Economy of India

India has a developing mixed economy with important government roles in key areas. As of April 2026, it is the world's sixth-largest economy by total value and the third-largest when considering the power to buy goods and services, known as purchasing power parity (PPP). This means many people in India are still working to improve their daily lives, as shown by its rank of 149th by nominal GDP and 119th by PPP-adjusted GDP per person in 2026.

From independence in 1947 until 1991, India’s economy grew slowly due to strict rules and strong government control. A serious money problem in 1991 led to big changes that opened up the economy. Today, India has about 1,900 government-owned companies, but private businesses are growing, especially in areas like telecom and space.

Nearly 70% of India’s economy comes from what people buy and use every day, making it the world’s third-largest consumer market. The service sector, which includes jobs like banking, education, and technology, makes up about 55% of the country’s economy. India is also known as the “pharmacy of the world,” providing about one-fifth of all medicines used globally and making more than 60% of the world’s vaccines. Additionally, India’s digital economy is growing fast, and its total value is expected to exceed US$1 trillion by 2029.

India belongs to many global groups, such as the World Trade Organization, and has trade deals with countries like the European Union. The country is working hard to raise the quality of life for its people, who make up the largest population in the world. Despite progress, challenges remain in measuring the full extent of economic activity, especially in areas where many people work without official records.

History

Main articles: Economic history of India and Timeline of the economy of the Indian subcontinent

The Indus Valley Civilisation, an early civilisation in India and Pakistan, developed an economy based on farming and crafts that later spread into central India. From 1 to 1000 AD, regions that are now part of India made up about 30% of the world's population and economic output.

India saw growth in income per person during the middle ages. By the late 1600s, much of the Indian subcontinent was united under the rule of the Mughal Emperor Aurangzeb. At one point, this empire became the largest economy and manufacturing power in the world, producing around a quarter of the world's goods, before breaking apart and being taken over in the following century. After British rule ended, India used a mix of protective policies, government control, and planning. Since 1991, ongoing economic changes have moved the country toward a market-based economy. By 2008, India had become one of the world's fastest-growing economies.

Ancient and medieval eras

Indus Valley Civilisation

People in the Indus Valley civilisation, which thrived between 2800 BCE and 1800 BCE, farmed, raised animals, used standard weights and measures, made tools and weapons, and traded with other cities. Evidence shows they had well-planned streets, drainage systems, and water supplies, showing their knowledge of city planning, including early sanitation systems and a form of local government.

West Coast

Trade by sea happened a lot between southern regions of India and Southeast Asia and West Asia from early times until around the 1300s. Both the Malabar and Coromandel Coasts were important trading places from as early as the first century BCE, used for trading and as stops between the Mediterranean region and southeast Asia. Over time, traders formed groups that got support from the government. This support for trade ended in the 1300s when it was mostly taken over by local communities from places like the Malabar and Coromandel coasts.

Silk Route

Some researchers suggest trading from India to West Asia and Eastern Europe was active between the 1300s and 1800s. During this time, Indian traders lived in Surakhani, a part of larger Baku, Azerbaijan. These traders built a Hindu temple, showing that trade was active and successful for Indians by the 1600s.

Further north, the Saurashtra and Bengal coasts played big roles in sea trade, and the Gangetic plains and the Indus valley had many places for river trade. Most land trade happened through the Khyber Pass connecting the Punjab region with Afghanistan and then to the Middle East and Central Asia. Although many rulers made coins, trading without money (barter) was common. Villages gave part of their farm produce to rulers as tax, while workers got crops for their services.

Silver coin of the Maurya Empire, 3rd century BCE

Silver coin of the Gupta dynasty, 5th century CE

Mughal, Rajput, and Maratha eras (1526–1820)

See also: Muslin trade in Bengal and Economy of the Kingdom of Mysore

The Indian economy was the largest and most successful in the world and stayed that way under the Mughal Empire until the 1700s. Sean Harkin estimates that China and India may have made up 60 to 70 percent of the world's economy in the 1600s. The Mughal economy worked on a system of money, taxes on land, and trade. The empire made gold, silver, and copper coins. Political stability and uniform tax rules under the central government, along with a well-developed trade network, kept India mostly united economically, even though it was mainly based on farming.

The Mughal Empire had a strong manufacturing economy, with India making about 25% of the world's goods up until 1750, making it the most important place for making things in world trade. Made goods and crops from the Mughal Empire were sold all over the world. Key industries included textiles, shipbuilding, and steel. Exports included cotton fabrics, yarn, thread, silk, jute products, metal goods, and foods like sugar, oils, and butter. Cities and towns grew under the Mughal Empire, which had more people living in cities than Europe at the time, with 15% of its people in urban areas, more than in British India in the 1800s.

In early modern Europe, there was big demand for products from Mughal India, especially cotton fabrics, along with goods like spices, peppers, indigo, silks, and saltpeter (used in munitions). European fashion depended more and more on fabrics and silks from Mughal India. From the late 1600s to the early 1700s, Mughal India made up 95% of British imports from Asia, and the Bengal Subah province alone made up 40% of Dutch imports from Asia. In contrast, there was very little demand for European goods in Mughal India, which was mostly self-sufficient. Indian goods, especially from Bengal, were also sold in large amounts to other Asian markets, like Indonesia and Japan. At the time, Mughal Bengal was the most important place for making cotton fabrics.

In the early 1700s the Mughal Empire weakened, losing western, central, and parts of south and north India to the Maratha Empire, which took over and managed those areas. The fall of the Mughal Empire led to less farming output, which hurt the textile industry. The main economic power after the Mughal Empire was the Bengal Subah in the east, which kept strong textile industries and relatively good wages. However, this area was damaged by Maratha invasions of Bengal and then British colonization in the mid-1700s. After losing at the Third Battle of Panipat, the Maratha Empire split into several states, and the political fights and wars that followed badly hurt the economy in many parts of the country – though some new kingdoms did well in their own areas. By the late 1700s, the British East India Company had entered Indian politics and taken control from other European powers. This marked a big shift in India's trade and a smaller effect on the rest of the economy.

British era (1793–1947)

There is no doubt that our complaints about the British Empire had good reasons. As historian Angus Maddison carefully showed with numbers, India's share of world income fell from 22.6% in 1700, almost the same as Europe's 23.3% at that time, to as low as 3.8% in 1952. In fact, at the start of the 1900s, "the brightest jewel in the British Crown" was the poorest country in the world in terms of income per person.

—​Manmohan Singh

From the early 1800s, the British East India Company slowly grew its power and changed taxes and farming rules, which focused more on trading crops, leading to less food grown, many farmers losing their land, and severe shortages of food and many people suffering. British rule also hurt India's handmade goods and weaving industries because there was less need for them and jobs went down. After rules changed in 1813, Indian trade grew a lot with steady increases. But this led to a big movement of money from India to Britain, which, because of British policies, took money away instead of helping India's economy grow. The economy of the Indian subcontinent was the largest in the world for most of history until colonialism started in the early 1800s.

Under British rule, India's share of the world economy fell from 24.4% in 1700 to 4.2% in 1950. India's GDP (PPP) per person stayed the same during the Mughal Empire and began to go down before British rule started. India's share of world manufacturing went from 25% in 1750 to 2% in 1900. At the same time, Britain's share of the world economy grew from 2.9% in 1700 to 9% in 1870. After the British East India Company took over Bengal in 1757, they opened India's big market to British goods, which could be sold in India without taxes, while Indian makers faced heavy taxes. In Britain, there were rules and high taxes to stop Indian fabrics from being sold there, but raw cotton from India could be sent to British factories without taxes. These factories made fabrics from Indian cotton and sold them back to India. British policies gave them control over India's market and cotton.

British expansion in India during the 1800s created rules that, on paper, protected property, encouraged free trade, used one money system with fixed values, standard weights and measures, and money markets in the areas they controlled. They also set up railways, telegraphs, a government system meant to be free from politics, common laws, and court systems. This happened at the same time as big changes in the world economy – industrialisation and big growth in making and trading things. But by the end of colonial rule, India was one of the poorest in the developing world, with industry not growing, farming not able to feed a fast-growing population, most people unable to read or have skills, and very poor services.

The 1872 count showed that 91.3% of people in what is now India lived in villages. This was less than the Mughal time, when 85% lived in villages and 15% in towns under Akbar in 1600. Growing cities stayed slow in British India until the 1920s because there wasn't much industry and poor travel. Later, rules to help certain industries, plus World War II, led to industry growth and people moving to cities, especially big port cities like Bombay, Calcutta, and Madras. But even by 1951, only one-sixth of India's people lived in cities.

The effect of British rule on India's economy is debated. Leaders of the Indian independence movement and economic historians have said colonial rule was to blame for India's bad economy after independence and argued that the money for Britain's Industrial Revolution came from India. Others have said India's bad economy was because different parts were growing and shrinking due to changes from colonialism and a world moving toward industry and economic integration.

Some economic historians have said Indian incomes went down in the early 1800s, or maybe the very late 1700s, mainly because of British colonial rule. According to Prasannan Parthasarathi and Sashi Sivramkrishna, the daily wages for Indian cloth workers were likely similar to British workers and their average income was around five times what they needed to live, which was like advanced parts of Europe. But they said because there isn't much data, it's hard to be sure and more study is needed. It has also been said that India went through a time when making things lessened in the latter half of the 1700s as an indirect result of the Mughal Empire falling apart.

Pre-liberalisation period (1947–1980)

Main articles: Five-Year Plans of India, Economic policy of the Indira Gandhi government, and Licence Raj

After India became independent, its economic policy was shaped by the bad effects of colonial rule, which Indian leaders thought took advantage of the country. Domestic policy leaned toward protecting the country, with a strong focus on making things inside the country, government control of the economy, regulating businesses, and planning the economy, while trade and foreign money rules were more open. Five-Year Plans of India were like central planning in the Soviet Union. Industries like steel, mining, tools for making things, telecommunications, insurance, and power plants were mostly taken over by the government in the mid-1950s. The Indian economy during this time is described as Dirigism.

Never talk to me about profit, Jeh, it is a dirty word.

—​Nehru, India's Fabian Socialism-inspired first prime minister to industrialist J. R. D. Tata, when Tata suggested state-owned companies should be profitable

Jawaharlal Nehru, the first prime minister of India, along with statistician Prasanta Chandra Mahalanobis, made and guided economic policy in the early years after the country gained independence. They hoped for good results from their plan, which focused on quickly growing big industries using both government and private sectors, and based on helping the government control things, rather than the more extreme Soviet-style system. The Avadi Resolution in January 1955 said the goal of the Indian National Congress was to create a "socialistic pattern of society" in India. The plan to focus on both big industries that need capital and technology and help small handmade industries was criticised by economist Milton Friedman, who thought it would waste resources and slow down small makers.

I cannot decide how much to borrow, what shares to issue, at what price, what wages and bonus to pay, and what dividend to give. I even need the government's permission for the salary I pay to a senior executive.

—​J. R. D. Tata, on the Indian regulatory system, 1969

Since 1965, using seeds that grow better, more fertiliser, and better water systems helped farming a lot by growing more crops, changing what crops were grown, and linking farming more closely to industry. This was the Green Revolution in India. But it has also been said it was not sustainable, leading to big farms, ignoring rules for farms, and making rich farmers richer and poor ones poorer.

Economic reforms during the 1980s

Indira Gandhi took several steps to open up the economy after returning to power following the 1980 Indian general election. Steps included opening the car industry to private companies like Maruti Suzuki, creating new industrial areas known as Industrial Model Townships(IMT) and Gurgaon, and growing the steel, fertilizer, oil, and cement industries to let private companies join more. They also tried urban changes like creating Navi Mumbai and Noida.

In 1984, The New Computer Policy of 1984 was started by Rajiv Gandhi, which made it easier to bring in technology, encouraged private money, and gave rewards for selling computer services abroad. This included computers, airlines, defense, and telecommunications. Gandhi's government also set up places for technology, tax help, and faster internet to help companies sell computer services worldwide. Rajiv Gandhi's time also saw new systems for moving things, communications, and roads like Nhava Sheva port, Centre for Development of Advanced Computing, Centre for Development of Telematics, CONCOR and the NHAI. These changes led to the economy growing at 5.6% each year during the 1980s instead of 2.9% in the 1970s, but the Soviet Union was India's biggest trading partner, which led to trouble in 1991.

In 1990 Rajiv Gandhi started steps to reduce Licence Raj like letting private businesses and people buy big things, daily goods and import things without lots of paper work. Gandhi later said he would fully open the economy and made V. P. Singh the finance minister, who tried to stop people from cheating on taxes and tax money went up because of this, even though taxes went down. This process stopped during the later part of Mr. Gandhi's time because his government had many problems.

Post-liberalisation period (since 1991-2021)

Main articles: Economic history of India, Economic liberalisation in India, Economic development in India, and Economic policy of the Narendra Modi government

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P. V. Narasimha Rao

Manmohan Singh

Economic liberalisation in India began in 1991 by Prime Minister P. V. Narasimha Rao and his Finance Minister Dr. Manmohan Singh.

The end of the Soviet Union, which was India's main trading partner, and the Gulf War, which made oil prices jump, caused a big problem for India's money, and India almost could not pay its loans. India asked the International Monetary Fund for a $1.8 billion loan, but the IMF said India needed to change its rules.

In reply, the Narasimha Rao government, including Finance Minister Manmohan Singh, started economic reforms in 1991. The changes ended the Licence Raj, lowered taxes and interest rates, and stopped many government monopolies, letting foreign companies come into many areas without approval. Since then, the main direction of opening up has stayed the same, though no government has tried to deal with strong groups like worker unions and farmers on tricky issues like changing job rules and reducing help to farmers. This has been accompanied by longer lives, more people able to read, and enough food, though city people have done better than people in the country.

From 2010, India moved from the ninth-largest to the fifth-largest economies in the world by the amount of money, passing the UK, France, Italy and Brazil by 2019.

India began to get better between 2013–14 when the economy grew by 6.4% from the year's 5.5%. Growth kept going through 2014–15 and 2015–16 with rates of 7.5% and 8.0% respectively. India grew faster than China which had 6.9% growth in 2015.^{[needs update]} However growth slowed to 7.1% and 6.6% in 2016–17 and 2017–18 partly because of the effects of 2016 Indian banknote demonetisation and the Goods and Services Tax (India). But after a slow down from the global problems caused by the COVID-19 pandemic in 2019, India's economy has grown faster than China every year by a big amount and stays among the fastest growing big economies in the world according to the World Bank.

COVID-19 pandemic and new reforms (2021–present)

Main article: Economic impact of the COVID-19 pandemic in India

During the COVID-19 pandemic, many rating agencies said India's economy for the year would be negative, showing a serious drop, the worst since 1979. The Indian economy went down by 6.6 percent, which was less than the guessed 7.3 percent drop. In 2022, agencies like Fitch Ratings and S&P Global Ratings and Moody's Investors Service said India's future looked steady.

In the first three months of 2022–2023, the Indian economy grew by 13.5%.

With 607 million workers, India has the world's second-largest working group, growing fast, with 46.6 million more in 2023–24. India’s birth rate is going down fast, from about 3.3 in 2000 to around 1.9 in 2025, below the level needed to keep the population the same. Labour productivity is lower than in rich countries but like levels in emerging Asian countries such as China. India’s work for selling services abroad has moved from old call centre BPO jobs, now mostly done by the Philippines and other Southeast Asian countries, to valuable work like making software, consultancy, engineering, and research. India has more than half of the world's Global Capability Centres (GCCs), which do product design and research. It is home to about 20% of the world's semiconductor chip design engineers and, as of early 2025, has about 4.3 million software engineers, making up about 14.7% of the world's software engineers.

In 2021–22, foreign direct investment (FDI) in India was $82 billion. The main areas for FDI were Finance, Banking, Insurance and R&D. India has made free trade deals and economic agreements with several countries and groups, including the European Union, ASEAN, SAFTA, Japan, South Korea, Australia, New Zealand, Oman and the United Arab Emirates, while also finishing deals with EFTA (Iceland, Liechtenstein, Norway, Switzerland) and the United Kingdom. India also has agreements to share money and taxes with countries including Bangladesh, Uzbekistan, Kyrgyzstan, Belarus, and Trinidad & Tobago.

In April 2025, the Indian economy passed Japan to become the fourth-largest economy in the world by the amount of money.

In November 2025, the IMF gave India a 'C' for its records on money and changes in prices, saying the records do not correctly show the unofficial economy and how people spend.

2026

In January 2026, India and the EU agreed on what is called the "mother of all deals." After 20 years of talking, they reached a deal on a long-term free trade agreement (FTA). The final signing will happen once all legal issues are solved. Both sides hope it will start working in early 2027.

The free trade deal will cut or end taxes on over 90% of goods, make it easier for companies to sell things and provide services across borders, especially in areas like finance, moving things, and professional services. The deal was criticised by Indian opposition parties who said it did not protect India's interests. The BJP-led government refused to talk about the deal.

In April 2026, the World Bank's South Asia Economic Update said India's economy would grow by 7.6% for the year 2025–26, helped by people spending more, changes to taxes, and trade staying strong, but will likely slow to 6.6% in 2026–27 because of problems in the Middle East.

Data

The table below shows important economic numbers from 1980 to 2024, with some guesses for the years 2025 to 2029. When inflation is below 5%, it is shown in green. The yearly unemployment rate comes from the World Bank, but the International Monetary Fund says these numbers might not be very reliable.

Economic sectors

India has a mixed economy with important public and private parts. It is the world's sixth-largest economy by money value and the third-largest when counting all people together as of April 2026.

Agriculture, fishing, and forestry

Agriculture and related activities like forestry and fishing made up 18.4% of India's money-making activities in 2023. This sector employed about 45.5% of all workers. India has a lot of land for farming but often doesn't get the best results. The amount of money farming adds to the whole economy has gone down since 1951, but it still gives jobs to many people.

India gets about 1,208 millimetres of rain each year and has lots of water. In 2023, India was the third biggest producer of fish and the second biggest in farming fish in tanks. India leads in making milk, jute, and pulses. It is also a big maker of rice, wheat, and other foods.

Micro, Small, and Medium Enterprises (MSME)

There are about 63 million small and medium businesses in India. They add about 35% to the country's money-making and give jobs to over 111 million people. These businesses are important for creating new jobs.

Industrial machinery, tools and manufacturing equipment

The market for machines and tools is growing and is expected to reach $210 billion by 2023. More focus on research and new ideas has brought more money into making tools, machines, and other industrial equipment.

Pulp and paper industry

The making of paper and related products is an important part of India's economy.

Mining, resources, and chemicals

Mining

India has many mines and is a big maker of important minerals. Mining adds to the economy and gives jobs to many people. India has large amounts of rare earth elements, which are important for new technology.

Cement

India is the second-largest maker of cement in the world, just after China.

Iron and steel

India became the second-largest maker of steel in 2019. There are over 900 steel factories in India, and this industry adds a lot to the country's money-making.

Petroleum

Oil and gas products are very important for India's industry. India has big oil factories and makes a lot of chemicals.

Chemicals and fertilizer

The chemical industry in India is growing fast and adds a lot to the economy. It also makes fertilizers that help farmers grow more crops.

Textile

India has a big textile industry, making clothes and other fabrics.

Pharmaceuticals

India makes a lot of medicines and is known for providing cheap and good-quality drugs to the world.

Transportation

Railways and Logistics

The train system in India is very big and important. It helps move people and goods across the country.

Rapid Transit

India is building new fast transit systems in many cities to help people move around easily.

Aviation

India has many airports and is growing fast in air travel. More airports are being built to meet the needs of more travelers.

Shipbuilding

India builds ships for many countries around the world.

IT and telecommunications

Datacentre and cloud

India is becoming a big place for data centers, which help store and manage information for companies.

Electronics and semiconductors

India is growing in making electronic devices and tiny parts called semiconductors.

Telecommunications

India has a lot of people using phones and the internet. It is one of the biggest markets for these services in the world.

Defence

India spends a lot on its military and makes many weapons and tools for defense.

Energy

India uses a lot of energy, mostly from coal and oil. It is also working on using more clean energy like solar and wind power.

Infrastructure

Roads

India has a huge network of roads, which are very important for moving people and goods.

Ports

India has many ports that help move goods in and out of the country.

Aviation

India has many airports, and more are being built to handle more travelers.

Water supply and sanitation

Providing clean water and proper waste management is important for India's health and growth.

Construction and Real Estate

The building and real estate industry in India is growing fast and gives jobs to many people.

Finance and trade

Banking and financial services

India has many banks and financial services that help people and businesses manage their money.

Retail

India's retail market is growing very fast, with many shops and online stores.

Science and technology

India is making progress in science and technology, including areas like artificial intelligence and biotechnology.

Services

Education

India has a large system of schools and colleges to educate its people.

Healthcare

India provides healthcare services to its large population, including special care for visitors from other countries.

Tourism

Tourism brings in money and jobs for India. Many people visit places like the Taj Mahal and other beautiful spots.

Business process outsourcing industry

India is known for helping other countries with tasks like handling calls and services.

Call centre industry

India has many call centers that help companies around the world.

Wedding Industry

India has a very big wedding industry, with many couples getting married each year.

Films, entertainment and music industry

India's film industry, including movies and music, is very popular and growing.

Employment

Main articles: Labour in India and Indian labour law

In India, most people work in farming, with about 46% of all workers in this field. This number has gone up a bit in recent years. The service sector, which includes jobs like teaching, banking, and health care, employs around 29% of workers. Manufacturing jobs make up a smaller part, about 11%.

There are also differences in jobs between men and women. More men have regular jobs with salaries, while many women work for themselves or help family members with farming or small businesses. This means fewer women have steady jobs with fixed pay.

Unemployment

Main article: Unemployment in India

Finding enough jobs for everyone is still a challenge in India. The rate of people without jobs has gone down a little, but many people still don’t have steady work. A lot of workers are their own bosses or help family members without getting paid, which means they might not have secure jobs.

The government has started programs to create more jobs, like giving money to companies that hire new workers for the first time. These efforts are helping, especially in areas like making electronics and cars.

Child labour

Main article: Child labour in India

Working children is a problem linked to poverty, but India has made progress. Many children now go to school instead of working. Only a small number of children between ages 10 and 14 still work, mostly helping families on farms during busy times. Programs like free school meals and more schools have helped reduce child labour. While some risky jobs still happen, they are much less common now.

Diaspora remittance

India has many people living outside the country, about 32 million, who send money home to their families. Places like Saudi Arabia, Dubai, and Abu Dhabi employ many Indian workers. In the past, these remittances were a big source of money for India.

Trade unions

Main article: Trade unions in India

India has many groups that help workers, called trade unions. These groups are based on different political ideas and work to protect workers’ rights. One big group is SEWA, which helps women who work for themselves. These unions have helped make laws that give workers more power and better conditions.

Income and consumption

Main article: Income in India

India's income per person has grown a lot since 2002. It went from about $2,000 in 2002 to around $2,500 in 2024. This shows that people in India are earning more over time. Many families in India have seen improvements in their living conditions. For example, more homes now have electricity and clean water, though some still use firewood for cooking and lack proper sanitation.

Income inequality

Poverty

Main article: Poverty in India

India has worked to help people living in poverty. Programs like the Mahatma Gandhi National Rural Employment Guarantee Act have provided jobs for many families. Even with these efforts, many people still face challenges. Between 2011 and 2023, about 171 million people in India moved out of extreme poverty, which is a big step forward. However, India still has a long way to go to make sure everyone has enough to eat and live a healthy life.

Budget, fiscal policy and Taxation

Main articles: Union budget of India and Taxation in India

See also: Inflation in India and Foreign aid to India

India's government plans its money and spending through a yearly budget. This helps the country manage its resources and support growth. Taxes collected from people and businesses are an important part of this process, providing funds for public services and projects.

Welfare

Main articles: Subsidies in India, Social security in India, Pensions in India, and List of schemes of the government of India

India has programs to help people in need. These include money to help with basic needs, support for older people, and special plans made by the government to care for its citizens. These programs aim to make sure everyone has a chance to live better lives.

Currency

Main articles: Indian rupee and Reserve Bank of India

Foreign reserves

Main articles: Foreign-exchange reserves of India and External debt of India

Exchange rates

Overview

The Indian rupee (₹) is the only money that people can use in India. It is also used in Nepal and Bhutan, where they tie their money to the Indian rupee. The biggest banknote used to be ₹2,000, but it was replaced by the ₹500 note in 2023. The smallest coin you can find is worth ₹1. In 2017, old ₹500 and ₹1000 notes were taken out of use and replaced with new ₹500 notes.

The Reserve Bank of India (RBI) manages the country's money. It was created in 1935 and works as the main bank for the government. The RBI decides important money rules and controls the country's money supply. It is led by a governor who is chosen by the Government of India.

The Indian rupee used to be tied to the British pound and later to the US dollar. In 1991, India had trouble with its money because of problems with its biggest trading partner, the Soviet Union. After that, the value of the rupee was mostly decided by market forces. In October 2022, the rupee reached its lowest value ever, at 83.29 to one US dollar.

Security markets

See also: List of stock exchanges in India, List of Indian exchange-traded funds, Mutual funds in India, Securities and Exchange Board of India, and Financial regulation in India

The Indian security markets started with the opening of the Bombay Stock Exchange in July 1875 and the Ahmedabad Stock Exchange in 1894. Over time, 22 other exchanges opened in different Indian cities. By 2014, India's stock market became the 10th largest in the world by value, just above South Korea and Australia. The two biggest stock exchanges in India, BSE and the National Stock Exchange of India, had values of US$1.71 trillion and US$1.68 trillion in February 2015. By September 2021, these values grew to $3.36 trillion and $3.31 trillion.

The market for new company shares, called initial public offerings (IPOs), has been smaller in India compared to big markets like NYSE and NASDAQ. In 2013, it raised US$300 million, and in 2012, US$1.4 billion. Experts said this was because of market conditions, slow government approvals, and complicated rules. Before 2013, Indian companies had to list their shares in India first before listing them anywhere else in the world. But in 2013, the rules changed, allowing companies to choose where to list first: overseas, in India, or both at the same time. The rules were also changed to make it easier for companies already listed in India to list overseas, helping more investors buy shares in Indian companies.

Foreign trade and investment

Main articles: Foreign trade of India, List of exports of India, and Free trade agreements of India

See also: Globalisation in India

Foreign trade

India's exports (top) and imports (bottom), by value, in 2013–14

India's foreign trade by year

Before 1991, India stayed away from world markets to protect its economy and aim for self-reliance. Trade rules made it hard to buy or sell goods abroad. But after 1991, India opened up more, and trade grew fast. Today, trade makes up a big part of India’s economy. India trades a lot with places like the European Union, China, the United States, and the United Arab Emirates. Key things India sells include engineering goods, fuels, chemicals, and gems. Important things India buys include oil, machines, and electronic goods.

India helps many countries by talking about fair trade rules. In 2019, India ranked 43rd in how easy it is to do business.

Balance of payments

Since India became independent, it has spent more money on things like oil than it earns from selling goods. But after opening up its economy in the 1990s, India’s sales grew. Still, buying oil costs a lot, causing a big gap between what India earns and spends. India has had to borrow money or get help from other countries to cover this gap. However, India’s money reserves have grown, showing strong progress.

Foreign direct investment

Main article: Foreign direct investment in India

See also: List of special economic zones in India

India has become a popular place for foreign money to flow in, especially in technology and manufacturing. Rules have changed over time to make it easier for foreign companies to invest. This has helped India grow in many areas, like buildings, defense, and retail. From 2000 to 2010, India received a lot of foreign investment, and more recently, it has continued to grow.

Outflows

Since 2000, Indian companies have also invested money abroad, creating jobs in places like the United States and Europe. One big Indian company now employs many people in the United Kingdom.

Remittances

Main article: Remittances to India

In 2015, people working abroad sent a lot of money back to India, helping the country’s economy. The United Arab Emirates, the United States, and Saudi Arabia were big senders of this money.

Mergers and acquisitions

Between 1985 and 2018, many big business deals happened in and out of India, worth a lot of money. The year 2010 saw the most valuable deals.

Here is a list of the top 10 deals with Indian companies participating:

Economic issues

Corruption

Main articles: Corruption in India and Indian black money

Corruption has been a big problem in India. Studies show that many people have had to pay extra money or use special connections to get things done by government offices. Over time, efforts to fight corruption have helped improve things a little.

Rules and systems that were too complicated used to make corruption worse. But now, using computers for services, laws that let people ask for information, and special groups watching over things have helped reduce corruption.

Literacy rates

Main article: Literacy in India

India has been working hard to get more children into school and help people learn to read and write. Many more people can read now than before, but there is still work to do. Some places and groups of people still have fewer chances to learn.

Economic disparities

Main articles: Economic disparities in India, Poverty in India, and Standard of living in India

India's economy is not the same everywhere. Some areas are much poorer than others, with fewer chances for jobs and good living conditions. Richer states have more factories and services, while poorer ones struggle. But India has been working to help more people live better lives, and many have moved out of very poor situations.

Climate change

Main article: Climate change in India

See also: Carbon market in India and Conservation in India

Banks in India are helping fund projects that are good for the environment. India also has many wild animals, like tigers, and people have been working hard to protect them. Changes in the weather are affecting where some animals live, and conservation efforts are important.