India: Country fact sheet
- Content Type
- Country Data and Maps
- Economist Intelligence Unit
- No abstract is available.
- Summary, Economy, Background, Fact sheet
- Political Geography
Annual data 2020 a Historical averages (%) 2016-20 Population (m) 1,380 b Population growth 0.8 GDP (US$ bn; market exchange rate) 2,687 Real GDP growth 1.9 GDP (US$ bn; purchasing power parity) 9,059 Real domestic demand growth 1.9 GDP per head (US$; market exchange rate) 1,947 Inflation 3.5 GDP per head (US$; purchasing power parity) 6,564 Current-account balance (% of GDP) -0.8 Exchange rate (av) Rs:US$ 74.1 b FDI inflows (% of GDP) 1.8 aEconomist Intelligence Unit estimates. bActual.
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Background: India gained independence in 1947 after two centuries of British colonial rule. Partition at the same time created the state of Pakistan, with which India has fought three wars (two of them over the disputed territory of Kashmir). India is the second most populous country in the world, with an estimated 1.8bn people in 2020, according to the UN. Its economy was the third largest in the world in 2019, measured in nominal US dollars at purchasing power parity (PPP) exchange rates by the World Bank.
Political structure: India has been a democracy since independence. At federal level, the Bharatiya Janata Party (BJP) holds a majority in the Lok Sabha (the lower house of parliament), although it governs in a broader coalition, the National Democratic Alliance (NDA). India follows the UK model of parliamentary government, with a prime minister as head of government. It has a president as the head of state. The country has a quasi-federal structure, with state governments having their own legislatures and enjoying a fair degree of freedom.
Policy issues: The ruling BJP is expected to undertake policy reforms once the coronavirus (Covid-19) pandemic passes. The government has already announced measures to privatise or merge public-sector units in many industries to promote competition. The government will also make modest progress on the liberalisation of regulatory requirements and foreign investment. However, the primary focus of the government will be on structural reform, particularly the contentious labour and land laws. We expect only incremental progress on these issues. The current administration has made headway in speeding up infrastructure projects, and this will also remain a priority in the next five years.
Taxation: The government will maintain efforts to broaden the tax base in 2021-25, including by further digitising tax departments. This, coupled with a pick-up in economic growth from 2022/23 onwards, will support tax collection. Despite some reforms, including a nationwide goods and services tax in 2017, India's tax system will remain complex.
Foreign trade: India's merchandise trade deficit narrowed to US$157.7bn in 2019, from US$186.7bn in 2018, while the surplus on the country's services account rose from US$80.8bn to US$84.2bn.
Major exports 2019 % of total Major imports 2019 % of total Petroleum products 13.7 Mineral fuels 32.0 Gems & jewellery 11.4 Precious metals & stones 12.5 Machinery 6.6 Electronics 10.5 Organic chemicals 5.7 Machinery 9.2 Leading markets 2019 % of total Leading suppliers 2019 % of total US 16.4 China 13.6 UAE 9.1 US 6.9 China 5.2 UAE 6.0 Hong Kong 3.6 Saudi Arabia 5.4
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