From a primarily an agrarian economy, India has transformed into one of the world’s largest and fastest-growing economies. The IT and service sectors, in particular, have positioned India as a global leader in technology and innovation. Significant improvements in education have led to a dramatic rise in literacy rates. Initiatives like the Right to Education Act have made education accessible to millions of children across the country. India has made considerable progress in healthcare, with improvements in life expectancy and reductions in infant mortality rates. The country’s pharmaceutical industry is now a major player on the global stage. The Indian Space Research Organization (ISRO) has achieved notable successes, including the Chandrayaan and Mangalyaan missions, showcasing India’s capabilities in space exploration. Modern infrastructure projects, such as the construction of highways, airports, and metro systems, have bolstered connectivity and economic growth.
Economy
The economy of India is a developing mixed economy with a notable public sector in strategic sectors. It is the world’s fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP); on a per capita income basis, India ranked 136th by GDP (nominal) and 125th by GDP (PPP).
From independence in 1947 until 1991, successive governments followed the Soviet model and promoted protectionist economic policies, with extensive Sovietization, state intervention, demand-side economics, natural resources, bureaucrat driven enterprises and economic regulation. This is characterized as dirigism, in the form of the License Raj. The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning. Since the start of the 21st century, annual average GDP growth has been 6% to 7%., India has about 1,900 public sector company, Indian state has complete control and ownership of railways, highways; majority control and stake in banking, insurance, farming, dairy, fertilizers & chemicals, airports, nuclear, mining, digitization, defense, steel, rare earths, water, electricity, oil and gas industries and power plants, and has substantial control over digitalization, Broadband as national infrastructure, telecommunication, supercomputing, space, port and shipping industries, among other industries, were effectively nationalized in the mid-1950s.
Nearly 70% of India’s GDP is driven by domestic consumption; country remains the world’s fourth-largest consumer market. Apart from private consumption, India’s GDP is also fueled by government spending, investments, and exports. In 2022, India was the world’s 10th-largest importer and the 8th-largest exporter. India has been a member of the World Trade Organization since 1 January 1995. It ranks 63rd on the Ease of doing business index and 40th on the Global Competitiveness Index. India has one of the world’s highest number of billionaires and extreme income inequality. Economists and social scientists often consider India a welfare state. India is officially declared a socialist state as per the constitution. With 586 million workers, the Indian labor force is the world’s second-largest.
According to HSBC Flash India PMI report, business activity surged in April to its highest level in about 14 years as well as sustained robust demand. The composite index reached 62.2, indicating continuous expansion since August 2021, alongside positive job growth and decreased input inflation, affirming India’s status as the fastest-growing major economy.
As of July 5, 2024, India’s foreign exchange reserves stood at US$ 657.15 billion.
In May 2024, India saw a total of US$ 6.9 billion in PE-VC investments.
Merchandise exports in June 2024 stood at US$ 35.20 billion, with total merchandise exports of US$ 109.96 billion during the period of April 2024 to June 2024.
India was also named as the 48th most innovative country among the top 50 countries, securing 40th position out of 132 economies in the Global Innovation Index 2023. India rose from 81st position in 2015 to 40th position in 2023. India ranks 3rd position in the global number of scientific publications.
In June 2024, the gross Goods and Services Tax (GST) stood at highest monthly revenue collection at Rs. 1.74 lakh crore (US$ 20.83 billion) vs Rs. 1.73 lakh crore (US$ 20.71 billion)
Between April 2000–March 2024, cumulative FDI equity inflows to India stood at US$ 97 billion.
In May 2024, the overall IIP (Index of Industrial Production) stood at 154.2. The Indices of Industrial Production for the mining, manufacturing and electricity sectors stood at 136.5, 149.7 and 229.3, respectively, in May 2024.
According to data released by the Ministry of Statistics & Programme Implementation (MoSPI), India’s Consumer Price Index (CPI) based retail inflation reached 5.08% (Provisional) for June 2024.
Foreign Institutional Investors (FII) inflows between April-July (2023-24) were close to Rs. 80,500 crore (US$ 9.67 billion), while Domestic Institutional Investors (DII) sold Rs. 4,500 crore (US$ 540.56 million) in the same period. As per depository data, Foreign Portfolio Investors (FPIs) invested (US$ 13.89 billion) in India during January- (up to 15th July) 2024.
The wheat procurement during Rabi Marketing Season (RMS) 2024-25 (till May) was estimated to be 266 lakh metric tonnes (LMT) and the rice procured in Kharif Marketing Season (KMS) 2024-25 was 400 LMT.

India remains world’s fastest growing major economy globally: World Bank
The World Bank on June 11, 2024, predicted that India is set to remain the fastest-growing major economy globally, though its growth rate is expected to slow. The June ‘Global Economic Prospects’ report maintained the GDP growth forecast for India at 6.6 per cent for FY25.
“This moderation is mainly due to a slowdown in investment from a high base. However, investment growth is still expected to be stronger than previously envisaged and remain robust over the forecast period, with strong public investment accompanied by private investment,” the report said.
In April, the global agency increased its projection for India’s GDP growth by 20 basis points to 6.6 per cent for the current financial year.
After a robust performance in FY24, the World Bank projected an average growth rate of 6.7 per cent (6.7 per cent in FY26 and 6.8 per cent in FY27) annually over the three fiscal years starting from FY25, as outlined in its Global Economic Prospects for June 2024.
In the January-March quarter, India’s GDP growth surpassed expectations, reaching 7.8 per cent, although this was a decline from 8.4 per cent in the third quarter. For the entire fiscal year 2023-24, GDP growth has been revised upwards to 8.2 per cent from the second advance estimate of 7.6 per cent, according to the Ministry of Statistics and Programme Implementation data released on May 31.
India, the largest economy in South Asia, has significantly contributed to regional growth, particularly through its manufacturing and services sectors, the World Bank report noted. The country’s growth rate for FY24 is estimated at 8.2 per cent, a notable increase of 1.9 percentage points from earlier projections, the report said.
India’s economic growth has been driven by its industrial and services sectors, which have offset a slowdown in agricultural production caused by monsoon disruptions. Domestic demand remains strong, buoyed by infrastructure investments, even as post-pandemic pent-up consumption demand eases, the World Bank report noted. Inflation in India has remained within the Reserve Bank’s target range of 2-6 per cent since September 2023, contributing to a stable economic environment, the report added.