About Us Overview of Indian Economy


With a population of more than 1.3 billion, India is the world’s largest democracy and the world’s third-largest economy in purchasing power parity terms. Over the past decade with the country’s integration into the global economy, accompanied by steady economic growth, India has now emerged as one of the important global player. India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

The Union Budget of 2022-23, which was presented on February 1, 2022, by the Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman has four priorities: PM GatiShakti, Inclusive Development, Productivity Enhancement and Investment and Financing of Investments. In the Union Budget 2022-23, effective capital expenditure is expected to increase by 27% at Rs. 10.68 lakh crore (US$ 142.93 billion) to boost the economy. This will be 4.1% of the total Gross Domestic Production (GDP).

Under PM GatiShakti Master Plan the National Highway Network will develop 25,000 km of new highways network which will be worth Rs. 20,000 crore (US$ 2.67 billion). In 2022-23. Increased government expenditure is expected to attract private investments, with a production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded, and measured policy support is anticipated to boost the Indian economy.

Ms. Nirmala Sitharaman announced in the Union Budget of 2022-23 that Reserve Bank of India (RBI) will issue Digital Rupee using blockchain and other technologies.

India’s real GDP at current prices stood at USD 3.12 trillion in financial year 2021-22. India is the fourth-largest unicorn base in the world with over 21 unicorns collectively valued at USD 73.2 billion, as per the Hurun Global Unicorn List. By 2025, India is expected to have ~100 unicorns  and will create ~          1.1 million direct jobs according to the Nasscom-Zinnov report ‘Indian Tech Start-up’. India needs to increase its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030's, for productivity and economic growth according to McKinsey Global Institute. Net employment rate needs to grow by 1.5% per year from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030. India's foreign exchange reserves stood at USD 582.04 billion, as of March 12, 2021, according to data from Reserve Bank of India.1

In 2014, the Government of India launched an ambitious program of regulatory reforms aimed at making it easier to do business in India. India has emerged as one of the most attractive destinations not only for investments but also for doing business.

In November 2020, the Government of India announced USD 36 billion stimulus package to generate job opportunities and provide liquidity support to various sectors such as tourism, aviation, construction and housing. Also, India's cabinet approved the production-linked incentives (PLI) scheme to provide ~USD 27 billion over five years to create jobs and boost production in the country. Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. Mr. Narendra Modi, Prime Minister of India, launched Make in India initiative with an aim to boost country’s manufacturing sector and increase purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. The Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aim to take it to 25% of the GDP from the current 17%. Besides, the Government has also come up with Digital India initiative, which focuses on three core components: creation of digital infrastructure, delivering services digitally and to increase the digital literacy.1

Further information on Indian economy can be found at:


1 IBEF, https://www.ibef.org/economy/indian-economy-overview


 India implemented a strict lockdown approach in 2020 to curtail spreading of the coronavirus outbreak and concentrate on expanding the country’s infrastructure & health facilities. According to the Economic Survey 2020-21, the lockdown was a critical element in ‘flattening the curve’ and saving people's lives. The second phase of the COVID-19 vaccine drive started on March 1, 2021 for all people over the age of 60, as well as those aged 45 and above who have co-morbid conditions.

As of 31 December 2021, the country administered 1.4 billion vaccination doses of coronavirus (Covid-19). The vaccination coverage stood at 64.2% adult fully vaccinated and 89.4% of adult population had received their first dose.

India provided 6.4 crore vaccine doses to 84 countries through various modalities including grants in aid, gifts, commercially and through the WHO-GAVI COVAX collaboration, as of April 2, 2021. India's vaccine strategy comes at a time when the global community is alarmed about ‘vaccine nationalism’ and the supply is inadequate.

The Indian economy registered a V-shaped recovery as indicated by the provisional gross domestic product (GDP) estimates. As per the estimates, in the first quarter of FY22, India’s output registered a 20.1% YoY growth, recovering >90% of the pre-pandemic output in the first quarter of FY20. India’s real GVA also registered an 18.8% YoY growth in the first quarter of FY22, posting a recovery of >92% of its corresponding pre-pandemic level (in the first quarter of FY20). Also, in FY21, India registered a current account surplus at 0.9% of the GDP. The economic recovery is driven by the government’s sustained efforts to accelerate vaccination coverage among citizens. This also provided a positive outlook to further revive industrial activities. As of September 8, 2021, vaccination coverage stood at >60% of the adult population.

The Indian government’s policy push to accelerate growth via infrastructure spending and capex has improved capital formation in the economy and therefore, boosted the investment to GDP ratio to ~32% in the fourth quarter of FY21.2


2 IBEF, https://www.ibef.org/economy/monthly-economic-report


India recorded the real GDP (gross domestic product) growth of 0.4% in the third quarter of FY21, as per the NSO's (National Statistical Office) second advance estimates. This rise indicates V-shaped recovery progression that started in the second quarter of FY21.

India is focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30% and have plans to increase its renewable energy capacity to 175 gigawatt (GW) by 2022.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behavior and expenditure pattern, according to a Boston Consulting Group (BCG) report. It is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by 2040 as per a report by PricewaterhouseCoopers.3

About one million people joining India’s workforce every month and with one of the highest number of scientists and engineers, India is a key political, social and economic player.

Key Economic Indicators for India





GDP, current prices, 2022

(Billions of US$)4

3.25 thousand


GDP per capita, current prices, 2022

(US& dollars per capita)4

2.31 thousand


Real GDP growth, 20224

8.5 %


Debt (% of GDP), 20224



FDI Equity Inflows (April-December, 2021)5

US$ 43,175 mn


Sectors attracting highest FDI Equity Inflows (April-December, 2021)5

       i.        Services sector (Financial, R&D, Outsourcing, Banking, etc.)

      ii.        Computer Software & Hardware

     iii.        Automobile Industry

    iv.        Infrastructure Activities

      v.        Chemicals (other than


    vi.        Drugs & Pharmaceuticals

   vii.        Metallurgical Industries




US$ 5,349 mn


US$ 10,252 mn

US$  5,962 mn

US$ 1,588 mn

US$  605.14 mn


US$  1206.29 mn

US$ 1,301 mn


Inflation rate, 2022

(annual percent change, average consumer prices)4



India’s overall exports (Merchandise and Services combined) in April-December 20216

US$ 479.07 Billion


India's overal imports (Merchandise and Services combined) in April-December 2021 6

US$ 547.12 Billion


Manufacturing Purchasing Managers' Index (PMI), January 20227





3 IBEF, India Brand Equity Foundation, www.ibef.org

4 IMF, https://www.imf.org/external/datamapper/profile/IND

5 Department for Promotion of Industry and Internal Trade https://dpiit.gov.in/sites/default/files/FDI%20Factsheet%20December%2C%202021.pdf

6 Press Information Bureau, https://pib.gov.in/PressReleasePage.aspx?PRID=1789882#:~:text=Overall%20exports%20during%20April%2DDecember,Billion%20during%20the%20same%20period

7 IBEF, India Brand Equity Foundation, https://www.ibef.org/economy/monthly-economic-report


Foreign Direct Investments (FDI)

Foreign companies invest in India to take advantage of relatively lower wages, special investment privileges like tax exemptions, etc. For a country where foreign investment is being made, it also means achieving technical know-how and generating employment. The Indian Government’s favourable policy regime and robust business environment has ensured that foreign capital keeps flowing into the country. The Government has taken many initiatives in recent years such as relaxing FDI norms across sectors such as defence, PSU oil refineries, telecom, power exchanges, and stock exchanges, among others.8

Foreign Direct Investment (FDI) in India9

  1. India registered the highest ever annual FDI Inflow of US$ 81.97 billion (provisional figure) in the financial year 2020-21
  2. Top five countries from where FDI Equity Inflows were received during April, 2014 and August, 2021 are Singapore (28%), Mauritius (22%), USA (10%), Netherlands (8%) and Japan (6%). Computer Software & Hardware sector attracted the largest share of FDI inflows at 19%, followed by Service (15%), Trading (8%) and Telecommunications & Construction (Infrastructure) (7% each) during the same period in the last more than seven years.
  3. With a view to support, facilitate and provide investor friendly ecosystem to investors, the Union Cabinet approved constitution of an Empowered Group of Secretaries (EGoS), and also Project Development Cells (PDCs) in Ministries to fast-track investments in coordination between the Central Government and State Governments and thereby grow the pipeline of investible projects in India to increase domestic investments and FDI inflow.
  4. Keeping in view India’s vision of becoming ‘Atmanirbhar’ and to enhance India’s Manufacturing capabilities and Exports, an outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced in Union Budget 2021-22 for PLI schemes for 13 key sectors of manufacturing starting from fiscal year (FY) 2021-22.
  5. The 13 key sectors include already existing 3 sectors namely (i) Mobile Manufacturing and Specified Electronic Components, (ii) Critical Key Starting materials/Drug Intermediaries & Active Pharmaceutical Ingredients, (iii) Manufacturing of Medical Devices and 10 new key sectors which have been approved by the Union Cabinet in November 2020. These 10 key sectors are:

(i) Automobiles and Auto Components, (ii) Pharmaceuticals Drugs, (iii) Specialty Steel, (iv) Telecom & Networking Products, (v) Electronic/Technology Products, (vi) White Goods (ACs and LEDs), (vii) Food Products, (viii) Textile Products: MMF segment and technical textiles, (ix) High efficiency solar PV modules, and (x) Advanced Chemistry Cell (ACC) Battery.

India is expected to attract foreign direct investments (FDI) of US$ 120-160 billion per year by 2025, according to CII and EY report. Over the past 10 years, the country witnessed a 6.8% rise in GDP with FDI increasing to GDP at 1.8%.

In terms of attractiveness, investors ranked India #3; ~80% investors have plans to invest in India in the next 2-3 years, while ~25% reported investments worth >US$ 500 million, the Economic Times reported.

Further, as per a Deloitte report published in September 2021, India remains an attractive market for international investors both in terms of short-term and long-term prospects.

India ranked 43rd on the Institute for Management Development (IMD)’s annual World Competitiveness Index 2021. According to the IMD, India's developments in government efficiency are primarily due to relatively stable public finances (despite COVID-19-induced challenges) and optimistic sentiments among Indian business stakeholders with respect to the funding and subsidies offered by the government to private firms.8

The World Bank Doing Business 202010 listed the main key points about India:

  1. India has made a substantial leap upward, raising its ease of doing business, currently holding 63 rank.
  2. Remarkable reform efforts and joins the list of 10 economies that improved the most, for the third year in a row.
  • Focus on attracting foreign investment, boosting the private sector and enhancing the country’s overall competitiveness.
  1. The administration’s reform efforts targeted all of the areas, with a focus on paying taxes, trading across borders, and resolving insolvency.


8 IBEF, https://www.ibef.org/economy/foreign-direct-investment.aspx

9 Ministry of Commerce & Industry, Government of India, https://pib.gov.in/PressReleasePage.aspx?PRID=1782353  

10 The World Bank, https://www.doingbusiness.org/en/data/exploreeconomies/india


India is one of the world's fastest-growing economies, with largest youth population in the world, and world-class infrastructure across the country. The country became the world's fifth largest economy in 2019, ranked by nominal GDP, according to the IMF's October World Economic Outlook 2020. India, in this ranking, has leapfrogged France and the UK.11

India, one of the fastest growing economies, offers a numerious investment opportunities accross various sectors:  

  1. Agriculture & Forestry: India is the largest producer of spices, pulses, milk, tea, cashew and jute; the second-largest producers of fruits and vegetables, and the 2nd largest producer of Bamboo in the World.12
  2. Healthcare industry in India comprises of hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. Healthcare industry in India is projected to reach USD 372 bn by 2022.13
  • Pharmaceuticals: India is the largest provider of generic medicines globally, occupying a 20% share in global supply by volume, and also supplies 62% of global demand for vaccines.14
  1. IT&BPM: India is the second largest tech startup hub of the world. The industry is the largest employer within the private sector, employing 3.9 million people.15
  2. Food Processing: India is the world's largest procuder, consumer and exporter of spices, world's largest procuser of food grains, fruits, and vegetables.16
  3. Biotechnology: India is the world's largest producer of recombinant Hepatitis B vaccine. The biotech industry in India comprises over 5,000 companies (760 core companies and 4,240 start-ups) and biotech in India is aligned around five major segments: BioPharma, BioAgriculture, BioIndustrial, and combined segment of BioServices comprising of BioIT, CROs, and Research Services.17
  • Chemicals: Chemicals industry in India is highly diversified, covering more than 80,000 commercial products. It is broadly classified into Bulk chemicals, Specialty chemicals, Agrochemicals, Petrochemicals, Polymers and Fertilizers. India’s proximity to the Middle East, the world’s source of petrochemicals feedstock, makes for economies of scale.18

All Sectors are presented on the Invest India, https://www.investindia.gov.in/sectors.

The limit on foreign investments in Indian insurance companies has been increased from 49% to 74%, as stated in the Union Budget. The act would enable foreign insurance firms to take a more strategic and long-term approach to India's insurance market, bringing in more long-term resources, global technology, processes and international best practises.

In December 2020, changes in the guidelines for the provision of Direct-to-Home (DTH) services have been approved by the Union Cabinet, enabling 100% FDI in the DTH broadcasting services market.19

Make in India

Make in India is an initiative which was launched on September 25, 2014, to facilitate investment, foster innovation, building best in class infrastructure, and making India a hub for manufacturing, design, and innovation. The development of a robust manufacturing sector continues to be a key priority of the Indian Government. It was one of the first 'Vocal for Local' initiatives that exposed India's manufacturing domain to the world. The sector has the potential to not only take economic growth to a higher trajectory but also to provide employment to a large pool of our young labour force.20

The focus of Make in India programme is on 25 sectors. These include: automobiles, automobile components, aviation, biotechnology, chemicals, construction, defence manufacturing electrical machinery, electronic systems, food processing, IT & BPM, leather, media and entertainment, mining, oil and gas, pharmaceuticals, ports and shipping, railways, renewable energy, roads and highways, space, textile and garments, thermal power, tourism and hospitality and wellness.21

Recently, Government has taken various steps in addition to ongoing schemes to boost domestic and foreign investments in India. These include the National Infrastructure Pipeline, Reduction in Corporate Tax, easing liquidity problems of NBFCs and Banks, policy measures to boost domestic manufacturing.20

More information at https://www.makeinindia.com


11 World Economic Forum, https://www.weforum.org/agenda/2020/02/india-gdp-economy-growth-uk-france/

12 Invest India, https://www.investindia.gov.in/sector/agriculture-forestry  

13 Invest India, https://www.investindia.gov.in/sector/healthcare

14 Invest India, https://www.investindia.gov.in/sector/pharmaceuticals

15 Invest India, https://www.investindia.gov.in/sector/it-bpm

16 Invest India, https://www.investindia.gov.in/sector/food-processing

17 Invest India, https://www.investindia.gov.in/sector/biotechnology

18 Invest India, https://www.investindia.gov.in/sector/chemicals

19 IBEF, https://www.ibef.org/economy/monthly-economic-report

20 Press Information Bureau, Government of India,  https://pib.gov.in/Pressreleaseshare.aspx?PRID=1703787

21 IBEF, https://www.ibef.org/economy/make-in-india