The second most populous country in the world is another one of the world’s emerging economic powerhouses. India is the 12th-largest economy, with a gross domestic product of $1.21 trillion and a growth rate of 6.5 percent in 2009. However, this growth has not been evenly distributed – 700 million Indians live on $2 or less a day and the middle class, while growing, is still only 50 million of its 1.17 billion people. The middle class is expected to expand ten-fold by 2025.
India’s attempts at economic reforms – tariff reductions, financial modernization, and stronger intellectual property rights, to name a few – have been sporadic. Corruption is still a big problem, as are excessive bureaucracy, investment controls, and economic policies that undermine efforts at economic liberalization.
The services industry accounts for 54 percent of GDP, while industry makes up 29 percent and agriculture 18 percent. Outsourcing to India has become common practice in the US. The software sector in particular is booming, generating $35 billion in exports in 2009. The US is India’s largest investment partner.
Source: US State Department
