Indian Economy Overview

India has the twelfth largest economy in the world. It has Purchasing Power Parity GDP at 1.5 trillion US Dollars, with a per capita income of 4,542 US Dollars. The process of privatization in India is continuous.

The government controls Indian economy. The government's economic approach has been partially influenced by the Socialist movement. It has a high level of control in certain areas of the economy like foreign trade or the participation of the private sector. The World Bank classes India as an economy with low-income. More and more investors think that the Indian market might be undervalued and they see this as a good buying opportunity.

There is still a big difference between the rich population and the poor. One of the major issues in India is still the level of poverty, although there has been improvement over the past few years. Poverty is higher in the rural areas, because here people take income mostly out of agriculture, which depends on the monsoon season and the weather in general. Lack of rain for irrigation can lead to a minimal production of crops in certain years. The rate of new births is also alarming. The family unit in India is usually quite large. Birth control policies, like China's 'One Child' policy, are taken into consideration in order to limit the number of people living in poverty.

A huge workforce is what characterizes the dynamic and expansive Indian economy. It is very diverse, with a wide range of sectors: manufacturing industry, handcrafts, textiles, services and agriculture, the last being the source of income for over 66 per cent of the population. India is in the second largest country in the world in volume of output, from the point of view of agriculture. In 2005, the agricultural sector contributed 18.6% to the country's GDP. There has been a growth in the manufacturing sector from 8.98% in 2005, to 12% in 2006.

The population who speaks English keeps growing, making India more appealing to the United Kingdom or the United States. The service sector is rapidly expanding. India now exports the services of more and more IT professionals. There has been a real boom in the IT industry, helping Indian economy grow at a considerable rate. In 2007, this growth rate was around 20%. India is also expected to make considerable progress in other areas such as pharmaceuticals, manufacturing, tourism, aviation, telecommunications or biotechnology.