Why to invest in India?

Recent Trends in Indian Economy

  • India has undergone a paradigm shift owing to its competitive stand in the world. The Indian economy is on a robust growth trajectory and boasts of a stable annual growth rate, rising foreign exchange reserves and booming capital markets among others.
  • Indian economy is estimated to grow at 8.5 percent in 2010-11 as compared to the growth rate of 8.0 percent in 2009-10. These GDP figures are based at factor cost at constant (2004-05) prices in the year 2010-11. A growth rate of 19.1 percent is estimated for GDP at current prices in the year 2010-11.
  • The per capita income at current prices during 2010-11 is estimated to have attained a level of US$ 1146.84 as compared to US$ 971.80 for the year 2009-10, showing a rise of 17.9 per cent.
  • Annual growth by economic activity in Gross Domestic Product (GDP) for the year 2010-11, released by the Central Statistics office (CSO) of Government of India

 

S.No.

Industry

GDP for the year 2010-11

at 2004-05 prices
(US$ billion)

at current prices

 

2009-10

2010-11

2009-10

2010-11

1

Agriculture, forestry & fishing

137.06

145.70

226.56

288.36

2

Mining & quarrying

21.69

22.88

32.09

39.83

3

Manufacturing

148.69

160.78

188.27

214.97

4

Electricity, gas & water supply

18.47

19.48

19.27

21.44

5

Construction

73.97

79.99

104.35

123.02

6

Trade, hotels, transport & communication

248.01

273.62

307.29

358.65

7

Financing, insurance, real estate & business services

160.40

176.35

213.63

256.27

8

Community, social & personal services

126.72

135.61

184.16

216.29

Total GDP

933.88

1,013.81 

1,275.63 

1,518.20 

·         Source: Central Statistics Office (CSO), Ministry of Statistics &Programme Implementation, Government of India 
 
 
Percentage change for economic activities are depicted in table below:

S.No.

Industry

Percentage change over previous year

at 2004-05 prices

at current prices

 

2009-10

2010-11

2009-10

2010-11

1

Agriculture, forestry & fishing

0.4

6.6

17.3

27.3

2

Mining & quarrying

6.9

5.8

11.3

24.2

3

Manufacturing

8.8

8.3

10.9

14.2

4

Electricity, gas & water supply

6.4

5.7

10.1

11.3

5

Construction

7.0

8.1

11.1

18.0

6

Trade, hotels, transport & communication

9.7

10.3

12.9

16.8

7

Financing, insurance, real estate & business services

9.2

9.9

21.0

20.0

8

Community, social & personal services

11.8

7.0

25.6

17.6

Total GDP

8.0

8.5

16.1

19.1

·         Source: Central Statistics Office (CSO), Ministry of Statistics &Programme Implementation, Government of India

Advantage India

  • World's largest democracy with 1.2 billion people.
  • Stable political environment and responsive administrative set up.
  • Well established judiciary to enforce rule of law.
  • Land of abundant natural resources and diverse climatic conditions.
  • Rapid economic growth: GDP to grow by 8.5% in 2010-11* and 9.0% in 2011-12.
  • India's growth will start to outpace China's within three to five years and hence will become the fastest large economy with 9-10% growth over the next 20-25 years (Morgan Stanley).
  • Investor friendly policies and incentive based schemes.
  • Second most attractive Foreign Direct Investment (FDI) location in the world: India received a total of US$ 25.9 billion of FDI in 2009-10.
  • Healthy macro-economic fundamentals: Investment rate is expected to be 37% in 2010-11 and 38.4% in 2011-12 while Domestic Savings rate is expected to be 34% in 2010-11 and 36% in 2011-12.
  • India's economy will grow fivefold in the next 20 years (McKinsey).
  • Cost competitiveness; low labour costs.
  • Total labour force of nearly 530 million.
  • Large pool of skilled manpower; strong knowledge base with significant English speaking population.
  • Young country with a median age of 30 years by 2025: India's economy will benefit from this "demographic dividend".
  • The proportion of population in the working age group (15-59 years) is likely to increase from approximately 58% in 2001 to more than 64% by 2021.
  • Huge untapped market potential.
  • The urban population of India will double from the 2001 census figure of 290m to approximately 590m by 2030 (McKinsey).
  • Progressive simplification and rationalization of direct and indirect tax structures.
  • Reduction in import tariffs.
  • Full current account convertibility.
  • Compliance with WTO norms.
  • Robust banking and financial institutions.

"* India's financial year is from April to March. 2010-11 above means April 2010-March 2011."

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