GDP in India

In the economic kaleidoscope of today's world, India stands out for its dazzling growth and remarkable diversification of its key sectors. With its rich heritage mixed with its forward-looking vision, India has become one of the most dynamic and promising economies.

India's GDP growth

Over the past few decades, India has emerged economically in powerful ways. Its economic growth is currently robust, with an average rate of around 6 to 7%, which refers to the average annual growth of its GDP. In 2023, India's nominal GDP was around 3.5 trillion US dollars or more than 3 trillion euros. This figure has continued to grow since 2020 and part of this increase is due to the inflation that India is experiencing. The latter ranks among the top five economies in the world in terms of nominal GDP.
To support this growth and further promote investment in these sectors, the Indian government has implemented targeted economic policies. Initiatives such as 'Make in Indian' aim to strengthen domestic production in various sectors and attract foreign investment.

Key sectors of the Indian economy

India's current GDP status is driven by its various economic sectors, mainly information technology which is a sub-sector of the service sector, the industrial sector and the agricultural sector. These are the essential drivers that create numerous employment opportunities and promote economic development at different levels.
The services sector represents more than 50% of Indian GDP and includes information technology, financial services, tourism and health services. Industry, for its part, represents around 25% of the country's GDP and includes manufacturing, automobiles, pharmaceuticals and textiles. Domestic production and exports were particularly boosted by initiatives like Make in Indian which strengthened industrial capacity and attracted foreign direct investment. For the agricultural sector, its contribution to GDP is around 15% and employs almost 50% of the Indian population. Industrial diversification has strengthened India's economic resilience as much as the growth of the services sector has been a major driver of the country's economic growth, particularly information technology.

The challenge of economic inequality in India

The numerous economic inequalities in India influence India's GDP growth in several ways and thus pose a major challenge. These include income inequalities, marked regional disparities and unequal access to basic services such as education and health care which together represent a barrier to inclusive and balanced economic development across the country.
Despite the progress made, there are still significant income gaps between rich and poor. Urban regions often prosper faster than rural areas, which contributes to worsening regional inequalities.
These inequalities have a more or less direct impact on GDP by limiting consumption, access to education and health care, investments and innovation. A large part of the population with low purchasing power reduces the demand for goods and services. Restrictions on access to quality education and vocational training reduce the development of human capital and limit productivity. Finally, poor public health reduces the workforce and increases costs for the health system, which negatively affects GDP.

The Indian economy, supported by its key sectors, is showing robust growth despite persistent challenges. However, it begs the question how current realities, such as geopolitical tensions, energy price fluctuations and climate change, are affecting India's GDP and what strategies the country can adopt to mitigate these impacts?