India: Economy

Economically, India often seems like two separate countries: village India, supported by traditional agriculture, where tens of millions live below the poverty line; and urban India, one of the most heavily industrialized areas in the world, with an increasingly middle-class population and a fast-growing economy (and also much poverty). Agriculture (about 50% of the land is arable) makes up some 20% of the gross domestic product (GDP) and employs about 60% of the Indian people. Vast quantities of rice are grown wherever the land is level and water plentiful; other crops are wheat, sugarcane, potatoes, pulses, sorghum, bajra (a cereal), and corn. Cotton, tobacco, oilseeds, and jute are the principal nonfood crops. There are large tea plantations in Assam, Karnataka, Kerala, and Tamil Nadu. The opium poppy is also grown, both for the legal pharmaceutical market and the illegal drug trade; cannabis is produced as well.

Fragmentation of holdings, inefficient methods of crop production, and delays in acceptance of newer, high-yielding grains were characteristic of Indian agriculture in the past, but since the Green Revolution of the 1970s, significant progress has been made in these areas. Improved irrigation, the introduction of chemical fertilizers, and the use of high-yield strains of rice and wheat have led to record harvests. The subsistence-level existence of village India, ever threatened by drought, flood, famine, and disease, has been somewhat alleviated by government agricultural modernization efforts, but although India's gross food output has been generally sufficient for the the needs of its enormous population, government price supports and an inadequate distribution system still threaten many impoverished Indians with hunger and starvation.

India has perhaps more cattle per capita than any other country, but their economic value is severely limited by the Hindu prohibition against their slaughter. Goats and sheep are raised in the arid regions of the west and northwest. Water buffalo also are raised, and there is a large fish catch.

India has forested mountain slopes, with stands of oak, pine, sal, teak, ebony, palms, and bamboo, and the cutting of timber is a major rural occupation. Aside from coal, iron ore, mica, manganese, bauxite, and titanium, in which the country ranks high, India's mineral resources, although large, are not as yet fully exploited. The Chota Nagpur Plateau of S Jharkhand and the hill lands of SW West Bengal, N Odisha, and Chhattisgarh are the most important mining areas; they are the source of coal, iron, mica, and copper. There are workings of magnesite, bauxite, chromite, salt, and gypsum. Despite oil fields in Assam and Gujarat states and the output (since the 1970s) of Bombay High offshore oil fields, India is deficient in petroleum. There are also natural-gas deposits, especially offshore in the Bay of Bengal.

Industry in India, traditionally limited to agricultural processing and light manufacturing, especially of cotton, woolen, and silk textiles, jute, and leather products, has been greatly expanded and diversified in recent years; it employs about 12% of the workforce. There are large textile works at Mumbai and Ahmadabad, a huge iron and steel complex (mainly controlled by the Tata family) at Jamshedpur, and steel plants at Rourkela, Bhilainagar, Durgapur, and Bokaro. Bengaluru has computer, electronics, and armaments industries. India also produces large amounts of machine tools, transportation equipment, chemicals, and cut diamonds (it is the world's largest exporter of the latter) and has a significant computer software industry. Its large film industry is concentrated in Mumbai, with other centers in Kolkata and Chennai. In the 1990s the government departed from its traditional policy of self-reliant industrial activity and development and worked to deregulate Indian industry and attract foreign investment. Since then the service industries have become a major source of economic growth and in 2005 accounted for more than half of GDP; international call centers provide employment for an increasing number of workers.

Most towns are connected by state-owned railroad systems, one of the most extensive networks in the world. Transportation by road is increasing, with the improvement of highways, but in rural India the bullock cart is still an important means of transportation. There are international airports at New Delhi, Kolkata, Mumbai, and Chennai. The leading ports are Mumbai, Chennai, Kolkata, Kochi, and Vishakhapatnam. The leading exports are clothing and textiles, gems and jewelry, engineering products, chemicals, leather goods, computer software, cotton thread, and handicrafts. The chief imports are crude oil, machinery, gems, fertilizers, and chemicals. India's major trade partners are the United States, China, the United Arab Emirates, Singapore, Great Britain, and Switzerland.

Sections in this article:

• Introduction
• India in the Late Twentieth Century
• Problems on India's Borders
• Independence and the India-Pakistan Split
• India Moves toward Independence
• India under British Rule
• The Arrival of the Europeans
• From the Indus Valley to the Fall of the Mughal Empire
• History
• Government
• Economy
• People and Culture
• Land
• Bibliography

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