Summary

India has seen significant improvement in its economy over the past decade, recovering from a sluggish economy with high inflation and dwindling foreign investment. This has largely been thanks to increases in technology use, increases in complex manufacturing, and increases in exports. India has been one of the fastest growing economies in recent years and in 2023 was the fastest growing major economy. India currently has a very similar sized population to China; however, its economy is still much smaller with much more room for growth. 

Economy and GDP

The Indian Government has enacted numerous economic growth initiatives in recent years. Some of which are: revitalisation of railway stations, a carbon credit trading scheme, a pharmaceuticals production linked incentive scheme, and a foreign trade policy. India’s growth is expected to stabilise to a more sustainable growth rate over the coming years. But it is still forecast to remain growing at world leading rates. Many economic commentators have offered their thoughts on how to generate more growth in India’s economy with significant room for even more improvement. Of note, India’s share of world GDP is just 7% whilst its population makes up 17% of the global population. This makes its productivity low compared to other nations of similar size, such as China which contributes about 18% of the world GDP with a very similar population size. Growth in national productivity has the potential to generate significant additional economic growth for India. 

For further information on India’s economy, see the resources below:

Articles:

1. Chapter 1. The Macro Story – An India Economic Strategy To 2035 – Department of Foreign Affairs and Trade (dfat.gov.au)
2. India Economic Snapshot – OECD
3. India's economic triumph: A chronicle of the fastest-growing major economy - The Economic Times (indiatimes.com)
4. India’s Economy in 2023: A Year-End Review (india-briefing.com)
5. India Economic Outlook, January 2024 – Deloitte Insights

Videos:

1. Will India become an economic superpower? | Business Beyond (youtube.com)
2. Will India's Economy Grow Stronger than China? | Explaining India's Fastest Growing Big Economy? (youtube.com)
3. The Problem With Indian Economy | Indian Economy | Econ – YouTube

Trade with Australia

India and Australia signed an Economic Co-operation and Trade Agreement (ECTA) at the end of 2022. This made more than 85% of Australian goods exports to India free from export tariffs. 96% of Indian imports also became tariff free. Australia and India are now under negotiation to establish a Comprehensive Economic Co-operation Agreement (CECA) which will build on ECTA outcomes and further strengthen Indian-Australian trade ties. 

India’s top export destinations are the United States, the United Arab Emirates, and the Netherlands. Their top import sources are China, the United Arab Emirates, and the United States. Australia’s top exports to India include coal, education related travel, and gold. Australia’s top imports from India include refined petroleum, recreational travel, and telecom and ICT services. Australia’s largest service export to India is education. As of August 2023, there were around 150,000 Indian students enrolled with Australian education providers. Australia is India’s 17th largest export partner and 10th largest import partner. 

For further information on India’s trade with Australia, see the resources below:

Articles:

1. Australia-India Economic Cooperation and Trade Agreement (ECTA) | Australian Government Department of Foreign Affairs and Trade (dfat.gov.au)
2. Australia-India Comprehensive Economic Cooperation Agreement (CECA) | Australian Government Department of Foreign Affairs and Trade (dfat.gov.au)
3. Trade deal with India delivers from 29 December | Minister for Trade and Tourism (trademinister.gov.au)
4. India-Australia Trade Information Sheet – DFAT

Videos:

1. India-Australia trade agreement to help bilateral trade cross $45-50 billion | International News (youtube.com)
2. Stronger trade between Australia and India welcomed inside resources sector (youtube.com)