Economy of India

Economy of India

The economy of India is the sixth-largest economy in the world measured by nominal GDP and the third-largest by purchasing power parity (PPP).^[34] The country is classified as a newly industrialised country, one of the G-20 major economies, a member of BRICS and a developing economy with an average growth rate of approximately 7% over the last two decades. Maharashtra is the wealthiest Indian state and has an annual nominal GDP of US$330 billion,^[35] nearly equal to that of Portugal and Pakistan and accounts for 12% of the Indian GDP followed by the states of Tamil Nadu (US$150 billion)^[36] and Uttar Pradesh (US$130 billion). India's economy became the world's fastest growing major economy in the last quarter of 2014, surpassing the People's Republic of China.^[37]

The long-term growth prospective of the Indian economy is positive due to its young population, corresponding low dependency ratio, healthy savings ^[38] and investment rates, and increasing integration into the global economy.^[39] The Indian economy has the potential to become the world's 3rd-largest economy by the next decade, and one of the two largest economies by mid-century.^[40][41][42] And the outlook for short-term growth is also good as according to the IMF, the Indian economy is the "bright spot" in the global landscape.^[43] India also topped the World Bank's growth outlook for 2015-16 for the first time with the economy having grown 7.6% in 2015-16.^[44] Growth is expected to decline slightly to 7.1% in the 2016-17 fiscal year.^[45]

India has one of the fastest growing service sectors in the world with annual growth rate of above 9% since 2001, which contributed to 57% of GDP in 2012-13.^[46] India has become a major exporter of IT services, BPO services, and software services with $167.0 billion worth of service exports in 2013-14. It is also the fastest-growing part of the economy.^[47] The IT industry continues to be the largest private sector employer in India.^[48][49] India is also the third largest start-up hub in the world with over 3,100 technology start-ups in 2014-15^[50] The agricultural sector is the largest employer in India's economy but contributes to a declining share of its GDP (17% in 2013-14). India ranks second worldwide in farm output.^[51] The Industry sector has held a constant share of its economic contribution (26% of GDP in 2013-14).^[52] The Indian auto mobile industry is one of the largest in the world with an annual production of 21.48 million vehicles (mostly two and three wheelers) in FY 2013-14.^[53] India has $600 billion worth of retail market in 2015 and one of world's fastest growing E-Commerce markets.^[54][55]

India's two major stock exchanges, Bombay Stock Exchange and National Stock Exchange of India, had a market capitalisation of US$1.71 trillion and US$1.68 trillion respectively as of Feb 2015, which ranks 11th & 12 largest in the world respectively according to the World Federation of Exchanges.^[56] India is also home to world's third largest billionaires pool with 111 billionaires in 2016 and the fourth largest number of ultra-high-net-worth households that have more than US$100 million.^[57]

India is a member of the Commonwealth of Nations,^[58] the South Asian Association for Regional Cooperation, the Non Aligned Movement, the G20, the G8+5, the International Monetary Fund, the World Bank, the World Trade Organisation, the United Nations, the Shanghai Cooperation Organisation, the New Development BRICS Bank the Asian Infrastructure Investment Bank and Missile Technology Control Regime.