India Economic Sectors

Of the economic sectors, the service industries and industry are the most important. They generate 49.1% and 26.8% of the gross domestic product (GDP), respectively. The agriculture contributes only 14.6%. It is striking that the share of both industry and agriculture has been declining for many years, while that of services has been increasing steadily. Nonetheless, 43.2% of the workforce is employed in agriculture, but only 31.9% in the service sector and 24.9% in industry. The majority of Indians still live in the countryside (around two thirds of the population). Economic growth has hardly created any new jobs, and that with a growing young population. According to Modi, India needs 12 million new jobs every year.

GDP: $ 2.7 trillion (2018, estimated)

Per capita income (purchasing power parity): $ 7,056 (2017, estimated)

Human Development Rank (HDI): Rank 129 of 189 (2018)

Proportion of poverty (less than $ 1.90 PPP per day): 21.2% (2011)

Distribution of income (Gini coefficient): 35.20 (2011)

Economic Transformation Index (BTI): Rank 48 (of 137) (2020)

Foreign trade

According to, India is a member of important international business associations, including BIMSTEC, BRICS, ESCAP

Petroleum and petroleum products, textiles and clothing, chemical products and food are among India’s most important export goods. Computers, high-tech machines and systems, aircraft and military equipment are also produced in India. In addition to some of the products already mentioned for export, important import goods also include electronic goods and those belonging to the “building materials, glass, ceramics” sector.

Germany is India’s most important trading partner within the EU and ranks 8th (supplier) and 5th (buyer) worldwide. The bilateral trade volume in 2019 was around 21 billion euros. However, exports only correspond to 1% of total German exports.

In May 2017 and November 2019, the fourth and fifth German-Indian government consultations took place in Berlin and New Delhi. Numerous bilateral agreements were reached in areas such as energy, economy, vocational training, culture and science, security and agriculture.

India Foreign trade

Human Resources

India’s population is very young, with an average age of less than 23, and thus potentially dynamic. However, in order to be able to play a positive role in the future development of the country, professional qualifications are required. Many companies are desperately looking for qualified personnel. But that’s tight and accordingly picky. In 2015, Modi launched a new vocational training initiative called ” Skill India “, which aims to qualify 400 million people for various areas by 2022.

Energy and natural resources

India has many natural resources. Mainly coal (hard coal and lignite) and crude oil are required as energy carriers for consumption and production. Hard coal is mined by a state company and often falls far short of the target. Because of the poor quality, the local coal cannot be used for all applications (e.g. steel production), so India has to import coal.

India also produces crude oil in modest quantities and exclusively for its own use. However, in order to meet demand, India has to import oil on a large scale. The country is already the third largest oil importer in the world (as of 2018). As prosperity increases, so does consumption and energy consumption in India. Although around 16% of the population in India still has no electricity supply, India is already the third largest energy consumer worldwide after China and the USA (as of 2017), and in terms of CO² emissions it ranks fourth.

Currently, around 71% of India’s electricity is generated from fossil energy, 12% from hydropower, 16% from other renewable energies and 2% from nuclear energy (as of 2017). In the coming years India will have to expand its energy supply if it wants to drive economic development further. In order to achieve the targeted doubling of capacities, more investments must be made in renewable energies. In addition to wind power, which has dominated up to now, solar energy and hydropower plants will be the main focus. Despite the nuclear disaster in Japan and climate change, India is increasingly relying on nuclear energy and coal-fired power plants to satisfy the hunger for energy.There are currently 22 nuclear power plants in the country, 14 more are currently being planned or are already in an advanced phase of construction.

Labour market

According to the latest figures from the (not freely available) India Employment Report 2016, around 6 to 8 million young people will flock to the labor market every year over the next 15 years, for whom new and good jobs will have to be provided. One of the fundamental problems of economic development in India is that it is highly capital-intensive, meaning that relatively fewer new jobs are created with increasing growth. One speaks here of a “jobless growth”. In general, only a maximum of 7% of the approximately 500 million people in employment are employed in the so-called “organized sector”, which also includes the entire state administration, the other 93% in insecure employment in the informal sector. The vast majority of the working population literally live from hand to mouth under precarious circumstances and are vulnerable to the ups and downs of the economy. The shows the dramatic consequences this addiction can have for those affected current corona epidemic, from which India has not been spared either.

While the annual growth rate of the employed between 1983 and 2000 was 1.9 percent, between 2000 and 2012 it was only 1.5 percent. One of the reasons for this is that the structure of the labor market has not fundamentally changed. 43.7 percent of those in employment still work in agriculture, compared with only 17.3% in the industrial and 25.7% in the service sector.

Despite the large-scale marketing offensive and the tireless advertising tour by Prime Minister Modi as part of the “Make in India” campaign, hardly any new jobs have been created so far, even significantly fewer than under the previous government. According to the latest official figures for 2015, there were just 100,000 new jobs for the entire year (for the approx. 12 million people who pour into the labor market each year). Manufacturing jobs are unlikely to create many jobs, despite the low labor costs and the large workforce available. It is more likely that this work will be increasingly automated and therefore not very labor-intensive.