India, traditionally an agrarian economy has gradually developed into an open market economy after opening up to global competition. Free exchange market, liberalised foreign trade, and participation of foreign companies in form of FDI (foreign direct investment) are the new concepts describing Indian economy as of today.
An Overview of Indian economy
A significant shift was observed since 1990s in forms of investment strategies and external trade regulations to define the present more liberated India. Not only in Asia, but even globally, India is a dominant economic power. Many economists have predicated that India could become among the top two global economic powers in the coming few decades. A gradual but definitive shift is observed in the economic activity of India. Once a predominantly agriculture based economy, India has evolved into a market economy with sufficient investment opportunities in infrastructure, retail, finance and insurance, information technology, telecommunication, and manufacturing. Marked improvement was also observed in growth and development of human capital. Skilled work force and capable managers characterise human resource available in India.
Important Economic Indicators
Indian economy is among the top five globally based on PPP (Purchasing Power Parity). During 2010 - 2011 fiscal this worked out to US $4.06 trillion, and 1.54 trillion in terms of official exchange rate. GDP grew at a double digit figure of 10.4% as compared to previous financial year. The dominance of services or tertiary sector is substantiated by the fact that its contribution to GDP during 2010-2011 was 55.3% as compared to the manufacturing or secondary structure with 28.6%, and agricultural sector with 16.1%.
Though agricultural sector contributes 16.1% to India's GDP, it employs 52% of total available labour force. Industrial sector provides employment to 14% of available work force, and services sector to about 34%. Total investments amounted to 32% of Indian GDP as per estimates of 2010.
Agricultural and Industrial Products
India is among the leading producers of food grains internationally. Rice and wheat are the main food crops, with sizeable productions of millets and maize. Lentils and oilseeds also form significant agricultural produce. Among cash crops, tea, cotton, jute, and sugarcane stand out. India is among the largest growers of each of these cash crops which are exported.
Among industries, textiles, chemicals, steel, ship building, and engineering goods are traditional large scale industries. Petrochemicals, cement, mining machinery, automobiles and pharmaceuticals have developed to grow into major investment opportunities for both domestic and foreign investors. Industrial production growth rate has been calculated at 9.7% for fiscal 2010-2011.
Tea, cotton, apparels, jute products, chemicals, automobiles, iron and steel, precious stones, and petroleum products are the main exports form India. In the last fiscal India exported goods and services worth US $201 billion. Imports into India mainly constitute crude oil, fertilizer, machineries, precious stones, and chemicals. With the opening up of the Indian market, this country has become one of the favoured destinations for investment opportunities. Government of India and State Governments are inviting FDIs and implementing encouraging investment strategies.
India is credited with reserves of gold and foreign exchange amounting to US $284.1 billion. FDI has been estimated at US $191.1 billion for the period 2010-2011.