INDIA AS AN EMERGING ECONOMIC POWER
The Republic of India is considered one of the emerging superpowers of the world. This potential is attributed to several indicators, the primary ones being its demographic trends and a rapidly expanding economy.
India has the world’s second-largest population. The PGR for the country is 1.1. A very large number of India’s population, about 50%, is below the age group of 24. This provides the nation with a large workforce for many decades, helping in its growth.
More than 35 million Indians live across the globe. Under fair opportunities, they have become socio-economically successful – especially in the US and the UK where they are the highest earning ethnic demographic.
Foreign language skills
India has the world’s largest English-speaking/understanding population. It claims one of the largest workforces of engineers, doctors, and other key professionals, all comfortable with English.
It has the 2nd largest population of “fluent English” speakers, second only to the United States, with estimates ranging from 150 to 250 million speakers, and is expected to have the largest in coming decades.
Indians are also learning Dutch, Italian, French, Japanese, Korean, Mandarin Chinese, Russian, German, and Spanish.
India is the world’s largest democratic republic, more than three times bigger than the next largest (the United States). It has so far been successful politically, especially considering its functionality despite its difficult ethnic composition.
The fact that India is a democracy has improved its relations with other democratic nations and significantly improved its ties with the majority of the nations in the developed world.
COMPOSITION OF INDIA’S FOREIGN TRADE
India has developed relationships with the world powers like the European Union, Japan, Russia, and the United States. It also developed relationships with the African Union (particularly South Africa), the Arab World, Southeast Asia, Israel, and South American nations (particularly Brazil).
In order to make the environment favorable for economic growth, India is investing in its relations with China. It has significantly boosted its image among Western nations and signed a civilian nuclear deal with the United States in March 2006. It is also working for better relationships with Pakistan.
Economy and finance
The economy of India is characterized as a developing market economy. It is the world’s fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). According to the IMF, on a per capita income basis, India ranked 142nd by GDP (nominal) and 119th by GDP (PPP) per capita in 2018.
From independence in 1947 until 1991, successive governments promoted protectionist economic policies with extensive state intervention and regulation; the end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad program of economic liberalization.
Since the start of the 21st century, annual average GDP growth has been 6% to 7%, and from 2014 to 2018, India was the world’s fastest-growing major economy, surpassing China. Historically India was one of the largest economies in the world for most of the two millennia from 1st until the 19th century.
The long-term growth prospective of the Indian economy remains positive due to its young population and corresponding low dependency ratio, healthy savings, and investment rates, and its increasing integration into the global economy.
The economy slowed in 2017, due to shocks of “demonetization” in 2016 and the introduction of Goods and Services Tax in 2017. Nearly 60% of India’s GDP is driven by domestic private consumption and continues to remain the world’s sixth-largest consumer market.
Apart from private consumption, India’s GDP is also fueled by government spending, investment, and exports. In 2018, India was the world’s tenth-largest importer and the nineteenth-largest exporter. • India has been a member of the World Trade Organization since 1 January 1995.
See also Largest Economies in the World 2022.
It ranks 63rd on the Ease of doing business index and 68th on the Global Competitiveness Report. With 510 million workers, the Indian labor force is the world’s second-largest as of 2018.
During the 2008 global financial crisis the economy faced a mild slowdown, India undertook stimulus measures to boost growth and generate demand; in subsequent years economic growth revived. According to World Bank, to achieve sustainable economic development India must focus on public sector reform, infrastructure, agricultural and rural development, removal of land and labor regulations, financial inclusion, spur private investment and exports, education, and public health.
India’s largest trading partners are China, the USA, UAE, Saudi Arabia, Switzerland, Germany, Hong Kong, Indonesia, South Korea, and Malaysia. In 2018-19, the foreign direct investment (FDI) in India was $64.4 billion with the service sector, computer, and telecom industry remaining leading sectors for FDI inflows.
India has free trade agreements with several nations, including ASEAN, SAFTA, South Korea, Japan, and a few others which are in effect or in negotiating stage. The service sector makes up 55.6% of GDP and remains the fastest growing sector, while the industrial sector and the agricultural sector employ the majority of the labor force.
The Bombay Stock Exchange and National Stock Exchange are one of the world’s largest stock exchanges by market capitalization. India is the world’s sixth-largest manufacturer, representing 3% of global manufacturing output, and employs over 57 million people. Nearly 70% of India’s population is rural whose primary source of livelihood is agriculture and contributes about 50% of India’s GDP.
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India faces high unemployment and rising income inequality. It has the world’s seventh-largest foreign-exchange reserves worth $440 billion. India has a high national debt of 70% of GDP, while its fiscal deficit remained at 3.4% of GDP. India ranks second globally in food and agricultural production, while agricultural exports were $38.5 billion.
The construction and real estate sector is the second largest employer after agriculture, and a vital sector to gauge economic activity. The Indian textiles industry is estimated at $150 billion and contributes 7% of industrial output and 2% of India’s GDP while employing over 45 million people directly.
The Indian IT industry is a major exporter of IT services with $180 billion in revenue and employs over four million people. India’s telecommunication industry is the world’s second-largest number of mobile phone, smartphone, and internet users.
It is the world’s tenth-largest oil producer and the third-largest oil consumer. The Indian automobile industry is the world’s fourth largest by production. It has $672 billion worth of retail market which contributes over 10% of India’s GDP and has one of the world’s fastest growing e-commerce markets.
India has the world’s fourth-largest natural resources, with the mining sector contributing 11% of the country’s industrial GDP and 2.5% of total GDP. It is also the world’s second-largest coal producer, the second-largest steel producer, and the third-largest electricity producer.
Apart from these, there are a number of economic obstacles in India, they are Increase in the Poverty rate, Basic infrastructure, increased inflation rate, Unemployment rate, Energy dependencies, Health issues, illiteracy, Climate, and environmental problems, Social issues- communal violence, social divide and so on.
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