We explore the country of India and take a closer look at the prominent sectors and businesses that contribute to its economy.
India has a rich history.
55,000 years ago, Homo sapiens first arrived to the land leading to thousands of years of diverse growth and evolving culture. Turning the clock forward to later ages sees regions of India ruled over by the likes of the Maurya Empire and even later the Mughal Empire, adding in their own ways to the gradual formation of the India we know today.
This history has led to the creation of a country famous for its diversity of people, culture and industry, all set within a land of incredible geography that ranges from lush jungles to dry mountains and deep river valleys. The nation is not only beautiful but also sizable, being the seventh largest country in the world with regard to landmass, and with the second highest population of over 1.38 billion people (with 21.75 million in its capital of New Delhi alone) after China.
The most populous democracy in the world, India (officially the Republic of India) is also home to a multitude of sectors active on a titanic scale. The country’s economy is the sixth largest in the world in terms of gross domestic product (GDP) and the third largest with regard to purchasing power parity (PPP).
The services sector is the largest of all sectors within India, boasting 60 percent of the country’s GDP, while employing a surprising (yet still substantial) 25 percent of the country’s workers. Exemplifying the services sector’s size is the healthcare and pharmaceutical industry; India is the largest producer and supplier of pharmaceutical drugs in the world, with the sector providing over half of the globe’s demand for vaccines as well as a whopping 40 percent of standard drug demand across the US and 25 percent in the UK.
While the services remain the largest, there are several sectors that stand out as sizable contributors to India’s economy.
Despite India’s average crop yield measuring at 30 to 50 percent of that of the highest crop yield in the world, agriculture is another of the country’s giants.
In 2014, the sector and those related to it, such as logging, fishing and forestry, accounted for 17 percent of India’s GDP; 49 percent of the country’s total workforce actively work in this sector during the year. And two years later these numbers had climbed; agriculture accounted for 23 percent of total GDP and employed a massive 59 percent majority of the country’s workforce.
Agriculture is still the largest employment source and a significant piece of the overall economy, as well as remaining a sector of continuing developments in modern practices and technology.
Manufacturing is one of India’s most significant sectors.
The manufacturing industry accounts for a massive 26 percent of the country’s GDP and employs 22 percent of the total existing workforce. According to the World Bank, industrial manufacturing in the country during 2015 was the sixth largest globally, measured at $559 billion.
The industry underwent significant changes in the light of the 1991 economic reforms. These reforms improved infrastructure, liberalised direct investment from foreign bodies, led to the privatisation of many government-owned public-sector industries, introduced foreign competition, removed import restrictions, and led to an expansion in the production of fast-moving consumer goods within and across Indian manufacturing.
After this liberalisation, Indian industry was faced with increasing competition both domestically and from abroad. This includes the cheaper Chinese imports, goods from the key global player in low cost and swift manufacturing. Since then, India has been able to somewhat handle the competition in a variety of ways such as investing in cheap labour and new technology.
The mining sector of India is a substantial contributor to its national economy. On top of providing around 700,000 jobs, annually the sector contributes between two and 2.5 percent of total GDP and makes up between 10 to 11 percent of the GDP of the entire industrial sphere within the country; small-scale mining companies and activities alone form six percent of all Indian mineral production.
The country’s mining space is well known for being one of the globe’s largest producers of resources such as alumina, chromite, bauxite, sheet mica, chromite, natural gas, diamonds, limestone, thorium, iron ore and coal; the latter of which India has the fourth largest reserves in the world.
Almost half of all of India’s mining industry output value is concentrated across eight states: Jharkhand, Telangana, Andhra Pradesh, Odisha, Rajasthan, Chhattisgarh, Madhya Pradesh and Karnataka. On top of this, an additional 25 percent of the country’s output comes from offshore oil and gas resources; another of India’s prominent and growing sectors.
In line with the mining and manufacturing space within India, engineering stands as a substantial sub-sector and the third largest with regard to exportation.
The engineering sphere covers transport equipment, capital goods, transformers, machine tools, cars, railways, and many other goods for domestic or foreign industrial and infrastructure development. Four million workers are employed in the sector, and on a value basis it holds a worth of over $67 billion regarding engineering goods exported.
Within engineering, India serves the automobile, motorcycle and scooter industry (the latter two of which are well known for being prominent in the large urban centres of the country), and machinery that is utilised across a variety of productivity sectors, such as tractors for agriculture and diggers for use in the construction industry.