Gross Domestic Product growth and forecast
The Indian economy expanded 1.6 percent YoY in Q1 2021, improving from a revised 0.5 percent growth in Q4 of 2020 and beating the forecasts of one percent. It was the second consecutive quarter of growth since the country moved on from a pandemic-induced recession.
Irrespective of a second wave of COVID-19 as well as local lockdowns, in Q2 2021 the Indian economy expanded at a record 20.1 percent YoY – this was also due to the low base effect from the previous year with a record 24.4 percent slump when the coronavirus crisis challenged the economy.
India's economy expanded by 8.4 percent YoY in Q3 2021, matching market forecasts. This marked a fourth successive quarter of expansion, as coronavirus-related disruptions eased further, and economic activity rebounded due to a faster pace of vaccinations and a decrease in the number of coronavirus cases.
Factoring in higher oil prices and the ongoing COVID19 pandemic, the Asia Development Bank has forecast India’s GDP growth to be moderate at 7.5 percent in 2022-23, down from an estimated 8.9 percent in 2021-22, but is expected to reach eight percent in 2023-2024.
Foreign Direct Investment trends
India is expected to attract (US $100 billion) foreign direct investment (FDI) in 2022-23 on the back of economic reforms and ease of doing business in recent years, as reported by industry chamber
Foreign direct investment (FDI) into India reached new peaks in FY 2020-21, with total inward FDI at INR 6330.10 billion (US $81.72 billion), according to government estimates. Total FDI, inclusive of equity, capital, and re-invested earnings, rose 10 percent against the FDI received in the previous fiscal, at INR 5762.31 billion (US $74.39 billion).
According to the federal government, this increase in FDI inflow can be attributed to various facilitative measures and reforms undertaken by authorities to make India a preferred investment destination globally. Total FDI inflow into India grew at a compound annual growth rate (CAGR) of six percent between FY 2015-16 to FY 2019-20.
To promote FDI, the Government has put in place an investor-friendly policy, wherein most sectors except certain strategically important sectors are open for 100 per cent FDI under the automatic route. Further, the policy on FDI is reviewed on an ongoing basis, to ensure that India remains attractive and investor-friendly destination, the minister said.
India’s export statistics
India saw an increase in both exports and imports in 2021. After a pandemic-induced slowdown in 2020, India’s global trade picked up in 2021 with a 38.06 percent at INR 4591.10 billion (US $59.27 billion) increase in imports from the previous year.
Total exports from April to December 2021 rose to INR 23218.12 billion (US $299.74 billion), a 48.85 per cent increase YoY from INR 15598.29 billion (US $201.37 billion) for the same period in 2020.
In 2021, India increased its export of both finished goods as well as raw materials with industrial and agricultural raw materials, engineering products, as well as electronics contributing significantly to India’s exports.
In 2020, India was the world's biggest exporter of Diamonds (US$16 billion), Rice (US$8.21 billion), Crustaceans (US$3.95 billion), Non-Retail Pure Cotton Yarn (US$2.61 billion), and Pepper (US$1.16 billion).
India’s import statistics
In April 2022, India's imports increased by 30.97 percent year on year to INR 4674.02 billion (US$60.3 billion), owing primarily to increases in purchases of petroleum, crude, and products (87.54 percent), electronic goods (32.88 percent), and coal, coke, and briquettes (146.33 percent)
According to Trading Economics global macro models and analysts' expectations, imports in India are expected to reach INR 3875.64 billion (US $50.00 billion) by the end of Q2 2022. According to our econometric models, India Imports is expected to trend around INR 3371.81 billion (US $43.50 Billion) in 2023.
In 2020, India was the world's biggest importer of Coal Briquettes (US$20.9 billion), Diamonds (US$15.8 billion), Palm Oil (US$5.04 billion), Soybean Oil (US$3.02 billion), and Nitrogenous Fertilizers (US$2.64 billion)
The United States, China, and United Arab Emirates are India’s largest trade partners.