section_path: Economy
section_name: Economy
paragraph_text: Economy
  
  According to the International Monetary Fund (IMF), the Indian economy in 2024 was nominally worth $3.94 trillion; it was the fifth-largest economy by market exchange rates and is, at around $15.0 trillion, the third-largest by purchasing power parity (PPP). With its average annual GDP growth rate of 5.8% over the past two decades, and reaching 6.1% during 2011–2012, India is one of the world's fastest-growing economies. However, the country ranks 136th in the world in nominal GDP per capita and 125th in GDP per capita at PPP. Until 1991, all Indian governments followed protectionist policies that were influenced by socialist economics. Widespread state intervention and regulation largely walled the economy off from the outside world. An acute balance of payments crisis in 1991 forced the nation to liberalise its economy; since then, it has moved increasingly towards a free-market system by emphasising both foreign trade and direct investment inflows. India has been a member of World Trade Organization since 1 January 1995.
  
  The 522-million-worker Indian labour force is the world's second-largest, as of 2017. The service sector makes up 55.6% of GDP, the industrial sector 26.3% and the agricultural sector 18.1%. India's foreign exchange remittances of US$100 billion in 2022, highest in the world, were contributed to its economy by 32 million Indians working in foreign countries. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, and potatoes. Major industries include textiles, telecommunications, chemicals, pharmaceuticals, biotechnology, food processing, steel, transport equipment, cement, mining, petroleum, machinery, and software. In 2006, the share of external trade in India's GDP stood at 24%, up from 6% in 1985. In 2008, India's share of world trade was 1.7%; In 2021, India was the world's ninth-largest importer and the sixteenth-largest exporter. Major exports include petroleum products, textile goods, jewellery, software, engineering goods, chemicals, and manufactured leather goods. Major imports include crude oil, machinery, gems, fertiliser, and chemicals. Between 2001 and 2011, the contribution of petrochemical and engineering goods to total exports grew from 14% to 42%. India was the world's second-largest textile exporter after China in the 2013 calendar year.
  
  Averaging an economic growth rate of 7.5% for several years prior to 2007, India has more than doubled its hourly wage rates during the first decade of the 21st century. Some 431 million Indians have left poverty since 1985; India's middle classes are projected to number around 580 million by 2030. Though ranking 68th in global competitiveness, as of 2010, India ranks 17th in financial market sophistication, 24th in the banking sector, 44th in business sophistication, and 39th in innovation, ahead of several advanced economies. With seven of the world's top 15 information technology outsourcing companies based in India, as of 2009, the country is viewed as the second-most favourable outsourcing destination after the United States. India is ranked 40th in the Global Innovation Index in 2023. As of 2023, India's consumer market was the world's fifth-largest.
  
  Driven by growth, India's nominal GDP per capita increased steadily from US$308 in 1991, when economic liberalisation began, to US$1,380 in 2010, to an estimated US$2,731 in 2024. It is expected to grow to US$3,264 by 2026. However, it has remained lower than those of other Asian developing countries such as Indonesia, Malaysia, Philippines, Sri Lanka, and Thailand, and is expected to remain so in the near future.
  
  According to a 2011 PricewaterhouseCoopers (PwC) report, India's GDP at purchasing power parity could overtake that of the United States by 2045. During the next four decades, Indian GDP is expected to grow at an annualised average of 8%, making it potentially the world's fastest-growing major economy until 2050. The report highlights key growth factors: a young and rapidly growing working-age population; growth in the manufacturing sector because of rising education and engineering skill levels; and sustained growth of the consumer market driven by a rapidly growing middle-class. The World Bank cautions that, for India to achieve its economic potential, it must continue to focus on public sector reform, transport infrastructure, agricultural and rural development, removal of labour regulations, education, energy security, and public health and nutrition.
  
  According to the Worldwide Cost of Living Report 2017 released by the Economist Intelligence Unit (EIU) which was created by comparing more than 400 individual prices across 160 products and services, four of the cheapest cities were in India: Bangalore (3rd), Mumbai (5th), Chennai (5th) and New Delhi (8th).