communities, initially on the Malabar and subsequently on the Coromandel coast. Silk Route Other scholars suggest trading from India to West Asia and Eastern Europe was active between the 14th and 18th centuries. During this period, Indian traders settled in Surakhani, a suburb of greater Baku, Azerbaijan. These traders built a Hindu temple, which suggests commerce was active and prosperous for Indians by the 17th century. Further north, the Saurashtra and Bengal coasts played an important role in maritime trade, and the Gangetic plains and the Indus valley housed several centres of river-borne commerce. Most overland trade was carried out via the Khyber Pass connecting the Punjab region with Afghanistan and onward to the Middle East and Central Asia. Although many kingdoms and rulers issued coins, barter was prevalent. Villages paid a portion of their agricultural produce as revenue to the rulers, while their craftsmen received a part of the crops at harvest time for their services. Mughal, Rajput, and Maratha eras (1526–1820) The Indian economy was the largest and most prosperous throughout world history and would continue to be under the Mughal Empire, up until the 18th century. Sean Harkin estimates that China and India may have accounted for 60 to 70 percent of world GDP in the 17th century. The Mughal economy functioned on an elaborate system of coined currency, land revenue and trade. Gold, silver and copper coins were issued by the royal mints which functioned on the basis of free coinage. The political stability and uniform revenue policy resulting from a centralized administration under the Mughals, coupled with a well-developed internal trade network, ensured that India–before the arrival of the British–was to a large extent economically unified, despite having a traditional agrarian economy characterised by a predominance of subsistence agriculture. Agricultural production increased under Mughal agrarian reforms, and possibly higher per-capita agricultural output and standards of consumption than 17th century Europe. The Mughal Empire had a thriving industrial manufacturing economy, with India producing about 25% of the world's industrial output up until 1750, making it the most important manufacturing centre in international trade. Manufactured goods and cash crops from the Mughal Empire were sold throughout the world. Key industries included textiles, shipbuilding, and steel, and processed exports included cotton textiles, yarns, thread, silk, jute products, metalware, and foods such as sugar, oils and butter. In early modern Europe, there was significant demand for products from Mughal India, particularly cotton textiles, as well as goods such as spices, peppers, indigo, silks, and saltpeter (for use in munitions). In contrast, there was very little demand for European goods in Mughal India, which was largely self-sufficient. At the time, Mughal Bengal was the most important centre of cotton textile production. In the early 18th century the Mughal Empire declined, as it lost western, central and parts of south and north India to the Maratha Empire, which integrated and continued to administer those regions. The decline of the Mughal Empire led to decreased agricultural productivity, which in turn negatively affected the textile industry. The subcontinent's dominant economic power in the post-Mughal era was the Bengal Subah in the east., which continued to maintain thriving textile industries and relatively high real wages. However, the former was devastated by the Maratha invasions of Bengal and then British colonization in the mid-18th century. British era (1793–1947) From the beginning of the 19th century, the British East India Company's gradual expansion and consolidation of power brought a major change in taxation and agricultural policies, which tended to promote commercialisation of agriculture with a focus on trade, resulting in decreased production of food crops, mass impoverishment and destitution of farmers, and in the short term, led to numerous famines. The economic policies of the British Raj caused a severe decline in the handicrafts and handloom sectors, due to reduced demand and dipping employment. After the removal of international restrictions by the Charter of 1813, Indian trade expanded substantially with steady growth. The result was a significant transfer of capital from India to Britain, which, due to the colonial policies of the British, led to a massive drain of revenue rather than any systematic effort at modernisation of the domestic economy. 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. . Maddison's estimates for 18th-century India have been criticized as gross underestimates, Bairoch estimates India had a higher GDP per capita in the 18th century, and Parthasarathi's findings show higher real wages in 18th-century Bengal and Mysore. Under British rule, India's share of the world economy declined from 24.4% in 1700 down to 4.2% in 1950. India's GDP (PPP) per capita was stagnant during the Mughal Empire and began to decline prior to the onset of British rule. India's share of global industrial output declined from 25% in 1750 down to 2% in 1900. India served as both a significant supplier of raw goods to British manufacturers and a large captive market for British manufactured goods. British territorial expansion in India throughout the 19th century created an institutional environment that, on paper, guaranteed property rights among the colonisers, encouraged free trade, and created a single currency with fixed exchange rates, standardised weights and measures and capital markets within the company-held territories. It also established a system of railways and telegraphs, a civil service that aimed to be free from political interference, a common-law, and an adversarial legal system. This coincided with major changes in the world economy – industrialisation, and significant growth in production and trade. However, at the end of colonial rule, India inherited an economy that was one of the poorest in the developing world, with industrial development stalled, agriculture unable to feed a rapidly growing population, a largely illiterate and unskilled labour force, and extremely inadequate infrastructure. The 1872 census revealed that 91.3% of the population of the region constituting present-day India resided in villages. This was a decline from the earlier Mughal era, when 85% of the population resided in villages and 15% in urban centres under Akbar's reign in 1600. Urbanisation generally remained sluggish in British India until the 1920s, due to the lack of industrialisation and absence of adequate transportation. Subsequently, the policy of discriminating protection (where certain important industries were given financial protection by the state), coupled with the Second World War, saw the development and dispersal of industries, encouraging rural-urban migration, and in particular, the large port cities of Bombay, Calcutta and Madras grew rapidly. Despite this, only one-sixth of India's population lived in cities by 1951. The effect of British rule on India's economy is a controversial topic. Leaders of the Indian independence movement and economic historians have blamed colonial rule for India's poor economic performance following independence and argued that the capital required for the Industrial Revolution in Britain came from India. At the same time, other historians have countered that India's poor economic performance was due to various sectors being in a state of growth and decline due to changes brought in by colonialism and a world that was moving towards industrialisation and economic integration. Several economic historians have argued that Indian real wages declined in the early 19th century, or possibly beginning in the very late 18th century, largely as a result of British colonial rule. According to Prasannan Parthasarathi and Sashi Sivramkrishna, the grain wages of Indian weavers were likely comparable to that of their British counterparts and their average income was around five times the subsistence level, which was comparable to advanced parts of Europe. However they concluded that due to the scarcity of data, it was hard to draw definitive conclusions and that more research was required. while trade and foreign investment policies were relatively liberal. Five-Year Plans of India resembled central planning in the Soviet Union. Steel, mining, machine tools, telecommunications, insurance, and power plants, among other industries, were effectively nationalised in the mid-1950s. The Indian economy of this period is characterised as Dirigism. Jawaharlal Nehru, the first prime minister of India, along with the statistician Prasanta Chandra Mahalanobis, formulated and oversaw economic policy during the initial years of the country's independence. They expected favourable outcomes from their strategy, involving the rapid development of heavy industry by both public and private sectors, and based on direct and indirect state intervention, rather than the more extreme Soviet-style central command system. The Avadi Resolution, in January 1955, declared that the objective of the Indian National Congress was the establishment of a "socialistic pattern of society" in India. The policy of concentrating simultaneously on capital- and technology-intensive heavy industry and subsidising manual, low-skill cottage industries was criticised by economist Milton Friedman, who thought it would waste capital and labour, and retard the development of small manufacturers. Since 1965, the use of high-yielding varieties of seeds, increased fertilisers and improved irrigation facilities collectively contributed to the Green Revolution in India, which improved the condition of agriculture by increasing crop productivity, improving crop patterns and strengthening forward and backward linkages between agriculture and industry. However, it has also been criticised as an unsustainable effort, resulting in the growth of capitalistic farming, ignoring institutional reforms and widening income disparities. Economic reforms during the 1980s Indira Gandhi took several liberalization steps after the coming back to power following the 1980 Indian general election. There were several steps taken such as opening of automobile sectors to private sector i.e. Maruti Suzuki, creation of auto component industries through new industrial zones known as Industrial Model Townships(IMT) and Gurgaon, expansion of steel, fertilizer, oil and cement sector led to wider participation of private sector. They also subsequently tried to do urban reforms such as creation of Navi Mumbai and Noida. In 1984, The New Computer Policy of 1984 was introduced by Rajiv Gandhi, as it eased import restrictions on technology, encouraged private investments, and provided incentives for software exports. This included computers, airlines, defense, and telecommunications. Gandhi's government also established Software Technology Parks (STPs) to provide infrastructure, tax benefits, and faster data communications, enabling companies to export software services globally. Rajiv Gandhi's administration also saw setup of new logistics, telecom and transport infrastructure like Nhava Sheva port, Centre for Development of Advanced Computing, Centre for Development of Telematics, CONCOR and creation of highway body NHAI. These reforms led to the growth rate of 5.6% throughout 1980's instead of 2.9% in 1970's but Soviet Union was the largest export partner to India, which would lead to 1991 crisis. In 1990 Rajiv Gandhi introduced measures to significantly reduce the Licence Raj such as allowing private businesses and individuals to purchase capital, consumer goods and import without bureaucratic restrictions. Gandhi subsequently promised full economic liberalization and made V. P. Singh the finance minister, who tried to reduce tax evasion and tax receipts rose due to this crackdown although taxes were lowered. India asked for a $1.8 billion bailout loan from the International Monetary Fund (IMF), which in return demanded de-regulation. In response, the Narasimha Rao government, including Finance Minister Manmohan Singh, initiated economic reforms in 1991. The reforms did away with the Licence Raj, reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors. Since then, the overall thrust of liberalisation has remained the same, although no government has tried to take on powerful lobbies such as trade unions and farmers, on contentious issues such as reforming labour laws and reducing agricultural subsidies. This has been accompanied by increases in life expectancy, literacy rates, and food security, although urban residents have benefited more than rural residents. From 2010, India has risen from ninth-largest to the fifth-largest economies in the world by nominal GDP in 2019 by surpassing UK, France, Italy and Brazil. India started recovery in 2013–14 when the GDP growth rate accelerated to 6.4% from the previous year's 5.5%. The acceleration continued through 2014–15 and 2015–16 with growth rates of 7.5% and 8.0% respectively. India grew faster than China which registered 6.9% growth in 2015. However the growth rate subsequently decelerated, to 7.1% and 6.6% in 2016–17 and 2017–18 respectively, partly because of the disruptive effects of 2016 Indian banknote demonetisation and the Goods and Services Tax (India). But after slowdown due to global disruption caused by COVID-19 pandemic in 2019, India's economic growth has consistently outperformed China every year by a large margin and stays among fastest growing major economy in the world according to World Bank. COVID-19 pandemic and new reforms (2021–present) During the COVID-19 pandemic, numerous rating agencies downgraded India's GDP predictions for FY21 to negative figures, signalling a recession in India, the most severe since 1979. The Indian Economy contracted by 6.6 percent which was lower than the estimated 7.3 percent decline. In 2022, the ratings agency Fitch Ratings upgraded India's outlook to stable similar to S&P Global Ratings and Moody's Investors Service's outlooks. In the first quarter of financial year 2022–2023, the Indian economy grew by 13.5%. With 607 million workers, India has the world's second-largest labour force, which is growing rapidly, with 46.6 million added in 2023–24 alone. India’s fertility rate continues to fall sharply, from about 3.3 in 2000 to around 1.9 in 2025, below the replacement level of 2.1. Labour productivity remains lower than in advanced economies but is similar to levels observed in emerging Asian countries such as China. India’s outsourcing industry has shifted from traditional call centre BPO work, now largely handled by the Philippines and other Southeast Asian countries, to high-value software development, consultancy, engineering, and research oriented services. India hosts more than half of the world’s Global Capability Centres (GCCs), which perform product engineering and R&D functions. It is home to about 20% of global semiconductor chip design engineers and, as of early 2025, has an estimated 4.3 million software engineers, accounting for roughly 14.7% of the global software engineering workforce. In 2021–22, the foreign direct investment (FDI) in India was $82 billion. The leading sectors for FDI inflows were the Finance, Banking, Insurance and R&D. India has established free trade agreements and economic‑partnership with several countries and regional blocs, including the European Union, ASEAN, SAFTA, Japan, South Korea, Australia, New Zealand, Oman and the United Arab Emirates, while also concluding agreements with EFTA (Iceland, Liechtenstein, Norway, Switzerland) and the United Kingdom. India maintains Comprehensive Economic Cooperation Agreements (CECA/CEPA) with Singapore, Malaysia, Mauritius, and Japan, and continues to negotiate or review trade agreements with partners such as Chile, Canada, Israel and the Eurasian Economic Union. Additionally, India has bilateral investment and tax treaties with countries including Bangladesh, Uzbekistan, Kyrgyzstan, Belarus, and Trinidad & Tobago. In April 2025, the Indian economy temporarily surpassed Japan to become the fourth-largest economy in the world in terms of GDP (nominal). In November 2025, the IMF gave the Indian economy a letter 'C' grade, mentioning that Indian national accounts and inflation data is not accurately recording the informal sector and people’s spending patterns. 2026 In January 2026, India and the EU have announced they have agreed on what has become known as the "mother of all deals.". After 20 years of negotiations they have reached an agreement on a long term free trade agreement (FTA). The final signing will take place once all legal issues are resolved. Both sides hope it will be effective in early 2027. The free trade deal will significantly lower or cancel tariffs on over 90% of goods, improve market access for both entities. India will cut duties on key EU exports like alcohol, food products, machinery, chemicals, aircraft, and medical equipment, while the EU eases access for Indian exports such as textiles and chemicals. The deal will also make it easier for companies to provide services across borders, especially in areas like finance, transport, and professional services. In April 2026, the World Bank's South Asia Economic Update estimated India's GDP growth at 7.6% for FY2025–26, driven by strong private consumption, GST rationalization, and export resilience, while projecting a moderation to 6.6% in FY2026–27 due to Middle East conflict headwinds == Data ==
Data
The following table shows the main economic indicators in 1980–2024 (with IMF staff estimates in 2025–2029). Inflation below 5% is in green. The annual unemployment rate is extracted from the World Bank, although the International Monetary Fund finds them unreliable. == Economic sectors ==
{{Static row numbers}}{{mw-datatable}}{{sticky header}}{{sort under}}{{Table alignment}}Economic sectors
Agriculture, fishing, and forestry Agriculture and allied sectors like forestry, logging and fishing accounted for 18.4% of the GDP, the sector employed 51.2 crore persons or 45.5% of the workforce in India are employed in agriculture. India is major agriculture producing country and has the most arable land in the world followed by the United States. However, agricultural output lags far behind its potential. Agriculture's contribution to GDP has steadily declined from 1951 to 2023, shifting from 52% to 15% of India's GDP yet it is still the country's largest employment provider sector . Crop-yield-per-unit-area of all crops has grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since the Green Revolution in India. However, international comparisons reveal the average yield in India is generally 30% to 50% of the highest average yield in the world. The states of Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Andhra Pradesh, Telangana, Bihar, West Bengal, Gujarat and Maharashtra are key contributors to Indian agriculture. India receives an average annual rainfall of and a total annual precipitation of 4,000 billion cubic metres, with the total utilisable water resources, including surface and groundwater, amounting to 1,123 billion cubic metres. of the land area, or about 39% of the total cultivated area, is irrigated. India's inland water resources and marine resources provide employment to nearly 6 million people in the fisheries sector. In 2023, according to the Ministry of Fisheries, India is the 3rd largest fish producing and 2nd largest aquaculture producing nation in the world. alone. India is the largest producer of milk, jute and pulses, and has the world's largest cattle population with 303 million animals in 2023. It is the second-largest producer of rice, wheat, sugarcane, cotton and groundnuts, as well as the second-largest fruit and vegetable producer, accounting for 10.9% and 8.6% of the world fruit and vegetable production, respectively, but only for 1% of global fruits and vegetables trade. India is also the second-largest producer and the largest consumer of silk, producing in 2005. India is the second-largest exporter of cashew kernels and cashew nut shell liquid (CNSL). Foreign exchange earned by the country through the export of cashew kernels during FY 2023 reached 356M$. of kernels were exported during 2023. There are about 600 cashew processing units in Kollam, Kerala. India exports several agriculture products, such as Basmati rice, wheat, cereals, spices, fresh fruits, dry fruits, cotton, tea, coffee, milk products and other cash crops to the Asian, African and other countries. in Maharashtra The low productivity in India is a result of several factors. Over-regulation of agriculture has increased costs, price risks and uncertainty, and governmental intervention in labour, land, and credit are hurting the market. Infrastructure such as rural roads, electricity, ports, food storage, retail markets and services remain inadequate. The average size of land holdings is very small, with 70% of holdings being less than in size. Irrigation facilities are inadequate, as revealed by the fact that only 46% of the total cultivable land was irrigated In an effort to bring an additional of land under irrigation, various schemes have been attempted, including the Accelerated Irrigation Benefit Programme (AIBP) which was provided in the Union Budget. Farming incomes are also hampered by lack of food storage and distribution infrastructure; a third of India's agricultural production is lost from spoilage. Micro, Small, and Medium Enterprises (MSME) India began its first few steps during the years 1978-80 when early conditions for SMEs or entrepreneurship were hostile too. 63 million MSMEs in India which contribute ''35% to the country's GDP'' provides employment to 111.4 million persons and accounts for more than 40% of India's exports and are hailed as the 'growth engines' of the economy. China has been creating 16,000-18,000 new enterprises per day for the last 5 years. When one compares that with India, it is about 1000-1100 per day. Micro and small enterprises have the potential to resolve India's unemployment crisis provided the constraints impeding the growth of the sector are resolved. According to Annual MSME Report 2021-22, over 90 per cent of India's 6.3 crore MSMEs are in the micro-segment. Within the micro sector, 62 per cent firms are self-employments which no workers, another 32 per cent have two or three workers and just 6-7 per cent have four workers or above (up to 19). In 2023, SME IPOs set a record-breaking year with 179 listings. In Budget 2023, The government has implemented a number of reforms aimed at boosting MSMEs' growth in India while also improving their international competitiveness. Industrial machinery, tools and manufacturing equipment Machinery and equipment market is expected to grow 8% from 2024 to 2029. India's Industrial Machinery Equipment and Tools market size is expected to be $210 billion in 2023.The rise in R&D and large number of startups has led to increase in investment in tools, industrial equipment, robotics, industrial automation, pharmaceutical machinery, mining & construction equipment. Indian Government has launched an initiative in promoting electrification of fossil-fuel based equipment hence reducing carbon footprint and leading to new innovations. Pulp and paper industry Mining, resources, and chemicals Mining mine India has, in 2022, a reported 1,319 mines of which reporting mines for metallic minerals were estimated at 545 and non-metallic minerals at 775. Mining contributed to 1.75% of GDP and employed directly or indirectly 11 million people in 2021. India's mining industry was the fourth-largest producer of minerals in the world by volume, and eighth-largest producer by value in 2009. In 2013, it mined and processed 89 minerals, of which four were fuel, three were atomic energy minerals, and 80 non-fuel. The public sector accounted for 68% of mineral production by volume in 2011–12. India has the world's fourth-largest natural resources, with the mining sector contributing 11% of the country's industrial GDP and 2.5% of total GDP. Nearly 50% of India's mining industry, by output value, is concentrated in eight states: Odisha, Rajasthan, Chhattisgarh, Andhra Pradesh, Telangana, Jharkhand, Madhya Pradesh and Karnataka. Another 25% of the output by value comes from offshore oil and gas resources. On output-value basis, India was one of the five largest producers of mica, chromite, coal, lignite, iron ore, bauxite, barite, zinc and manganese; while being one of the ten largest global producers of many other minerals. and the seventh-largest producer of aluminium. India also holds the world's third-largest reserves of rare earth elements (approx. 6.9 million tonnes; 7% of global reserves), with deposits concentrated in states such as Odisha, Andhra Pradesh, Tamil Nadu, Kerala and West Bengal. Despite its large reserves, its high-value processing capability is limited and rely heavily on imports from China. India's mineral resources are vast. However, its mining industry has declined – contributing 2.3% of its GDP in 2010 compared to 3% in 2000, and employed 2.9 million people – a decreasing percentage of its total labour. India is a net importer of many minerals including coal. India's mining sector decline is because of complex permit, regulatory and administrative procedures, inadequate infrastructure, shortage of capital resources, and slow adoption of environmentally sustainable technologies. Cement Indian cement industry is the 2nd largest cement producing country in the world, next only to China. At present, the Installed Capacity of Cement in India is 500 MTPA with production of 298 million tonnes per annum. Majority of the cement plants installed capacity (about 35%) is located in the states of south India. In PAT scheme, Total Installed Capacity of Cement in India is 325 MTPA which contributes to 65% coverage of total installed capacity in India. Iron and steel (BSL) alone contributes 45% of SAIL's profit and it produces highly diversified steel portfolio India surpassed Japan as the second largest steel producer in January 2019. As per , India's crude steel production in 2018 was at , 4.9% increase from in 2017, which means that India overtook Japan as the world's second largest steel production country. According to data presented by PIB(FY2021-22), there are more than 900 steel plants in India that produce crude steel. These are owned by PSUs, large-scale companies as well as small and medium enterprises (SMEs). In the year 2021–22, the total capacity of these plants stood at 154.06 million tonnes. The total market value of the Indian steel sector stood at US$57.8 billion in 2011 and is predicted to touch US$95.3 billion by 2016.Growth of crude steel production in India has not kept pace with the growth in capacity of production, according to the report. As per this report, steel sector contributes 2 per cent to India's GDP and employs half a million people directly and 2 million people indirectly. The Indian steel sector has been vibrant, growing at a compounded rate of 6% year-on-year. Multiple integrated steel plants both state-owned and private are using automated AI-based systems for production. Petroleum in Mangalore Petroleum products and chemicals are a major contributor to India's industrial GDP, and together they contribute over 34% of its export earnings. India hosts many oil refinery and petrochemical operations developed with help of Soviet technology such as Barauni Refinery and Gujarat Refinery, it also includes the world's largest refinery complex in Jamnagar that processes 1.24 million barrels of crude per day. By volume, the Indian chemical industry was the third-largest producer in Asia, and contributed 5% of the country's GDP. India is one of the five-largest producers of agrochemicals, polymers and plastics, dyes and various organic and inorganic chemicals. Despite being a large producer and exporter, India is a net importer of chemicals due to domestic demands. India's chemical industry is extremely diversified and estimated at $178 billion. Chemicals and fertilizer The chemical industry contributed $163 billion to the economy in FY18 and is expected to reach $300–400 billion by 2025. The industry employed 17.33 million people (4% of the workforce) in 2016. At present, 57 large fertilizer units are manufacturing a wide number of nitrogen fertilizers. These include 29 urea-producing units and 9 ammonia sulfate-producing units as a by-product. Besides, there are 64 small-scale producing units of single super phosphate. According to the latest data released by the WTO, India has emerged as the second largest exporter of agrochemicals in the world. The rank was sixth, 10 years ago. The Indian agrochemical industry fetches valuable trade surplus every year. The trade surplus sharply increased from Rs. 8,030 crores in 2017–18 to Rs. 28,908 crores in the last fiscal. India's agrochemicals export has doubled in the last 6 years from $2.6 bn in 2017–18 to $5.4 bn in the last financial year according to the data recently released by Ministry of Commerce. It has grown at an impressive CAGR of 13% which is among the highest in the manufacturing sector. Millions of farmers in over 130 countries trust Indian agrochemicals for their high quality and affordable prices, said an industry observer. With the global agrochemicals market estimated at $78 billion, predominantly comprising post-patent products, India is rapidly becoming a preferred global hub for sourcing such agrochemicals. To bolster domestic production and reduce imports, the Crop Care Federation of India (CCFI) has recommended specific measures to the Government of India. Textile Pharmaceuticals Transportation Railways and Logistics train The Indian Railways contributes to ~3% of the country's gross domestic product (GDP) and has social obligations pegged at $5.3 billion annually. Indian Railways revenue has grown at 5% CAGR in the past 5 years but profitability has reduced drastically in the past 4 years, due to growing infrastructure and modernization expenses. With a workforce of 1.31 million people, the IR is also one of the country's largest employers. The railways is a major contributor to jobs, GDP, and mobility. Indian Railways has decided to revise its 2022–23 rolling stock production plan upwards. The Ministry's new plan targets the production of 8,429 units for the coming financial year. Production for 2022–23 has been raised by 878 units from the earlier planned 7,551, according to the revised targets. Indian Railways has targeted to manufacture 475 new Vande Bharat trainsets for the next four years as a part of its modernization plan. It is about Rs 40,000 crore($5 billion) business opportunity that would also create 15,000 jobs and several spin-off benefits. Indian Railway's CORE aims to electrify all of its broad gauge network by 31 March 2024. The entire electrified mainline rail network in India uses 25 kV AC; DC is used only for metros. As of July 2023, India currently has 90% of total train tracks fully electrified. Under the eleventh Five Year Plan of India (2007–12), the Ministry of Railways started constructing a new Dedicated Freight Corridor (DFC) in two long routes, namely the Eastern and Western freight corridors. The two routes cover a total length of , with the Eastern Dedicated Freight Corridor stretching from Ludhiana in Punjab to Dankuni in West Bengal and the Western Dedicated Freight Corridor from Jawaharlal Nehru Port in Mumbai (Maharashtra) to Dadri in Uttar Pradesh. The DFC will generate around 42,000 jobs and provide long term employment to many people in public sector and private sector. Rapid Transit India is developing modern mass rapid transit systems to meet present and future urban requirements. A modern metro rail system is already in place in the cities of Navi Mumbai, Delhi, Mumbai, Bangalore, Kolkata, Hyderabad, Kochi, Gurgaon, Jaipur, Noida, Pune, Nagpur, Kanpur, Ahmedabad and Lucknow. Similar mass transit systems are intended for Agra, Bhopal, Indore, Surat, Patna, Bhubaneswar Tri-city, Chandigarh Tri-city, Gwalior, Mysore, Nashik, Prayagraj, Varanasi, Ranchi, Thane and Trivandrum. Former Prime Minister Atal Bihari Vajpayee has been credited with success of the metro systems in India and every metro has followed Delhi Metro model generating lot of real estate wealth in India specially in smaller cities like Gurgaon and Noida. For Elevated corridor, there is no need for land acquisition as pillars are built above Median strip of a road. Land prices in tier-II cities such as Lucknow, Patna, Jaipur, Ahmedabad, Pune, Kochi, and Coimbatore have gone up by almost 8-10 percent following the introduction of a metro corridor in these cities, an assessment by JLL has said. India is also developing modern RRTS system to replace the old MRTS system which will provide connectivity in Delhi Metropolitan Area and Mumbai Metropolitan Region which will serve the suburbs of these big cities at 80–100 km of distance from city centre. Aviation India is the fourth-largest civil aviation market in the world recording an air traffic of 158 million passengers in 2017. The market is estimated to have 800 aircraft by 2020, which would account for 4.3% of global volumes, and is expected to record annual passenger traffic of 520 million by 2037. Shipbuilding The Shipbuilding Financial Assistance Policy (SBFAP) was introduced in 2016, provides financial assistance to Indian shipyards for shipbuilding contracts. According to the ministry of ports, shipping and waterways, under SBFAP, a total of 313 domestic and export vessel orders were procured by 39 shipyards since the inception of the scheme, with the total value standing at about ₹10,500 crore($1.26 billion). India has multiple ship building companies such as Cochin Shipyard, Hindustan Shipyard and Swan Defence and Heavy Industries, mainly produces ships for European, South American and African shipping companies. Cochin shipyard is the pioneer in autonomous electric propulsion ships. IT and telecommunications Datacentre and cloud India has emerged as the leading data centre hub in the Asia-Pacific region (excluding China), surpassing established players like Singapore, Australia, South Korea, Japan, and Hong Kong in installed capacity. This reflects the escalating demand for data services in one of the world's fastest-growing major economies. With a current installed capacity of 950 MW and projections indicating an additional 850 MW by 2026, India is poised to solidify its position as a key player in the Asia-Pacific data centre landscape. In Hyderabad, The largest datacentre is spread over 1. 31 lakh square feet, the proposed rated-4 (tier-4) data centre will be equipped with 1,600 racks and powered by 18MW of electricity. India's overall public cloud services market is projected to hit US $13 billion by 2026, expanding at a CAGR of 23.1% in 2021-26. The market's revenue totaled US $2.8 billion for the first half of 2022. Electronics and semiconductors Telecommunications satellite: broadcasting sector in India is highly dependent on INSAT system. The telecommunication sector generated in revenue in 2014–15, accounting for 1.94% of total GDP. Telecom equipment manufacturing and exports are becoming a new success story following the success of smartphone exports. In the financial year 2024, the telecom equipment production exceeded the milestone of Rs 45,000 crore with exports totaling approximately Rs 10,500 crore. India is the second-largest market in the world by number of telephone users (both fixed and mobile phones) with 1.053 billion subscribers It has one of the lowest call-tariffs in the world, due to fierce competition among telecom operators. India has the world's third-largest Internet user-base. there were 342.65 million Internet subscribers in the country. India's telecommunication industry is the world's second largest by the number of mobile phone, smartphone, and internet users. Industry estimates indicate that there are over 554 million TV consumers in India India is the largest direct-to-home (DTH) television market in the world by number of subscribers. there were 84.80 million DTH subscribers in the country. Defence of India to power marine transport With over 1.3 million active personnel, the Indian Army is the third-largest military force and the largest volunteer army. Defence expenditure was pegged at US$70.12 billion for fiscal year 2022–23 and, increased 9.8% than previous fiscal year. India is the world's second largest arms importer; between 2016 and 2020, it accounted for 9.5% of the total global arms imports. India exported military hardware worth in the financial year 2022–23, the highest ever and a notable tenfold increase since 2016–17. Energy reactor undergoing construction in Kakrapar Nuclear Plant started in 1984 Primary energy consumption of India is the third-largest after China and US with 5.3% global share in the year 2015. Coal and crude oil together account for 85% of the primary energy consumption of India. India's oil reserves meet 25% of the country's domestic oil demand. India's total proven crude oil reserves are , while gas reserves stood at . Oil and natural gas fields are located offshore at Ashoknagar Oil Field, Bombay High, Krishna Godavari Basin, Mangala Area and the Cauvery Delta, and onshore mainly in the states of West Bengal, Assam, Gujarat and Rajasthan. India is the fourth-largest consumer of oil and net oil imports were nearly in 2014–15, In 2026, fuel costs rose after the Iran war disrupted Middle Eastern energy supplies, leading to higher LPG prices in India. India became the world's third-largest producer of electricity in 2013 with a 4.8% global share in electricity generation, surpassing Japan and Russia. By the end of calendar year 2015, India had an electricity surplus with many power stations idling for want of demand. The utility electricity sector had an installed capacity of 303 GW of which thermal power contributed 69.8%, hydroelectricity 15.2%, other sources of renewable energy 13.0%, and nuclear power 2.1%. India meets most of its domestic electricity demand through its of proven coal reserves. India is also rich in certain alternative sources of energy with significant future potential such as solar, wind and biofuels (jatropha, sugarcane). India's dwindling uranium reserves stagnated the growth of nuclear energy in the country for many years. Recent discoveries in the Tummalapalle belt may be among the top 20 natural uranium reserves worldwide, and an estimated reserve of of thorium – about 25% of world's reserves – are expected to fuel the country's ambitious nuclear energy programme in the long run. The Indo-US nuclear deal has also paved the way for India to import uranium from other countries. Infrastructure , the first Mother Port in the world, with harbour depth of 24 metres India's infrastructure and transport sector contributes around 5% to the country's gross domestic product (GDP). Roads India's total road network is over 6.6 million km, making it the second largest in the world as of early 2025. This expansive network comprises national highways, state highways, and other roads and is crucial for transportation, with roads carrying over 85% of passenger traffic and more than 70% of freight. India has rapidly expanded its network of expressways and national highways. , more than of 4-lane and above highways have been built, including flagship projects such as the Delhi–Mumbai Expressway, Surat–Chennai Expressway, Ganga Expressway, Dwarka Expressway, and Delhi–Meerut Expressway. is among the widest expressways in India Ports India has a coastline of , with 13 major ports and more than 200 non-major and private ports. These handle around 95% of India's external trade by volume and about 70% by value. Kandla (Deendayal) Port in Gujarat is the largest public port, while Mundra Port (operated by Adani Ports) is the largest private port in India. Under the Sagarmala project, port-led development and modernization of coastal infrastructure are being accelerated. Aviation India currently has around 153 operational airports managed by the Airport Authority of India (AAI), including 29 international airports, 10 customs airports, and 114 domestic airports, along with 23 civil enclaves at defence airfields. This number reflects significant growth, as it was 74 in 2014 and has more than doubled, a result of government initiatives UDAN. Companies India hosts multiple global-scale infrastructure and transport companies such as Afcons Infrastructure, Adani Ports & SEZ, JSW Infrastructure, and Larsen & Toubro, which operate across roads, ports, metro systems, and international projects. Water supply and sanitation Construction and Real Estate The construction sector—including infrastructure and real estate services—now accounts for approximately 18% of India's total economic output, reflecting a decade-long compound annual growth rate (CAGR) of about 11%. It remains the second-largest employment generator in the economy, currently employing roughly 71 million people and forecasted to exceed 100 million jobs by 2030. In Q4 2024–25, real gross value added (GVA) from construction reached ₹4.64 lakh crore, a year-on-year growth of 10.8%, contributing strongly to GDP growth. For the full fiscal year 2024–25, construction GVA at constant (real) prices stood at ₹15.72 lakh crore, showing a 9.4% increase over the previous year; nominal GVA rose to ₹26.27 lakh crore, also up 9.4% year-on-year. In 2016, the construction industry contributed US$288 billion (13% of GDP) and employed 60.4 million people (14% of the workforce). The MGNREGA scheme continues to play a dual role in rural employment and infrastructure development: In FY24, approximately 83.2 million people were provided work, generating over 312 crore person-days—a post-pandemic high. In FY25, despite slight declines, the scheme still delivered over 288 crore person-days—well above pre-pandemic levels. India is massively privatizing airports, ports, bus stands, railway stations, dams, dam wind park, solar parks, floating solar plants, power transmission, highways, thermal power and other utilizes. Finance and trade Banking and financial services HQ in BKC The financial services industry contributed $809 billion (37% of GDP) and employed 14.17 million people (3% of the workforce) in 2016, and the banking sector contributed $407 billion (19% of GDP) and employed 5.5 million people (1% of the workforce) in 2016. The unorganised sector and microcredit are preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes such as short-term loans for ceremonies. Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory for banks to provide 40% of their net credit to priority sectors including agriculture, small-scale industry, retail trade and small business, to ensure that the banks fulfilled their social and developmental goals. Since then, the number of bank branches has increased from 8,260 in 1969 to 72,170 in 2007 and the population covered by a branch decreased from 63,800 to 15,000 during the same period. The total bank deposits increased from in 1970–71 to in 2008–09. Despite an increase of rural branches – from 1,860 or 22% of the total in 1969 to 30,590 or 42% in 2007 – only 32,270 of 500,000 villages are served by a scheduled bank. India's gross domestic savings in 2006–07 as a percentage of GDP stood at a high 32.8%. More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold. The government-owned public-sector banks hold over 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks – such as reforms encouraging mergers, reducing government interference and increasing profitability and competitiveness – other reforms have opened the banking and insurance sectors to private and foreign companies. Retail The retail industry, excluding wholesale, contributed $793 billion (10% of GDP) and employed 35 million people (8% of the workforce) in 2020. The industry is the second largest employer in India, after agriculture. The Indian retail market is estimated to be US$600 billion and one of the top-five retail markets in the world by economic value. India has one of the fastest-growing retail markets in the world, and is projected to reach $1.3 trillion by 2020. India has retail market worth $1.17 trillion, which contributes over 10% of India's GDP. It also has one of the world's fastest growing e-commerce markets. The e-commerce retail market in India was valued at $32.7 billion in 2018, and is expected to reach $71.9 billion by 2022. India's retail industry mostly consists of local mom-and-pop stores, owner-staffed shops and street vendors. Retail supermarkets are expanding, with a market share of 4% in 2008. In 2012, the government permitted 51% FDI in multi-brand retail and 100% FDI in single-brand retail. However, a lack of back-end warehouse infrastructure and state-level permits and red tape continue to limit growth of organised retail. Compliance with over thirty regulations such as "signboard licences" and "anti-hoarding measures" must be made before a store can open for business. There are taxes for moving goods from state to state, and even within states. Over 10 million foreign tourists arrived in India in 2017 compared to 8.89 million in 2016, recording a growth of 15.6%. The tourism industry contributes about 9.2% of India's GDP and employs over 42 million people. India earned $21.07 billion in foreign exchange from tourism receipts in 2015. International tourism to India has seen a steady growth from 2.37 million arrivals in 1997 to 8.03 million arrivals in 2015. Bangladesh is the largest source of international tourists to India, while European Union nations and Japan are other major sources of international tourists. In 2024, Ayodhya, particularly with the Ram Temple became Uttar Pradesh's top tourist destination, attracting more domestic and international visitors. Coorg became the top fastest growing destination and hill station in 2024. Less than 10% of international tourists visit the Taj Mahal, with the majority visiting other cultural, thematic and holiday circuits. Over 12 million Indian citizens take international trips each year for tourism, while domestic tourism within India adds about 740 million Indian travellers. In October 2015, the medical tourism sector was estimated to be worth US$3 billion. It is projected to grow to $7–8 billion by 2020. In 2014, 184,298 foreign patients traveled to India to seek medical treatment. Business process outsourcing industry Call centre industry Wedding Industry India's wedding industry has a size of $75 billion, second largest after China. It is the fourth largest industry in India. The wedding industry saw significant growth in 2023 as weddings became larger and more extravagant post the pandemic blues. Average guest size grew by nearly 15%, from 270 guests in 2022 to 310 in 2023. Celebrations also expanded, with couples now hosting an average of 4.2 functions, up from 3.2.A significant 27 lakh weddings fall in the ₹10-25 lakh range, reflecting the popularity of mid-range wedding budgets. Smaller budgets like ₹3 lakh and ₹6 lakh account for 10 lakh weddings each, while high-end weddings costing ₹1 crore or more make up 50,000 weddings. India hosts the highest number of weddings in the world each year, as per investment banking and capital market firm Jefferies. However, in terms of market size, the Indian wedding industry is still smaller than China's but almost twice as big as the US's. Films, entertainment and music industry The Indian cinema industry is expected to garner a revenue of around Rs 16,198 crore by 2026, of which Rs 15,849 would be Box office revenue and the rest Rs 349 crore from advertising, the report added. India's Recorded Music industry (which is a key sub-segment) is making steady progress at a CAGR of 13.6 percent, thanks to streaming models. == Employment ==
Employment
As of 2022–23, around 46% of India's workforce was employed in the agricultural sector. This share, which had declined before the pandemic, has risen again in recent years, reaching 46.1% in 2023–24. During the same period, the services sector (excluding agriculture) accounted for about 28.9 percent of employment in 2022–23. The share of manufacturing employment has been more modest 11.4% in 2023–24. In 2021–22 and 2022–23, MoSPI reported that the unorganised non-farm sector employed about 19 % of India's workforce while contributing only 6 % of GDP. Other labour-market estimates indicate that the organised sector accounts for roughly 7% of the total workforce, with the remaining 93% in various forms of unorganised employment. Although India's labour productivity is lower than advanced economies, it aligns with levels observed in many emerging Asian countries like China. As of 2023–24, there remains a significant gender gap in employment. In rural areas, 73.5% of working women were self-employed, compared to 59.4% of rural men. In urban areas, 42.3% of women were self-employed versus 39.8% of men. The share of women in regular wage or salaried jobs was only 15.9%. Female labour force participation was 30.5% in rural areas and 20.2% in urban areas, compared to 55.5% and 58.3% for men, respectively. Gender earnings gaps persist: rural female casual labourers earned ₹259 per day, compared to ₹437 per day for rural male casual labourers, although much of this difference may reflect the types of jobs and occupations they engage in rather than direct pay discrimination. Unemployment Unemployment in India remains a complex challenge despite signs of modest improvement. According to the Periodic Labour Force Survey (PLFS) for 2024, the joblessness rate for persons aged 15 and above dipped slightly to 4.9%, down from 5.0% in 2023, while the Labour force participation rate (LFPR) remained broadly stable at about 56.2%. In April 2025, India's first monthly labour-force survey showed an unemployment rate of 5.1%, with an LFPR of 55.6%. However, urban unemployment continues to be more pronounced, reaching around 6.4% in the October–December 2024 quarter, with notably higher rates among women (8.1%) than men (5.8%). Structural issues still persist. A large share of India's workforce is self-employed (57.3%) and many are unpaid helpers in household enterprises (18.3%), which suggests under-employment and disguised employment remain widespread. Critics also point to limitations in how unemployment is measured. For example, some argue that definitions used by the PLFS count even minimal economic activity (such as one hour of work per week) as “employed,” potentially understating the real scale of joblessness. In response to these challenges, the government has recently approved an Employment-Linked Incentive (ELI) scheme worth ₹1 trillion (≈ $11.7 billion) designed to generate up to 35 million new jobs over two years (2025–2027), by offering wage subsidies to first-time employees and monthly support to employers. Alongside labour-market reforms, India's Production-Linked Incentive (PLI) programme, launched in 2020 across 14 sectors with an outlay of ₹1.97 lakh crore (≈ USD 24 billion), has become a major policy tool for employment generation. By March 2025, the schemes had attracted ₹1.76 lakh crore (≈ USD 21 billion) in committed investment and created over 12 lakh (1.2 million) jobs, with government disbursals crossing ₹21,500 crore (≈ USD 2.6 billion). By October 2025, electronics-parts makers had committed more than ₹1.15 lakh crore (≈ USD 13.6 billion) across 249 applications, reflecting strong industry response. By January 2026, the Government of India approved 22 proposals under ECMS with a projected investment of ₹41,863 crore (≈ $5.0 billion), estimated production worth ₹2.58 lakh crore (≈ $31 billion), and creation of about 33,791 direct jobs. The approved projects are spread across Andhra Pradesh, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh and Rajasthan. India launched India Semiconductor Mission (ISM), in December 2021 with an outlay of ₹76,000 crore (~US$ 9.2 billion), to support semiconductor fabrication, advanced packaging, and chip design. Under this policy, the government expects approximately 85,000 skilled jobs over the long term. It has already secured ₹1.52 lakh crore (~US$ 18.4 billion) in committed investments, with projections of ~25,000 direct advanced-technology jobs and 60,000 indirect jobs. This reflects a policy shift toward incentivising formal employment and reducing dependence on hidden or precarious labour. Nevertheless, persistent gender gaps in participation and employment, especially in urban areas, underline the need for sustained reforms in both educational access and labour regulations. Child labour Child labour is a complex problem that is rooted in poverty. Since the 1990s, the government has implemented a variety of programs to eliminate child labour. These have included setting up schools, launching free school lunch programs, creating special investigation cells, etc. Author Sonalde Desai stated that recent studies on child labour in India have found some pockets of industries in which children are employed, but overall, relatively few Indian children are employed. Child labour below the age of 10 is now rare. In the 10–14 age group, the latest surveys find only 2% of children working for wage, while another 9% work within their home or rural farms assisting their parents in times of high work demand such as sowing and harvesting of crops. According to a July 2024 Unicef-Innocenti study, child labour in India has declined substantially over the past decade as school enrollment has expanded nationwide. The report finds that most children now attend school full-time, and child labour is increasingly limited to specific vulnerable groups such as seasonal migrant families. While instances of hazardous or exploitative work still exist, UNICEF notes that these cases are far less common than in previous decades, reflecting the impact of education access, midday-meal schemes, and rural livelihood programmes. The study emphasizes that continued policy attention is needed, but the long-term trend shows steady reductions in children's involvement in labour. Diaspora remittance India has the largest diaspora around the world, an estimated 32 million people according to the Ministry of External Affairs (India), many of whom work overseas and remit funds back to their families. The Middle East region is the largest source of employment for expat Indians. The crude oil production and infrastructure industry of Saudi Arabia employs over 2 million expat Indians. Cities such as Dubai and Abu Dhabi in United Arab Emirates have employed another 2 million Indians during the construction boom in recent decades. In 2009–10, remittances from Indian migrants overseas stood at , the highest in the world, but their share in FDI remained low at around 1%. Trade unions In India, the Trade Union movement is generally divided on political lines. According to provisional statistics from the Ministry of Labour, trade unions had a combined membership of 24,601,589 in 2002. As of 2008, there are 12 Central Trade Union Organisations (CTUO) recognized by the Ministry of Labour. The forming of these unions was a big deal in India. It led to a big push for more regulatory laws which gave workers a lot more power. AITUC is the oldest trade union in India. It is a left supported organization. A trade union with nearly 2,000,000 members is the Self Employed Women's Association (SEWA) which protects the rights of Indian women working in the informal economy. In addition to the protection of rights, SEWA educates, mobilizes, finances, and exalts their members' trades. Multiple other organizations represent workers. These organizations are formed upon different political groups. These different groups allow different groups of people with different political views to join a Union. == Income and consumption ==
Income and consumption
of India compared to other countries per World Bank data tables India's gross national income per capita had experienced high growth rates since 2002. It has increased from ₹19,040 in 2002–03 to ₹1,88,892 in 2024, This translates to approximately $2,268. India's GNI per capita has seen considerable growth in the last 10 years. While specific average growth rates are not consistently reported, the available data indicates a positive trend. For example, India's GNI per capita increased by 6.72% in 2023, reaching $2,540. In comparison, the per capita income at constant (2011–12) prices increased by 35.12% between 2014–15 and 2022-23. This indicates a positive trend in both nominal and real terms. The estimated GNI per capita for India in 2025 is $2,878 (nominal) at current prices, according to the IMF World Economic Outlook. According to 2011 census data, India has about 330 million houses and 247 million households. The household size in India has dropped in recent years, the 2011 census reporting 50% of households have four or fewer members, with an average of 4.8 members per household including surviving grandparents. These households produced a GDP of about $1.7 trillion. Consumption patterns note: approximately 67% of households use firewood, crop residue, or cow-dung cakes for cooking purposes; 53% do not have sanitation or drainage facilities on premises; 83% have water supply within their premises or from their house in urban areas and from the house in rural areas; 67% of the households have access to electricity; 63% of households have landline or mobile telephone service; 43% have a television; 26% have either a two- or four-wheel motor vehicle. Compared to 2001, these income and consumption trends represent moderate to significant improvements. Income inequality Poverty In May 2014, the World Bank reviewed and proposed revisions to its poverty calculation methodology of 2005 and purchasing-power-parity basis for measuring poverty. According to the revised methodology, the world had 872.3 million people below the new poverty line, of which 179.6 million lived in India. With 17.5% of the total world's population, India had a 20.6% share of the world's poorest in 2013. According to a 2005–2006 survey, India had about 61 million children under the age of 5 who were chronically malnourished. A 2011 UNICEF report stated that between 1990 and 2010, India achieved a 45 percent reduction in mortality rates under the age of 5, and now ranks 46th of 188 countries on this metric. Since the early 1960s, successive governments have implemented various schemes to alleviate poverty, under central planning, that have met with partial success. In 2005, the government enacted the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), guaranteeing 100 days of minimum wage employment to every rural household in all the districts of India. In 2011, it was widely criticised and beset with controversy for corrupt officials, deficit financing as the source of funds, poor quality of infrastructure built under the programme, and unintended destructive effects. Other studies suggest that the programme has helped reduce rural poverty in some cases. Yet other studies report that India's economic growth has been the driver of sustainable employment and poverty reduction, though a sizeable population remains in poverty. India lifted 271 million people out of poverty between 2006 and 2016, recording the fastest reductions in the multidimensional poverty index values during the period with strong improvements in areas such as assets, cooking fuel, sanitation, and nutrition. On the 2019 Global Hunger Index India ranked 102nd (out of 117 countries) with a score of 30.3, being categorized as 'serious' in severity. In 2024, India ranked 105 (out of 127 countries) with a score of 27.3, indicating an improvement in its hunger situation. According to the World Bank’s Spring 2025 Poverty and Equity Brief, approximately 171 million people in India moved out of extreme poverty between 2011 and 2023. During this period, the country's poverty rate declined significantly from 16.2% to 2.3%, based on the international poverty line of $2.15 per day. == Budget, fiscal policy and Taxation==
Currency
's headquarters in Mumbai, India Foreign reserves Exchange rates Overview The Indian rupee () is the only legal tender in India, and is also accepted as legal tender in neighbouring Nepal and Bhutan, both of which peg their currency to that of the Indian rupee. The rupee previously was divided into 100 paise, which no longer exist for public use. The highest-denomination banknote was the 2,000 note until 30 September 2023 after which it was scrapped and ₹500 note became the highest denomination; the lowest-denomination coin in circulation is the ₹1 coin. In 2017, demonetisation was announced in which ₹500 and ₹1000 notes were withdrawn and new ₹500 notes were issued. India's monetary system is managed by the Reserve Bank of India (RBI), the country's central bank. Established on 1 April 1935 and nationalised in 1949, the RBI serves as the nation's monetary authority, regulator and supervisor of the monetary system, banker to the government, custodian of foreign exchange reserves, and as an issuer of currency. It is governed by a central board of directors, headed by a governor who is appointed by the Government of India. The benchmark interest rates are set by the Monetary Policy Committee. The rupee was linked to the British pound from 1927 to 1946, and then to US dollar until 1975 through a fixed exchange rate. It was devalued in September 1975 and the system of fixed par rate was replaced with a basket of four major international currencies: the British pound, US dollar, the Japanese yen and the Deutsche Mark. In 1991, after the collapse of its largest trading partner, the Soviet Union, India faced the major foreign exchange crisis and the rupee was devalued by around 19% in two stages on 1 and 2 July. In 1992, a Liberalized Exchange Rate Mechanism (LERMS) was introduced. Under LERMS, exporters had to surrender 40 percent of their foreign exchange earnings to the RBI at the RBI-determined exchange rate; the remaining 60% could be converted at the market-determined exchange rate. In 1994, the rupee was convertible on the current account, with some capital controls. After the sharp devaluation in 1991 and transition to current account convertibility in 1994, the value of the rupee has been largely determined by market forces. The rupee has been fairly stable during the decade 2000–2010. In October 2022, rupee touched an all-time low 83.29 to US dollar. == Security markets ==
Security markets
(NSE) is the biggest stock exchange in India by trading volume as 96% trading occurs in NSE The development of Indian security markets began with the launch of the Bombay Stock Exchange (BSE) in July 1875 and the Ahmedabad Stock Exchange in 1894. Since then, 22 other exchanges have traded in Indian cities. In 2014, India's stock exchange market became the 10th largest in the world by market capitalisation, just above those of South Korea and Australia. India's two major stock exchanges, BSE and the National Stock Exchange of India, had a market capitalisation of US$1.71 trillion and US$1.68 trillion according to the World Federation of Exchanges, which grew to $3.36 trillion and $3.31 trillion respectively by September 2021. The initial public offering (IPO) market in India has been small compared to NYSE and NASDAQ, raising US$300 million in 2013 and US$1.4 billion in 2012. Ernst & Young stated that the low IPO activity reflects market conditions, slow government approval processes, and complex regulations. Before 2013, Indian companies were not allowed to list their securities internationally without first completing an IPO in India. In 2013, these security laws were reformed and Indian companies can now choose where they want to list first: overseas, domestically, or both concurrently. Further, security laws have been revised to ease overseas listings of already-listed companies, to increase liquidity for private equity and international investors in Indian companies. == Foreign trade and investment ==
Foreign trade and investment
Foreign trade India's foreign trade by year Until the liberalisation of 1991, India was largely and intentionally isolated from world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around $200 million annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians. India's exports were stagnant for the first 15 years after independence, due to general neglect of trade policy by the government of that period; imports in the same period, with early industrialisation, consisted predominantly of machinery, raw materials and consumer goods. Since liberalisation, the value of India's international trade has increased sharply, with the contribution of total trade in goods and services to the GDP rising from 16% in 1990–91 to 47% in 2009–10. Foreign trade accounted for 48.8% of India's GDP in 2015. Globally, India accounts for 1.44% of exports and 2.12% of imports for merchandise trade and 3.34% of exports and 3.31% of imports for commercial services trade. In 2006–07, major export commodities included engineering goods, petroleum products, chemicals and pharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron ore and other minerals. Major import commodities included crude oil and related products, machinery, electronic goods, gold and silver. In November 2010, exports increased 22.3% year-on-year to , while imports were up 7.5% at . The trade deficit for the same month dropped from in 2009 to in 2010. India is a founding-member of General Agreement on Tariffs and Trade (GATT) and its successor, the WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of labour, environmental issues and other non-tariff barriers to trade in WTO policies. In 2019, India secured 43rd place in competitiveness. Balance of payments current account balance 1980–2008 based on IMF data Since independence, India's balance of payments on its current account has been negative. Since economic liberalisation in the 1990s, precipitated by a balance-of-payment crisis, India's exports rose consistently, covering 80.3% of its imports in 2002–03, up from 66.2% in 1990–91. However, the global economic slump followed by a general deceleration in world trade saw the exports as a percentage of imports drop to 61.4% in 2008–09. India's growing oil import bill is seen as the main driver behind the large current account deficit, The Indian economy has run a trade deficit every year from 2002 to 2012, with a merchandise trade deficit of US$189 billion in 2011–12. Its trade with China has the largest deficit, about $31 billion in 2013. India's reliance on external assistance and concessional debt has decreased since liberalisation of the economy, and the debt service ratio decreased from 35.3% in 1990–91 to 4.4% in 2008–09. In India, external commercial borrowings (ECBs), or commercial loans from non-resident lenders, are being permitted by the government for providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates them through ECB policy guidelines issued by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act of 1999. India's foreign exchange reserves have steadily risen from $5.8 billion in March 1991 to ₹38,832.21 billion (US$540 billion) in July 2020. In 2012, United Kingdom announced an end to all financial aid to India, citing the growth and robustness of Indian economy. India's current account deficit reached an all-time high in 2013. India has historically funded its current account deficit through borrowings by companies in the overseas markets or remittances by non-resident Indians and portfolio inflows. From April 2016 to January 2017, RBI data showed that, for the first time since 1991, India was funding its deficit through foreign direct investment inflows. The Economic Times noted that the development was "a sign of rising confidence among long-term investors in Prime Minister Narendra Modi's ability to strengthen the country's economic foundation for sustained growth". Foreign direct investment As the third-largest economy in the world in PPP terms, India has attracted foreign direct investment (FDI). During the year 2011, FDI inflow into India stood at $36.5 billion, 51.1% higher than the 2010 figure of $24.15 billion. India has strengths in telecommunication, information technology and other significant areas such as auto components, chemicals, apparels, pharmaceuticals, and jewellery. Despite a surge in foreign investments, rigid FDI policies were a significant hindrance. Over time, India has adopted a number of FDI reforms. India liberalised its FDI policy in 2005, allowing up to a 100% FDI stake in ventures. Industrial policy reforms have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and investment. The upward growth curve of the real-estate sector owes some credit to a booming economy and liberalised FDI regime. In March 2005, the government amended the rules to allow 100% FDI in the construction sector, including built-up infrastructure and construction development projects comprising housing, commercial premises, hospitals, educational institutions, recreational facilities, and city- and regional-level infrastructure. Between 2012 and 2014, India extended these reforms to defence, telecom, oil, retail, aviation, and other sectors. From 2000 to 2010, the country attracted $178 billion as FDI. The inordinately high investment from Mauritius is due to routing of international funds through the country given significant tax advantages – double taxation is avoided due to a tax treaty between India and Mauritius, and Mauritius is a capital gains tax haven, effectively creating a zero-taxation FDI channel. FDI accounted for 2.1% of India's GDP in 2015. Outflows Since 2000, Indian companies have expanded overseas, investing FDI and creating jobs outside India. From 2006 to 2010, FDI by Indian companies outside India amounted to 1.34 per cent of its GDP. Indian companies have deployed FDI and started operations in United States, Europe and Africa. The Indian conglomerate Tata Group is United Kingdom's largest manufacturer and private-sector employer. Remittances In 2015, a total of US$68.91 billion was made in remittances to India from other countries, and a total of US$8.476 billion was made in remittances by foreign workers in India to their home countries. UAE, US, and Saudi Arabia were the top sources of remittances to India, while Bangladesh, Pakistan, and Nepal were the top recipients of remittances from India. Remittances to India accounted for 3.32% of the country's GDP in 2015. Here is a list of the top 10 deals with Indian companies participating: == Economic issues ==
Economic issues
Corruption in other countries as compared to India in 2023; a higher score indicates lower levels of corruption Corruption has been a pervasive problem in India. A 2005 study by Transparency International (TI) found that more than half of those surveyed had first-hand experience of paying a bribe or peddling influence to get a job done in a public office in the previous year. In 2011, TI ranked India at 95th place amongst 183 countries in perceived levels of public sector corruption. By 2016, India saw a reduction in corruption, and its ranking improved to 79th place. In 1996, red tape, bureaucracy, and the Licence Raj were suggested as a cause for institutionalised corruption and inefficiency. More recent reports suggest the causes of corruption include excessive regulations and approval requirements, mandated spending programs, monopoly of certain goods and service providers by government-controlled institutions, bureaucracy with discretionary powers, and lack of transparent laws and processes. Computerisation of services, various central and state vigilance commissions, and the 2005 Right to Information Act – which requires government officials to furnish information requested by citizens or face punitive action – have considerably reduced corruption and opened avenues to redress grievances. In 2011, the Indian government concluded that most spending fails to reach its intended recipients, as the large and inefficient bureaucracy consumes budgets. India's absence rates are among the worst in the world; one study found that 25% of public sector teachers and 40% of government-owned public-sector medical workers could not be found at the workplace. Similarly, many issues are facing Indian scientists, with demands for transparency, a meritocratic system, and an overhaul of the bureaucratic agencies that oversee science and technology. India has an underground economy, with a 2006 report alleging that India topped the worldwide list for black money with almost $1,456 billion stashed in Swiss banks. This would amount to 13 times the country's total external debt. These allegations have been denied by the Swiss Banking Association. James Nason, the Head of International Communications for the Swiss Banking Association, suggested "The (black money) figures were rapidly picked up in the Indian media and in Indian opposition circles, and circulated as gospel truth. However, this story was a complete fabrication. The Swiss Bankers Association never published such a report. Anyone claiming to have such figures (for India) should be forced to identify their source and explain the methodology used to produce them." A Step was taken by Prime Minister Modi, on 8 November 2016, involved the demonetization of all 500 and 1000 rupee bank notes (replaced by new 500 and 2000 rupee notes) to return black money into the economy followed by criticism that the measure was deemed ineffective by economists and negatively affected the poorest people of India. This demonetisation together with the introduction of the goods and services tax(GST) is believed to be responsible for the slowdown in growth. Literacy rates , established in 1857, was the first multidisciplinary and secular Western-style institution in Asia. India has made progress in increasing the primary education attendance rate and expanding literacy to approximately three-fourths of the population. India's literacy rate had grown from 52.2% in 1991 to 74.04% in 2011. The right to education at the elementary level has been made one of the fundamental rights under the Eighty-Sixth Amendment of 2002, and legislation has been enacted to further the objective of providing free education to all children. However, the literacy rate of 74% is lower than the worldwide average, and the country suffers from a high drop-out rate. Literacy rates and educational opportunities vary by region, gender, urban and rural areas, and among different social groups. Economic disparities , and GDP per capita basis in 2011 A critical problem facing India's economy is the sharp and growing regional variations among India's different states and territories in terms of poverty, availability of infrastructure, and socio-economic development. Six low-income states – Assam, Chhattisgarh, Nagaland, Madhya Pradesh, Odisha, and Uttar Pradesh – are home to more than one-third of India's population. Severe disparities exist among states in terms of income, literacy rates, life expectancy, and living conditions. The four states of Maharashtra, Tamil Nadu, Gujarat and Karnataka alone are projected to account for almost 50% of India's GDP by 2030; the five South Indian states are projected to contribute 35% of India's GDP by 2030 despite currently having 20% of India's population. The five-year plans, especially in the pre-liberalisation era, attempted to reduce regional disparities by encouraging industrial development in the interior regions and distributing industries across states. The results have been discouraging as these measures increased inefficiency and hampered effective industrial growth. The more advanced states have been better placed to benefit from liberalisation, with well-developed infrastructure and an educated and skilled workforce, which attract the manufacturing and service sectors. Governments of less-advanced states have tried to reduce disparities by offering tax holidays and cheap land and focused on sectors like tourism, which can develop faster than other sectors. India's income Gini coefficient is 33.9, according to the United Nations Development Programme (UNDP), indicating overall income distribution to be more uniform than East Asia, Latin America, and Africa. According to a 2021 report by the Pew Research Center, India has roughly 1.2 billion lower-income individuals, 66 million middle-income individuals, 16 million upper-middle-income individuals, and 2 million in the high-income group. As per The Economist, 78 million of India's population are considered middle class as of 2017, if defined using the cutoff of those making more than $10 per day, a standard used by the India's National Council of Applied Economic Research. India has achieved significant reductions in both monetary and multidimensional poverty in recent years. According to the World Bank's 2025 Poverty & Equity Brief, India's extreme poverty rate, measured at the international poverty line of $2.15 per day (2017 PPP), declined from 16.2% in 2011–12 to 2.3% in 2022–23, lifting approximately 171 million people out of extreme poverty. In terms of multidimensional poverty, a United Nations Development Programme (UNDP) report found that India was among 25 countries that halved their global Multidimensional Poverty Index (MPI) values within 15 years (2005–06 to 2019–21), with an estimated 415 million people exiting multidimensional poverty during that period. Climate change Several banks including State Bank of India, Axis Bank, ICICI Bank and HDFC Bank have taken the lead in funding green projects even as the Reserve Bank of India comes up with norms for lenders to disclose their actions on climate risk. RBI in an earlier report in 2022, had said that climate change would require "intensive capital mobilisation" for that India needs $17.77 trillion. The RBI recommends that regulated entities rely upon the Task Force on Climate-related Financial Disclosures (TCFD) framework, the most prominent climate disclosure framework globally, at least at the initial stage. India is home to 75 per cent of the world's wild tiger population. The big cats like lion, tiger, leopard, cheetah, snow leopard, jaguar and puma were on the brink of extinction. With hunting and encroachment, their numbers dropped to a mere 20. Efforts to save the lion started before Independence but it was in 1965 that the Indian Forest Service stepped in to set up a conservation programme. Researchers believe a combination of factors is driving the unprecedented migration in tigers. Rising temperatures due to climate change are making the lower foothills less hospitable. == See also ==
Source: Wikipedia ↗
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