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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

According to the IMF, the Indian economy grew by an estimated 6.8% in 2022, mainly driven by the pickup in economic activities in the travel industry, trade, construction, mining, electricity, and manufacturing. One of the fastest-growing economies in the world, India is expected to keep growing in the coming years, with global off-shoring, digitisation, and energy transition setting the scene for unprecedented economic growth in the country. According to the IMF, the economy is expected to register an estimated GDP growth of 6.1% in 2023 and 6.8% in 2024.

Thanks to global trends and key investments made in technology and energy, India is on track to becoming one of the world's top economies. In 2022, the country continued recovering from the impacts of the pandemic, with India’s broad range of fiscal stimuli and health responses proving their effectiveness. By the end of the year, the country’s general government deficit stood at an estimated 8.5%, a rate which should remain relatively stable in 2023 and 2024, at 8.3% and 8.4/%, respectively. According to the IMF, inflation increased to 6.9% in 2022, but it is expected to decrease to 5.1% in 2023 and 4.4% in 2024. The level of public debt remains high - it was estimated at 83.4% in 2022 - and it is expected to remain virtually unchanged in the next two years, at 83.8% in 2023 and 84.1% in 2024. The government is focused on reducing inequality, as it seeks to implement growth oriented reforms to get the economy back on track, such as MSME incentives, infrastructure sector boost, agriculture infrastructure, micro food enterprises, increased public employment outlay, and special liquidity window. According to the government, the MSME sector is crucial for the inclusive growth of the economy and, as such, it's become a major priority, with various programmes for the development and promotion of MSMEs being put in place across the country.

India is expected to overtake China as the world’s most populous country by 2024. It has the world’s largest youth population, nevertheless, according to the OECD, over 30% of India's youth are NEETs (not in employment, education or training). India continues to suffer from a low GDP per capita (USD 2,098), and almost 25% of the population still lives below the poverty line (about one-third of the world’s population living on under USD 1.90/day lives in India) and the country's inequalities are very strong: the richest 1% of the population own 53% of the country’s wealth. Additionally, the informal sector, where the vast majority of India’s labour force is employed, has been particularly affected by the COVID-19 pandemic, increasing their risk of slipping back into poverty. According to the CMIE, India's unemployment rate stood at 8.3% of total labour force in 2022, with rates being higher in urban areas (10%) than in the rural parts of the country (7.4%).

Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 2,671.603,150.313,386.403,736.884,062.15
GDP (Constant Prices, Annual % Change) -
GDP per Capita (USD) 1,9132,2342,3792,6012,803
General Government Balance (in % of GDP) -9.1-8.8-9.6-8.9-8.3
General Government Gross Debt (in % of GDP) 88.584.783.183.283.7
Inflation Rate (%)
Current Account (billions USD) 24.01-38.69-88.43-81.59-89.29
Current Account (in % of GDP) 0.9-1.2-2.6-2.2-2.2

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

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Main Sectors of Industry

India is the world's fourth agricultural power. As a central pillar of the Indian economy, agriculture contributes 16.8% of the GDP and employs 42.6% of the active population. The country's main agricultural products are wheat, millet, rice, corn, sugar cane, tea, potatoes, cotton, bananas, guava, mango, lemon, papaya, and chickpea. India is also the fifth largest producer of cattle and sheep, as well as the second largest in fishing production in the world. The spices sector is also very pronounced, particularly the production of ginger, pepper and chili. In 2022, the sector recorded a sharp increase in investments and exports. Not only that, but agriculture has been a key sector in India’s economic recovery from the COVID-19 crisis as the pandemic led many who lived in India's cities to move back to their ancestral lands, which resulted in a boost of agricultural activity.

The industry sector employs 25.1% of the workforce and accounts for 25.9% of GDP. Coal is the country's main energy source, with India being the world's third largest producer of coal. In the manufacturing industry, textile plays a predominant role, and, in terms of size, the chemical industry is the second largest industrial sector. In 2022, despite supply constraints and raw material shortages, key sectors like construction, mining, electricity, and manufacturing benefited from a pickup in economic activity, with demands from everything from cement to steel significantly increasing.

The services sector is the most dynamic part of the Indian economy. It contributes to almost half of its GDP (47.5%), but it only employs 32.3% of its workforce. The rapidly growing software sector has been boosting the export of services and modernising the Indian economy: the country has capitalised on its large educated English-speaking population to become a major exporter of IT services, business outsourcing services and software workers. In 2022, the sector continued showing a steady recovery, mainly driven by customer-facing services and the growing software sector.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 42.6 25.1 32.3
Value Added (in % of GDP) 16.8 25.9 47.5
Value Added (Annual % Change) 3.0 10.3 8.4

Source: World Bank - Latest available data.

Monetary Indicators 20162017201820192020
Indian Rupee (INR) - Average Annual Exchange Rate For 1 USD 67.2065.1268.3970.9074.67

Source: World Bank - Latest available data.



Foreign Trade

India used to be a protectionist state for a long time, but the country has become progressively more open to international trade. Currently, trade represents 45.3% of the country's GDP. The country mainly exports petroleum oils (13.7%), diamonds (6.3%), medicaments (4.3%), articles of jewellery (2.7%), and rice (2.4%), while it imports petroleum oils (18.7%), gold (9.8%), diamonds (4.6%), coal and similar solid fuels (4.5%), petroleum gas and other gaseous hydrocarbons (4.2%). According to IMF Foreign Trade Forecasts, the volume of exports of goods and services increased by 3.9% in 2022 and is expected to further increase in 2023, reaching at 4.9%, while the volume of imports of goods and services increased by 10.1% in 2022 and is expected to increase by 7.2% in 2023.

India's main partners are the United States, China, the United Arab Emirates, Switzerland, Saudi Arabia, Bangladesh, and Hong Kong. The country has recently signed free trade agreements with South Korea and ASEAN, and has entered into negotiations with several partners (EU, MERCOSUR, Australia, New Zealand and South Africa). In 2021, Brazil and India signaled their interest in expanding the FTA that India has with MERCOSUR, but the expansion is still under negotiation, pending approval from other members of the South American bloc. India is currently the world’s fastest-growing large economy, as well as the world's eighth largest exporter and tenth largest importer of commercial services. However, India’s trade regime and regulatory environment still remains relatively restrictive.

The country's trade balance is structurally negative, given that the country imports nearly 80% of its energy needs. However, as India benefits from the fluctuations in world hydrocarbon prices for its imports, the country's trade deficit has been oscillating for the past few years. In 2021, India exported USD 395 billion worth of goods, while imports accounted for USD 572 billion, resulting in a negative trade balance of USD 176 billion. According to the WTO, in the same year, exports of services amounted to USD 240 billion, whereas the imports of services stood at USD 195 billion, leading to a decrease of the overall trade deficit, which amounted to USD 74 billion.

Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 449,925514,464486,059372,854572,909
Exports of Goods (million USD) 299,241324,778324,340276,302395,425
Imports of Services (million USD) 153,960174,925178,322152,860195,956
Exports of Services (million USD) 184,673204,323214,128202,600240,657

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 40.743.640.037.845.3
Trade Balance (million USD) -148,134-186,692-157,678-95,450-176,721
Trade Balance (Including Service) (million USD) -72,212-105,918-73,452-8,342-74,039
Imports of Goods and Services (Annual % Change) 17.48.8-0.8-13.835.5
Exports of Goods and Services (Annual % Change) 4.611.9-3.4-9.224.3
Imports of Goods and Services (in % of GDP) 22.023.721.319.123.9
Exports of Goods and Services (in % of GDP) 18.819.918.718.721.4

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change)
Volume of imports of goods and services (Annual % change)

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

International Economic Cooperation
India is a member of the following international economic organisations: IMF, South Asian Association for Regional Cooperation (SAARC), Association of Southeast Asian Nations (ASEAN) (dialogue partner), ICC, Colombo Plan, Commonwealth, G-15, G-20, G-24, G-77, WTO, among others. For the full list of economic and other international organisations in which participates India click here. International organisation membership of India is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by India can be consulted here.

Main Partner Countries

Main Customers
(% of Exports)
United States 17.7%
United Arab Emirates 6.9%
Netherlands 4.1%
China 3.3%
Bangladesh 3.1%
See More Countries 64.9%
Main Suppliers
(% of Imports)
China 14.0%
United Arab Emirates 7.4%
United States 7.1%
Saudi Arabia 6.3%
Indonesia 3.9%
See More Countries 61.4%

Source: Comtrade, Latest Available Data



Political Outline

Current Political Leaders
President: Droupadi Murmu (since 25 July 2022) - BJP
Vice President: Jagdeep Dhankhar (since 11 August 2022) - BJP
Prime Minister: Narendra Modi (since 26 May 2014) – BJP
Next Election Dates
Presidential: July 2027
Legislative: April-May 2024
Current Political Context
Re-elected with a broad mandate for a second five-year term in May 2019, Indian Prime Minister Narendra Modi and the ruling coalition are expected to stay in power until the end of the term, in 2024. Modi’s second mandate focuses on job creation, the liberalisation of the economy, and infrastructure investment, while also tackling corruption and promoting Hindu nationalism. Modi's nationalist agenda, however, has dampened foreign investors, who are keen on secular policies. In 2021, India began its two-year tenure as a non-permanent member of the UNSC, marking the eighth time the country has set on the council. Furthermore, in 2022, Indians went to the ballots to vote on both Presidential and state legislative elections. With 64.03% of the votes, BJP candidate, Droupadi Murmu, was elected the new president of India. Droupadi Murmu is the first person belonging to the tribal community and also the second woman to hold the office, as well as the youngest person to occupy the post. Furthermore, the former Governor of West Bengal and BJP candidate, Jagdeep Dhankhar, was elected vice-president with 74.37% of the votes. The year also say by-elections to the Lok Sabha, elections to the Rajya Sabha, to state legislative assemblies and numerous other elections and by-elections to state legislative councils and local bodies.
Main Political Parties
- Bharatiya Janata Party (BJP): right-wing, pro-Hindu, nationalist ideology; heads the National Democratic Alliance (NDA) coalition and has been the ruling political party of India for the past eight years;
- Indian National Congress (INC): centre to centre-left, big tent party, social democratic, secular; a major party involved in the independence movement; heads the United Progressive Alliance (UPA) opposition coalition;
- Bahujan Samaj Party (BSP): centre-left, social equality. India's third major political party, whose electorate is mainly composed of Dalits and low castes.

Other notable parties:
- All India Trinamool Congress (AITC): centre to centre-right, Bengali nationalist, populist
- Dravida Munnetra Kazhagam (DMK): centre-left, social democratic, regionalist
- Biju Janata Dal (BJD): centre to centre-left, social democratic, liberal, populist
-Telugu Desam Party (TDP): centre-right, neoliberal, populist, regionalist
- Communist Party of India (CPI): far-left, Communist, Marxist-Leninist
- Nationalist Congress Party (NCP): centre to centre-left, nationalist
- National People's Party (NPP): centre to centre-left, regionalist, ethnocentrist

Executive Power
The President is the Chief of State and the Commander-in-Chief of the Armed Forces. He/she is indirectly elected for a five-year term by an electoral college, which consists of elected members of both houses of Parliament as well as the legislative assemblies of each of India's states and territories.
The Prime Minister is the Head of Government and is chosen by Lok Sabha members (House of the People, lower chamber) of the majority party, following legislative elections, to serve a term of five years. The President, on the recommendation of the Prime Minister, appoints the Cabinet.
Legislative Power
The Indian legislature is bicameral. The Parliament consists of the Council of States (Rajya Sabha) and the House of the People (Lok Sabha). The Council of States has 245 members serving a six-year term, while the House of the People has 543 members serving a five-year term.


COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic)underundertaken by the government of India, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.