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]
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.
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