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flag India India: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

The Republic of India is one of the tenth largest economy in the world. In 2013, the country experienced weak growth (3.8%) due to the unfavourable international economic situation and weak performance of its manufacturing and mining sectors. Better results are expected in the fiscal year 2013-2014 (4.9%) thanks to good performace of the agricultural sector which should stimulate consumption.

The populist measures adopted in 2008 destabilised state finances. the Government's priority is therefore to reduce its budget deficit and current accounts deficit. The aim of the 2013-2014 budget aims to achieve "inclusive growth" by increasing public spending by 16%. It provides €140m to create a fund for the security and empowerment of women, establish a bank reserved for women, increases the defense budget as part of the modernization of the Indian Army; a tax increase of 10% for the richest parts of the population, a tax increase on certain luxury goods and tobacco and an expansion of the "direct cash transfer" program for the poor. The interim budget for 2014-2015 (adopted in order to cover the government's expenses until its mandate ends in May) plans to reduce the deficit to 4.6% of the GDP and then to 4.1% in the following year. It confirms the goals of budget consolidation, boosting growth and strenghtening the manufacturing sector. The central bank's priority is to control inflation as well as attract foreign capital and limit capital outflow. Industry remains the country's weak point since the sector is struggling with frequent power cuts, a difficult acceess to property and an excessively rigid labour legislation. The finance minister P Chidambaram has also announced a ten-point agenda to make India the third largest economic power by 2043. In parallel, the role of economic growth as a driver of development has been questioned, especially regarding the healthcare and education sectors.

India remains a poor country: the GDP per capita is low, almost 25% of the population still lives below the poverty line and the inequalities are very strong. Half of the children under 5 years of age suffer from malnutrition. Unemployment affects around 7% of the workforce.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 1,880.101,858.751,876.812,047.81e2,247.58
GDP (Constant Prices, Annual % Change) 6.64.75.05.6e6.4
GDP per Capita (USD) 1,5531,5151e1,626e1,761
General Government Balance (in % of GDP) -8.4-7.5-7.2e-7.1e-6.6
General Government Gross Debt (in % of GDP) 66.866.661.5e60.559.5
Inflation Rate (%) 9.510.29.57.8e7.5
Current Account (billions USD) -78.15-88.16-32.40-42.55-50.19
Current Account (in % of GDP) -4.2-4.7-1.7-2.1-2.2

Source: IMF - World Economic Outlook Database ; CIA - The world factbook , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

India is the world's fourth agricultural power. Agriculture contributes to about 14% of the GNP and employs over 60% of the active population. The main agricultural products are: wheat, millet, rice, corn, sugar cane, tea, potatoes and cotton. India is also the second producer of cattle, third producer of sheep and fourth in fishing production. 

Coal is the country's main energy source (India is the third largest world producer of coal). In the manufacturing industry, textile plays a predominant role. In terms of size, the chemical industry is the second largest industrial sector (12% of the GNP).

The services sector is the most dynamic part of the Indian economy. It contributes to more than 55% of its GDP, and it only employs over a fourth of its active population (approximately 471 million workers). The software sector, which grows rapidly, is boosting the export of services and modernizing the Indian economy.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 47.2 24.7 28.1
Value Added (in % of GDP) 18.2 24.8 57.0
Value Added (Annual % Change) 4.7 0.4 6.8

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Indian Rupee (INR) - Average Annual Exchange Rate For 1 USD 48.4145.7346.6753.4458.60

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about India on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
55.7/100
Position:
Mostly Unfree
World Rank:
120/178
Regional Rank:
24/25

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.08
World Rank:
57/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

India was a protectionist state for a long time, but the country has become progressively more open to international trade. It has recently signed free trade agreements with South Korea and the ASEAN, and has entered into negotiations with several partners (EU, MERCOSUR, Australia, New Zealand, South Africa). India is the world's seventh largest exporter and importer of commercial services. Trade represents almost 50% of the country's GDP.

The country has a trade deficit. India imports nearly 80% of its energy needs, and rising oil prices also increased its import bill. In 2013 the deficit diminished significantly due to a drop in imports - especially of gold - and a rise in exports encouraged by the devaluation of the currency against the dollar. In January 2014, the deficit stood at 120 billion USD, as opposed to nearly 170 billion USD for the same period in the previous year. 

The main trade partners of India are the European Union, the United Arab Emirates, China and the United States.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 257,202350,234464,463488,591465,886
Exports of Goods (million USD) 164,907226,350302,905294,158312,406
Imports of Services (million USD) 80,274113,753123,889128,133126,769
Exports of Services (million USD) 90,193116,454138,161145,648152,587
Imports of Goods and Services (Annual % Change) -2.115.621.16.6-2.5
Exports of Goods and Services (Annual % Change) -4.719.615.65.08.4
Imports of Goods and Services (in % of GDP) 25.426.330.230.728.4
Exports of Goods and Services (in % of GDP) 20.022.023.924.024.8
Trade Balance (million USD) -79,950-93,353-120,174-151,929-114,651
Trade Balance (Including Service) (million USD) -67,410-91,024-106,687-136,063-92,257
Foreign Trade (in % of GDP) 45.548.354.154.753.2

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
United States 12.5%
United Arab Emirates 10.1%
China 4.9%
Singapore 4.2%
Hong Kong 4.1%
See More Countries 64.3%
Main Suppliers
(% of Imports)
2013
China 11.1%
Saudi Arabia 7.9%
United Arab Emirates 7.1%
Switzerland 5.3%
United States 4.8%
See More Countries 63.9%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 19.9%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 8.6%
Articles of jewellery and parts thereof, of...Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal (excl. articles > 100 years old) 3.2%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.1%
RiceRice 2.4%
See More Products 62.8%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 31.8%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 8.1%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 4.9%
Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal 3.2%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 3.1%
See More Products 49.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2010
48.84%
18.61%
12.16%
11.38%
5.01%
1.53%
1.21%
0.45%
0.42%
0.29%
0.11%
- bn USD of services imported in 2010
39.03%
20.94%
15.67%
10.00%
3.73%
3.59%
2.10%
1.76%
1.46%
1.04%
0.69%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Finance
Ministry of Agriculture
Ministry of Commerce and Industry
Ministry of Micro, Small and Medium Enterprises
Statistical Office
Directorate General of Commercial Intelligence & Statistics
Central Bank
Reserve Bank of India
Stock Exchange
National Stock Exchange
Bombay Stock Exchange
Search Engines
123India
Altavista India
Cyberindian
Indiaa2z
India Atlas
India Connect
Indiatimes
India-World
Indo Link
New India
Search India
Sify
Surf India
Web India
Yahoo! India
Economic Portals
Business World
Business Line
Business Standard
Business Today

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Political Outline

Executive Power

President is the chief of the state and is elected by an electoral college consisting of elected members of both houses of Parliament and the legislatures of the provinces for a five-year term.

Prime Minister is the head of the government and is chosen by parliamentary members of the majority party following legislative elections, to serve a term of five years. The President, on the recommendation of the Prime Minister, appoints the Cabinet.
Legislative Power
The legislature is bicameral. The Parliament consists of: Council of States and the People's Assembly. People of India enjoy considerable political rights.
Main Political Parties
India has a multi-party system with predominance of small regional parties.

The major political parties in the country are:

- Indian National Congress: a major political party involved in India's independence movement
- Bharatiya Janta Party: pro-Hindu, nationalist ideology,
- Communist Party of India: Marxism-Leninism,
- Bahujan Samajwadi Party: draws support from backward classes & religious minorities.

Current Political Leaders
President: Mr. Pranab Mukherjee (since July 2012) - INC
Prime Minister: Narendra Damodardas Modi (since 26 May 2014) – BJP
Next Election Dates
Presidential: July 2017
Legislative elections: May 2019
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
140/180
Evolution:
same place compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014