India has always been known to be an agrarian economy. Thereby, meaning that the economy is mostly agriculture based. But today the economy is the ninth largest in the world based on nominal GDP and the third largest economy based on PPP or purchasing power parity.
India today has a stronghold among the other major G-20 economies of the world and is also a member of BRICS. If we consider on the basis of per-capita income, we would find that India stands at 141 again by nominal GDP and at 131 by GDP based on PPP, or purchasing power parity, for the year 2012, according to IMF.
From the year 1947 to 1991, Indian economy was based on the principle of mixed economy, combining the features of both capitalism and socialism.
But the result was an import substituting economy which failed to grow. In 1991, however, this scenario changed.
India became more adoptive of liberal as well as free market principles which opened the doors of the economy to international trade and commerce.
As a result, not only did the per-capita income increase, but the economic growth also grew in leaps and bounds. Today the economy is extensively market-based.
Across the seas and oceans
In 1991, the economic liberalizations did away with the erstwhile License Raj and at the same time aimed at reducing public monopolies by reducing tariffs and interest rates, thus paving the way for FDI or foreign direct investments in different sectors.
In a market economy, investment, production and distribution are all based on demand and supply. Hence, the prices of goods and services are based on free price system. In India, the private sector and deregulation both are playing an important role in the economic growth of the country. India is a chosen destination for most foreign companies.
When we are referring to exporters in India, we need to specially mention the following items which are exported from India. They can be listed under as:
- Jute products – It is an important item of traditional export and it is exported to countries like America, Canada, Australia, New Zealand, Burma, Cuba and Thailand. Though there is stiff competition from Bangladesh, yet this natural product has already won many hearts abroad.
- Tea – It is another important item of export that features on this list. Again this is one of the traditional exports of India. Today, India exports tea to countries like the U.K., Canada, Ireland, Sudan, Australia and many other countries.
- Iron Ore – Indian Iron Ore is widely exported to England and Japan and the latter is among the largest consumers of Indian Iron ore.
- Gems and Jewellery – These two items have steadily shown a growth in the international market. The figures for their export show staggering figures.
- Textile Fabrics and Ready-made Garments – textile and ready-made garments along with simple cotton yarn have contributed to a huge surge in Indian exports over the years.
- Software – this sector is itself turning the people’s opinion for Indian products and services. Today India exports software to around 90 countries and is a major revenue generator for the economy. In the financial year 2011-12, the average revenues have crossed the 100 million dollars mark, thus showing further promise.
The a fore-mentioned product and the companies which manufacture and export them are able to do so thanks to the FDI or foreign direct investment plan of the government, which has not only opened our doors to many foreign companies and their products but also vice-versa.
The economy of any country cannot stand on any one sector. For the holistic development of the economy, sane health of all the sectors is required.