Main Industry Sectors
Foreign Direct Investment
FDI Government Measures
Country Strong Points
Country Weak Points
Foreign Trade Overview
India is the world's fourth agricultural power in the world.
Agriculture contributes to about 20% of the GNP and employs
close to two- thirds of the active population in India.
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
Chemical industry is the second largest industrial sector (12%
of the GNP) in terms of size.
Services sector is the most dynamic part of the Indian
economy and contributes to more than half of its GDP, and
employ but a third of its active population.
The software sector, which grows rapidly, is boosting the
export of services and modernizing the Indian economy
India is amongst the world's 10 largest economies.
The average GNP growth rate was 9.4% in average over the period
This growth rate dropped during the global recession, the crisis affected
India by the increase of risk aversion, a withdrawal of foreign capital and
the drop of global demand.
India was a country that quickly got out of the crisis, its growth was
stimulated by private consumption and by the state's expenditures.
From 5.7% in 2009, the growth has jumped up and it is expected to reach
9.7% in 2010 according to the estimations.
The government has established as top priorities to modernize the
economic structure and to fight against poverty.
key Programs has been initialized for jobs, health, education,
infrastructures and rural communities.
The pursuit of a re-balance in public finance is also projected, the
objective is to bring the deficit to 5.5% of the GDP.
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.
Thanks to its many assets, especially a high specialization in
services, with skilled, English-speaking and inexpensive labor force, and a
potential market of one billion inhabitants, India is a country that welcomes
more and more foreign investment.
The inflow of FDI in India registered a record of USD 40 billion in
2008, and the FDI has remained, since then, very stable.
In the global economy crisis, the foreign investors tried to limit their
exposition in the surging markets. However, there was not a decline of FDI
According to the UNCTAD report, India is placed in third position
in terms of FDI inflows in 2009.
The government has set up tax and non-tax incentives to establish
new industrial such as energy, ports, highways, electronics and
The government has also created special areas dedicated to
export, called export-processing zones (EPZs) or special economic
zones (SEZs), to encourage foreign investment.
The central government development banks and state industrial
development banks offer medium to long-term loans and sometimes
invest their own capital in new projects.
The government has set sector-specific ceilings on foreign assets in
certain industries, such as basic and cellular telecommunications
services, banking, retail and civil aviation.
A three-tiered democratic system with a stable political
A well developed administration and an independent judicial
A vast geography making India a repository of resources;
An unparallel resource of an educated, hard-working and skilled
work force, which includes engineers, management personnel,
accountants and lawyers;
A ever growing consumer base making it one of the world's largest
markets for manufactured goods and services;
A dynamic and robust financial system consisting of a
comprehensive banking network, a number of financial institutions
both at the national and State levels as well as a vibrant financial
An economy that will continue to grow despite the international
The corruption (particularly at the federal level)
Restricted FDI in certain sectors;
The weakness of infrastructures;
Inadequate security & safety in certain areas.
India was a protectionist state for a long time, but recently the
country has become progressively more open to international trade.
India has 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 recorded a high commercial deficit due to the price rise of
raw materials which increased the import invoices.
India have recorded a lower progression during the last recent
years due to the rise of the rupee in relation to the dollar (most of the
exports are drawn up in dollars) and the decline of the global demand.
During the economic crisis, exports dropped at a slower rhythm
than imports, creating a reduction of the commercial deficit.
The main trade partners of India are the European Union, the
United Arab Emirates, China and the United States.
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