India, traditionally, has been a predominantly agrarian economy and gradually embraced an open market economic policy when it opened up to global competition in 1991. The Indian economy has taken a quantum leap from thereon and is today identified by mostly free market exchange, investment by foreign companies and liberalized foreign trade.
A significant shift in the economy of India has been observed since the 1990s regarding external trade regulations and investment strategies. Of late, India has emerged as an economic power not only in South Asia but over the world as well. Several economists have predicted that the Indian economy would be a major force to reckon with in the coming decades.
Over the last three decades, the agro-based economy of India has made the way for a market-driven economy with enough investment opportunities in retail, finance, telecommunications, insurance, infrastructure, information technology, manufacturing and others. Besides, significant improvement has been noticed in the human capital index of the country with more skilled workers finding employment.
The Indian economy is among the top five countries with regard to purchasing power parity (PPP). In the 2010-11 fiscal, the PPP of the economy of India was $4.06 trillion and $1.54 trillion as per the official exchange rate. The GDP of the Indian economy also grew in double digit with the dominance of the tertiary or the service sector. This is evident from the fact that this sector contributes 55.3 per cent of the GDP in the 2010-11 fiscal as against 28.6 per cent of the manufacturing sector and 16.1 per cent of the agricultural sector. However, of the total workforce of the economy of India, the agricultural sector employs 52 per cent of the total labour.
The Indian economy is one of the leading food grains producers of the world. Wheat and rice are the two most important crops of the country. Millets and maize are also produced in enough numbers and oilseeds and lentils also make a substantial contribution to the economy of India. Tea, jute, cotton and sugarcane are the four most important cash crops for the country. India, again, is the forerunner in the production of all these crops.
Among the industries, chemicals, textiles, ship building, steel and engineering goods are the traditional large-scale industries. Other than these, cement, petrochemicals, pharmaceuticals and automobiles have emerged as the sunrise sectors of the economy of India. Because of the huge buying power of the people, the Indian economy has grown as a major investment destination for both international and domestic entrepreneurs and investors. The country mostly imports crude oil, chemicals, fertilizers etc. Over the years, the imports have decreased and exports have increased. This is an indicator that the economy of India is pursuing a healthy growth trajectory.