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Economic & Business Environment in India
This document summarizes economic indicators and foreign trade trends in India. It reports GDP growth, inflation, fiscal balance, export growth, import growth, current account balance, external debt, and currency exchange rates from 2006-2010 and projections for 2012. It also outlines India's history with the IMF, transition to a more open foreign exchange system, trends in foreign direct investment and trade. Tables provide data on top export and import items and trading partners from April to September 2010-2011. The document concludes with examples of allowed foreign direct investment caps across various sectors.
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Economic & Business Environment in India
- 1. Economic & BusinessEnvironment in India JeevanPrasad Chinthala AjayPrasad Siripuram
- 2. Economic Indicators 06-10 avg. 2010 2011 2012 (exp) GDP (% growth, real) 8.4 8.8 7.5 7.6 Inflation (%, year-end) 8.8 12.0 7.0 5.5 Fiscal Balance (% of GDP) -4.6 -5.1 -5.6 -5.0 Exports (% growth) 18.9 34.1 32.2 16.5 Imports (% growth) 20.3 30.3 26.1 13.3 Current Account (% of GDP) -1.8 -3.0 -3.2 -2.5 External Debt (% of GDP) 16.7 14.6 13.7 12.3 Currency (per USD, year-end) 44.7 44.8 52 ---
- 3. Foreign Trade andInvestment • In 1945, India became a member of IMF • Till the early 1990s, the foreign exchange market in India used to be tightly controlled by the Reserve Bank of India, the central bank. • Since then, the foreign exchange system has become fully convertible on current account and partially convertible on capital account. • India has started attracting substantial quantities of foreign direct investment (FDI) as well as foreign portfolio investment. • Indian companies have also started investing abroad in a big way.
- 5. Top 5 ExportItems – India – Apr-Sept 2010-11 Category % Age Petroleum ( Crude & Products 16.9% Gems & Jewellery 14.9% Transport Equipment 8.3% Machinery & Equipments 4.8% Drugs/Pharma/Fine Chemicals 4.6% Others 50.5%
- 6. Major Export DestinationsApr- Sept 2010-11 Country % Age UAE 14.0% USA 11.1% China 5.2% Hong Kong 4.4% Singapore 4.3% ROW 61.0%
- 7. Top 4 ImportItems – India – Apr-Sept 2010-11 Category % Age Petroleum ( Crude & Products 30.1% Pearls/Semi Precious Stones 7.7% Gold 7.6% Machinery Except Electrical & Electronics 6.7% Others 47.8%
- 8. Major Import CountriesApr- Sept 2010-11 Country % Age China 12.0% UAE 7.2% KSA 6.2% USA 5.3% Swiss 5.2% ROW 64.1%
- 10. Examples of SectoralGuidelines Sector/ Activity FDI Cap/ Equity Sector/ Activity FDI Cap/ Equity Airports – Greenfield 100% Floriculture, 100% Airports - Existing 100% Horticulture, etc. Scheduled Air 40% - FDI, 100% Power (excl. atomic 100% transport services - NRI energy) Mining 100% Coal & Lignite 100% Banking – Pvt. Sector 74% (FDI + FII) Drugs & Pharma 100% Defence Production 26% NBFCs 100% Insurance 26% Refining (petroleum 49% - PSUs, & natural gas) 100% -Pvt. Wholesale/ Cash and 100% Newspapers 26% carry trading Special Economic 100% Telecommunication 74% (incl Zones Services FDI,FII,NRIs,etc)
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