India

Capital: New Delhi

Local time:
It is %T:%M %A in New Delhi

Exchange rate on :

GDP growth rate: 8.031% in 2012

FDI inward stock: 76 226 million USD in 2007

Country risk: See the country risk analysis from India provided by Ducroire.

Economic trends

India is amongst the world's 10 largest economies. The GDP growth average rate was 9.4% over the period 2006-07. It decreased in 2008 and reached 4.5% in 2009. From 2010, growth should bounce.

Despite the economic crisis, domestic demand remained strong. This should enable the country to reduce its trade deficit, which is still at almost USD 5 billion because of the fact that the country is highly dependent on imported petroleum products. With a rate of over 6% over the past year, India is facing an inflation surge due particularly to rising food prices. The public finances situation is also worrying, with a deficit of about 4.5% of the GDP. India remains a poor country with 25% of its population still living below the threshold of poverty.

Main branches of industry

India is the world's fourth agricultural power. Agriculture contributes about 20% of the GDP and employs almost two-thirds of the active population.

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 GDP).

Services sector is the most dynamic part of the Indian economy both in terms of employment potential and contribution to the national income. The rapidly growing software sector is boosting service exports and modernizing Indian economy.

International trade

India had been protectionist state for a long time, but from the begining of the 1990's, the country has gradually opened up to international exchanges. In 2008, India was the world's 26th biggest exporter and the 16th biggest importer. India shows a strong trade deficit, caused by the increase in prices of raw materials, which renders imports more expensive. As for exports, the increase is slower due to the appreciation of the rupie in relation to the dollar (most exports being made in dollars) and the contraction in global demand.
The Indian government lowered the customs duties and the others non-tariff barriers on all the sectors. Nevertheless, agriculture, insurance, and retail are still widely protected.