Economy of India

Lore & Background

Maritime trade was extensive between southern India and Southeast Asia and West Asia from early times until around the fourteenth century CE. Overland trade was carried out via the Khyber Pass. By the late 17th century, the Mughal Empire had become the largest economy and manufacturing power in the world, producing about a quarter of global GDP, before fragmenting and being conquered over the next century.

Reader's Guide

India's economic significance stems from its large domestic market, with nearly 70% of GDP driven by domestic consumption, and its role as the world's third-largest consumer market. It is often described as the 'pharmacy of the world', supplying around one-fifth of global pharmaceutical demand and being the largest vaccine manufacturer globally by volume. India ranks 41st on the Global Competitiveness Index and 39th in the Global Innovation Index. India is a lower-middle income country with much of its modern economic development focused on improving standards of living for its population, which has been the largest in the world since the mid-2020s. The accuracy of Indian economic and inflation data has been challenged by the IMF for not suitably incorporating the informal sector and consumption.

Did You Know?

• India is the world's largest vaccine manufacturer by volume, accounting for over 60% of global production.
• Nearly 63% of India's population lives in rural areas, generating about 46% of Indian GDP.
• India has free-trade agreements with many world nations, including the European Union.