Economy
The Indian economy, the fifth¹ largest economy in the world after the US, China and Japan and among the fastest growing large economies in the world, accounts for approx. 4 per cent of the world's GDP. India's economy grew by 9.4 per cent in 2006-07. The growth rate in GDP has slowed down to 7.9 in the April-June 2008 quarter. India's fiscal deficit was 3.5 per cent in 2006-07. The annual growth rate for exports is in excess of 20 per cent. India has signed FTA's (Free Trade Agreement) with Thailand, Sri Lanka, Singapore and Nepal and is expected to have a FTA with ASEAN by May 2008. India is ranked as the 20th largest merchandise trading nation. The United States (India's total trade with the United States in 2005 was USD 26.8 bn) is India's largest trading partner at present followed by China (total trade amounted to USD 25.8 bn in 2006-07), UAE, Belgium and the UK. The trade deficit is expected to increase close to USD 50 bn in the current fiscal (USD 20.6 bn in Q1 2007/08). India is a member of the G-20 forum.
India's tax revenue to GDP ratio remains very low at around 10 % in comparison to rates of upto 30 % and over in many OECD countries. The Government of India's total tax (direct and indirect) collections are estimated to amount to approx. Rs 5.5 trillion in the year ending March 2008. A large section of the employed workforce is exempt from any Income tax as the taxfree annual income limit has been raised to Rs 150,000 (Rs 180,000 for women and Rs 225,000 for senior citizens). 47 million Indian residents have a PAN (Permanent Account Number).
¹ based on Purchasing Power Parity adjusted GDP World Bank figures
Economic Indicators
- GDP (Gross Domestic Product)
- - On the basis of Purchasing Power Parity (PPP) - 2005 World Bank est.: USD 3.8 trillion
- - GDP at market price (2006-07): Rs 41.26 trillion
- WPI (Wholesale Price Index) Annual Rate - 8.11.08 : 8.9 %
- GDP Growth (2006/07) - 9.4 %
- GDP at Current Prices (2003-04): Rs 25.198 trillion
- Domestic Savings Rate (of GDP): 28.1 % (Rs 7.8 trillion)
- Union Budget (2004-05) Total Expenditure: Rs 4.57 trillion
- India's Global Competitiveness Ranking¹ (2006-07): 43
- Exports April'06-March'07: USD 124.6 bn
- Imports April'06-March'07: USD 181.4 bn
- GDP Growth (2006/07) - 9.4 %
Foreign Trade
India is a relatively small merchandise exporting (28th largest exporter) nation with exports valued at USD 127 bn in 2006-07. India's trade deficit has grown to almost USD 58 bn for the first three quarters of 2007-08 mainly due to an increase in oil prices. India is ranked at 10th position in services exports, which amounted to USD 81 bn in the same year. Services exports include software services and miscellaneous business services.
| 2008 | Exports | Imports |
|---|---|---|
| August | 16.0 | 29.9 |
| June | 14.7 | 24.5 |
| May | 13.8 | 24.5 |
| April | 14.4 | 24.3 |
| February | 14.2 | 18.5 |
| 2007 | Exports | Imports |
| December | 12.3 | 17.7 |
| November | 12.4 | 19.8 |
| June | 11.9 | 19.2 |
| April | 10.6 | 17.6 |
| March | 12.6 | 16.4 |
| January | 9.6 | 15.4 |
| 2006 | Exports | Imports |
| December | 10.6 | 15.0 |
| November | 9.7 | 15.9 |
| October | 9.6 | 15.8 |
| August | 10.4 | 13.9 |
| July | 10.2 | 14.1 |
| June | 9.9 | 13.9 |
| May | 9.4 | 13.2 |
| April | 8.2 | 12.6 |
| March | 10.9 | 13.8 |
| February | 7.8 | na |
| January | 8.5 | 11.3 |
| 2005 | Exports | Imports |
| November | 6.2 | 9.9 |
| October | 8.1 | 11.4 |
| September | 7.3 | 10.5 |
| August | 7.4 | 10.5 |
| July | 7.2 | 9.9 |
| June | 7.1 | 11.1 |
| May | 7.2 | 10.8 |
| April | 6.6 | 10.2 |
| February | 6.7 | 9.3 |
| January | 6.7 | 9.6 |
| 2004 | ||
| December | 6.8 | 9.4 |
| November | 7.0 | 9.1 |
| Q1-Q3/2005-06 | ||
| April-January 2006 | 74.9 | 108.8 |
More data on foreign trade is available at the Directorate General of Commercial Intelligence and Statistics website.
India's 20 Largest Companies By Sales
Five Indian companies, namely IndianOil, Reliance Industries Ltd., BPCL, HPCL and ONGC are listed on the Fortune Global 500 list for the year 2005. India's largest company, IndianOil, with a turnover of USD 34.4 bn, placing it at the 170th position on the list.
| Company | Net Sales 2006/07 (Rs bn) | Net Profit (Rs bn) | Market Capitalisation (Rs bn) ² |
|---|---|---|---|
| IndianOil | 2558 | 75 (FY07) | 517 |
| Reliance Industries | 1183 | 109 (FY07) | 729 |
| Hindustan Petroleum | 994 | 13* | 119 |
| Bharat Petroleum | 1095 | 48 | 125 |
| Coal India Ltd. | 307 | - | - |
| ONGC | 597 | 122* | 1137 |
| SAIL | 413 | 62 (FY07) | 500 |
| BSNL | 310 | 14¹ | Unlisted |
| NTPC | 328) | 67 (FY07) | 708 (8.4.05) |
| Reliance Communications | 145 (FY07) | 32 (FY07) | - |
| Grasim Industries | 141 (FY07) | 20 (FY07) | 125 |
| Larsen & Toubro | 180 | 10* | 125 |
| Tata Motors | 311 | 19 (FY07) | 177 |
| GAIL | 193 | 36 | 186 |
| Maruti Udyog | 175 | 13* | 129 |
| Tata Steel | 198 | 35 | 211 |
| Ispat Industries | 140 | - | - |
| ITC | 188 | ||
| BHEL | 192 | 10* | 177 |
| MMTC | 232 | 1 | 13 |
| NMDC | 428 | - | - |
| MRPL | 344 | - | - |
| Hindalco | 199 | 26 (FY07) | 119 |
| Chennai Petro | 310 | - | - |
* Relates to 2004-05 figures
¹ Relates to 2002-03 figures
² As on 28/01/05
³ Year ending 12/03
Source: Primarily Business Standard BS 1000
Selected Industries
Iron and Steel
The new National Steel Policy envisages steel production to increase to 100 MMT by the year 2020 from the current level of just below 51 MMT (2006-07). The world's largest steel company, Mittal Steel, South Korean POSCO and Tata Steel have announced massive steel production facilities in the mineral rich states of Orissa and Jharkhand. India is currently the seventh largest steel producer in the world. India is the third largest iron ore exporter after Australia and Brazil and exports mainly to China.
- Finished (Carbon) Steel production (2006-07): 49.4 million tonnes
- Ministry of Steel
- Indian Steel Alliance
- The Indian Stainless Steel Development Association
- Ministry of Steel
A view of the Vizag Steel Plant located just south of the port city of Visakhapatnam, Andhra Pradesh. The plant rolled out 3.2 million tons of saleable steel in 2005-06 and is expanding its annual saleable steel capacity to 5.72 million tons by 2008-09.
Coal
India's proved coal reserves (incl. anthracite, bituminous, sub-bituminous and lignite) were estimated to be approx. 92.4 billion tonnes in 2006 (around 10 per cent of the world total reserves), the fourth largest in the world after USA, Russia and China. Non-coking coal reserves amount to 86 %. Thermal power utilities are the largest consumers of coal (approx. 2/3 of production) followed by the steel and cement industries. Coal production has increased from 30 million tonnes in 1947 to 462 million (incl. lignite) tonnes during 2006-07 making India the third largest producer and consumer behind China and the USA.
- Coal (incl. lignite) production (2004-05): 413 million tonnes
- Ministry of Coal
- Coal India Limited
- The Singareni Collieries Company Limited
- Neyveli Lignite Corp. Ltd.
- Ministry of Coal
Aluminium
- Aluminium production (2006-07): 719,000 MT
- Ministry of Mines
- National Aluminium Company Limited (Nalco)
- Bharat Aluminium Company Limited (BALCO)
- Madras Aluminium Company Limited (MALCO)
- Hindalco
- Ministry of Mines
Copper and Zinc
India has approx. ½ billion tonnes of recoverable reserves of copper.
- Refined Copper Production: 512,000 tonnes
- International Copper Promotion Council (India) - ICPCI
- Sterlite Industries
- Hindustan Copper Ltd.
- Birla Copper
- Hindustan Zinc Ltd.
- International Copper Promotion Council (India) - ICPCI
A view of the 80 000 tpa Hindustan Zinc Ltd. Debari zinc smelter located near Udaipur, Rajasthan.
Cement
India is the second largest cement producing nation in the world after China. Foreign players in the cement market include Lafarge, Italcementi, Holcim and Heidelberg Cement. The industry's turnover is around Rs 300 billion providing direct employment to 150,000 persons. India is capable of producing cement to any standard requirements (BS, ASTM, DIN). Major cement producers include ACC, Grasim Industries and Gujarat Ambuja.
- Cement production (2007-08): 168.3 million tonnes
- Cement production capacity (July 2007): 171 million tonnes per annum
- Cement Manufacturers' Association
- Cement production capacity (July 2007): 171 million tonnes per annum
Textile
The Indian textile industry is one of the largest of its kind in the world and the largest yarn producer. The industry's total output is valued at approx. Rs 1.6 trillion (exports account for roughly a third of total output) and provides employment to 15 million people. The recent withdrawal of the MFA quota system should strenghten India's position in the world textile marketplace. Some studies indicate India's share in textile exports will increase to 15 per cent from the present 3 per cent of global textile trade market. India exported USD 17.1 bn worth of textiles and clothing in 2005-06. The appreciation of the Indian rupee against the weakening US dollar has hit hard on many textile and apparel exporters facing fierce competition from other low-cost competing nations such as Bangladesh and China. Many of these companies have downsized export operations and laid off hundreds of thousands of employees.
Chemical
The chemical industry includes the following sectors: Basic inorganic and organic, drugs and pharmaceuticals, pesticides and agrichemicals, petrochemicals, dyes and pigments, fine and speciality chemicals and fertilizers. New sunrise sectors include nutraceuticals and biotechnology.
Fertilizer
- Nitrogenous (N) and Phosphatic (P205) Fertilizer production (2006-07): 16.1 million tonnes
India's Rs 330 billion fertilizer industry has a capacity to manufacture 17.4 million tonnes of N and P ranking India as the third largest N and P producer. Potassic fertilizers form the bulk of the two million tons of fertilizers India imported during 2003-04.
Pharmaceuticals
India's approx. Rs 400 billion pharmaceuticals industry (fourth largest in the world in terms of volume) has recently drawn more attention due to its generic drug products penetration in many foreign markets (22 per cent world market share in 2001). Registered Indian pharma companies number over 10 000 both in the SME and large enterprise sectors. Bulk drugs are produced in large volumes and India is as an example the largest ibuprofen manufacturer. Annual exports amount to some USD 3.5 billion, the US being the largest market. India now recognizes all patents obtained after 1995. This could have an adverse effect on the operations of some generic drug manufacturers whose business has solely rested on reverse engineering drugs.
Autos
India's automotive sector has grown into a trillion Rupee industry having produced 7.3 million units during 2003-04. Read more on the auto industry at knowIndia.net's auto page >>
Gems And Jewellery
India exported gems and jewellery worth USD 17.1 billion in 2006-07. Cut and polished diamonds took the lion's share of exported gem and gold products. India is by far the largest diamond cutting and polishing center in the world and the largest consumer of gold..
Paper
India's paper industry produced an estimated 4.1 million tons of paper and paper board products in 2006-07.
General
- Selected Selected List of Indian companies having websites (both public & private sector)
Other Related Links:
- Ministry of Commerce and Industry - Department of Commerce
- Special Economic Zones (SEZ) in India
- Indian Council for Research on International Economic Relations
- National Council of Applied Economic Research
- Trade Portal of India
- FICCI - Federation of Indian Chambers of Commerce and Commerce
- CII - Confederation of Indian Industry
- Planning Commission
- Income Tax Department
- Union Budget & Economic Survey
- Ministry of Statistics and Programme Implementation
- Directorate General of Foreign Trade (DGFT)
- South Asian Association for Regional Cooperation (SAARC)
Books on Indian Economic Issues:
I have collected a small selection of books dealing with Indian economic issues. You may order the following books via Amazon.co.uk by clicking on the book images below.
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Facets of the Indian Economy by Rakesh Mohan
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The Indian Economy: Problems and Prospects by Bimal Jalan
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India 2020: A Vision for the New Millennium by Dr. A.P.J Abdul Kalam (President of India)
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- Click here for a paperback version: India 2020: A Vision of the New...