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Overview ->Economic Overview
domestic market in india
foreign direct investment policy of indian government

The liberalization process in India started 5 years back, with consistent reforms during this phase, the Indian economy is expected to achieve a growth of about 9 % this financial year.

India is one of the fastest growing economies in the world and by the year 2020 it is expected to be the third largest economy after the United States and China.

The GDP per capita (at purchasing power parity) is also expected to jump during this period from approximately USD 3100 to USD 5000. This along with the fact that a majority of the population would be in the working age group by 2020, would lead to not only a larger but also a richer consumer base, making it one of the most attractive markets in the world.

Year GDP Growth Forex FII Flow FDI Per Capita Inflation
1990 4.9 % USD 1 bn USD 1 million (1993) USD 97 million USD 390 9%
2008 8.7 % USD 309 bn as on Mar 28, 2008 USD 16.1 bn in 2007-08 USD20.10bn in 2007-08 till Feb. USD 740 7 .4 % as on March29, 2008

The industrial growth at current prices in the financial year 2007-08 reached 10.7 %, service industry grew by 8.9% & agriculture at 5.6 %.

distribution channel infrastructure

India's foreign exchange reserves increased by 55 % in 2007-08 to $309.16 billion, which is an increase of nearly $110 billion from $199.18 billion at the end of 2006-07.

Indian exports show a growth of 23.02 % to $155.51 billion in 2007-08 as against $126.41 billion in 2006-07. On the other hand, India's import increased to $235.91 billion in 2007-08 as against $185.73 billion in 2006-07 showing growth rate of 27.01%. The trade deficit is soared to an estimated value of $80.39 billion in 2007-08 against $59.32 billion in 2006-07 which is due to increase in oil imports that went up by 38.25 %.

Foreign Direct Investment

India has emerged as the second hottest FDI destination in the world, next to China, but ahead of Russia and Brazil. World Investment Prospects for 2007-09 has said that India and China are attractive nations due to large size and growth of domestic markets along with cheap labour.

The sector wise GDP growth rates (at constant prices) for the second quarter of 2005-06 are as follows:
Financial Year Total FDI Equity Capital Flow (US $ billion)
1991 (Aug) - 2000 (March) 15.48
2000-01 2.91
2001-02 4.09
2002-03   2.69
2003-04 2.51
2004-05 3.77
2005-06 5.97
2006-07 (P) 16.47
2007-08 (April-Feb)   20.10
(Source - Department of Industrial policy and Promotion, P = Provisional Data)

Challenges in front of Indian economy

  1. Sustaining and achieving GDP of 8-9 % in next 5 years.

  2. Allowing foreign direct investment in more sectors so as to maintain the growth rate.
  3. Giving prime importance to infrastructure development and attract FDI in this sector.
  4. Keeping population under control so that everyone can satisfy their basic needs.
  5. Boosting agricultural growth.
  6. Improving educational & healthcare facilities.
  7. Simplifying procedures and relaxing entry barriers for business coming from outside the nation.

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