Economy of India

The economy of India is a developing mixed economy with a notable public sector in strategic sectors. It is the world's fourth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP); on a per capita income basis, India ranked 136th by nominal GDP and 119th by PPP-adjusted GDP. From independence in 1947 until 1991, successive promoted protectionist economic policies, with extensive state intervention, demand-side economics, natural resources, bureaucrat-driven enterprises and economic regulation. The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning. India has about 1,900 public sector companies, with the Indian state having complete control and ownership of railways. While the Indian government retains ownership through the National Highways Authority of India (NHAI), a large share of new national highway projects are now built and maintained under Public–private partnership (PPP) models rather than being fully government‑funded. The government plays a major role in sectors like supercomputing, space and shipping but private participation is growing, especially in space, telecom, and satellite communications.

Nearly 70% of India's GDP is driven by domestic consumption; the country remains the world's third-largest consumer market. Aside from private consumption, India's GDP is also fueled by government spending, investments, and exports. As of 2025, India is the world's 7th-largest importer and the 10th-largest exporter. India is often described as the “pharmacy of the world,” supplying around one-fifth of global demand for generic medicines and exporting pharmaceuticals to over 200 countries in 2023–24, with approximately 70% of exports destined for highly regulated markets such as North America and Europe. In the United States, Indian pharmaceutical companies supply nearly half of all generic prescriptions by volume. India is also the largest vaccine manufacturer globally by volume, accounting for over 60% of the world’s vaccine production. India has been a member of the World Trade Organization since 1 January 1995. It ranks 41st on the Global Competitiveness Index and 39th in Global Innovation Index. As of 2025, India ranks third in the world in total number of billionaires. According to the World Bank, India's Gini index fell to 25.5 in 2022‑23, making it the fourth-most equal country globally, suggesting significant progress in income equality. Economists and social scientists often consider India a welfare state. India's overall social welfare spending stood at 8.6% of GDP in 2021-22.

As of 2025, the service sector accounts for around 55% of GDP. India has two of the world's ten largest stock exchanges (both by trade volume and market capitalisation). According to United Nations Industrial Development Organization (UNIDO) India is the world's fifth-largest manufacturer, representing 3.2% of global manufacturing output. India’s digital economy was estimated at US$402 billion in 2022–23, equal to about 11.74% of GDP, and is projected to rise to around 13.4% by 2024–25 and nearly 20% of GDP by 2029–30, with its total value expected to surpass US$1 trillion by 2029. Nearly 63% of India's population is rural, and contributes about 46% of India's GDP. India's unemployment rate remained at 3.2% in 2023–24. In 2025, the IMF gave Indian GDP a 'C' grade, and mentioned that Indian national accounts and inflation data is not accurately recording the informal sector and people’s spending patterns.