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In 2009, India's nominal GDP stood at
US$1.243 trillion, which makes it the
eleventh-largest economy in the world.
[135] If
PPP is taken into account, India's economy is the
fourth largest in the world at US$3.561 trillion,
[136] corresponding to a per capita income of US$3,100.
[137] The country ranks 139th in
nominal GDP per capita and 128th in
GDP per capita at PPP.
[135] With an average annual GDP growth rate of 5.8% for the past two decades, India is one of the
fastest growing economies in the world.
[138]
Before 1991, the Indian government followed
protectionist and
socialist-inspired policies because of which the Indian economy was largely closed to the outside world and suffered from
extensive state intervention and regulation.
[139] After an
acute balance of payments crisis, the nation
liberalised its economy and has since moved towards a
free-market economy.
[140][141] Since then, the emphasis has been to use foreign trade and investment as integral parts of India's economy.
[142] Currently, India's economic system is portrayed as a
capitalist model with the influx of private enterprise.
[141]
India has the world's
second largest labour force, with 467 million people.
[143] In terms of output, the
agricultural sector accounts for 28% of GDP; the service and industrial sectors make up 54% and 18% respectively. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes.
[78] Major industries include textiles, telecommunications, chemicals, food processing, steel, transport equipment, cement, mining, petroleum, machinery and software.
[78] India's external trade has reached a relatively moderate share of 24% of GDP in 2006, up from 6% in 1985.
[140] In 2008, India's share of world trade was about 1.68%;
[144] in 2009, it was the world's
fifteenth largest importer and
eighteenth largest exporter.
[145] Major exports include petroleum products, textile goods, gems and jewelry, software, engineering goods, chemicals, and leather manufactures.
[78] Major imports include crude oil, machinery, gems, fertiliser, chemicals.
[78]
Tata Nano, the world's cheapest car.
[146] India's annual car exports have surged fivefold in the past five years.
[147] During the late 2000s, India's economic growth averaged 7.5% a year.
[140] Over the past
decade, hourly wage rates in India have more than doubled.
[148] According to a 2007
McKinsey Global Institute report, since 1985, India's robust economic growth has shifted 431 million Indians out of poverty and by 2030, India's middle class population will rise to more than 580 million people.
[149] In 2009, the
Global Competitiveness Report ranked India 16th in
financial market sophistication, 24th in banking sector, 27th in business sophistication and 30th in innovation; ahead of several advanced economies.
[150] Seven of the world's top 15
technology outsourcing companies are based in India and the country is viewed as the second most favourable outsourcing destination after the United States.
[151] India's consumer market is currently the world's
thirteenth largest and is expected to become the fifth largest by 2030.
[149] India has the world's fastest growing
telecommunication industry, adding about 10 million subscribers during 2008–09 period.
[152] The country has the world's second fastest growing
automobile industry, with domestic sales increasing by 26% during the 2009–10 period
[153] and exports increasing by 36% during the 2008–09 period.
[154]
Despite India's impressive economic growth over recent decades, it still contains the
largest concentration of poor people in the world.
[155] The percentage of people living below the
World Bank's international poverty line of $1.25 a day (
PPP, in nominal terms
21.6 a day in urban areas and
14.3 in rural areas in 2005) decreased from 60% in 1981 to 42% in 2005.
[156] Since 1991, inter-state
economic inequality in India has consistently grown; the per capita
net state domestic product of India's richest states is about 3.2 times that of the poorest states.
[157] Even though India has avoided
famines in recent decades, half of children are
underweight[158] and about 46% of Indian children under the age of three suffer from
malnutrition.
[155][159][160]
A 2007
Goldman Sachs report projected that "from 2007 to 2020, India’s GDP per capita will quadruple," and that the Indian GDP will surpass that of the United States before 2050, but India "will remain a low-income country for several decades, with per capita incomes well below its other BRIC peers."
[161] Although the Indian economy has grown steadily over the last two decades; its growth has been uneven when comparing different social groups, economic groups, geographic regions, and rural and urban areas.
[155] The World Bank suggests that India must continue to focus on public sector reform, infrastructure, agricultural and rural development, removal of labour regulations, improvement in transport, energy security, and health and nutrition.
