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PART II: The Economic Analysis of the Country

Introduction

India was among the fastest-growing import markets between 2017 – 2018. The capital city of the Republic of India is New Delhi (formally called the National Capital Territory of Delhi), with over 29 million population. India has 35 cities and urban agglomerations. In 2018, India's GDP was recorded at $2.72T, which is experiencing a steady growth rate from 2008, and the quality was a staggering number of 127% in 2018 compared to the previous year. The total amount of product exports from India has a value of $326B. The accumulative amount of goods and services imported to India in the same year was calculated $492B, a $53B increase compared to 2013, giving the country's import per capita at $364. A study of OEC World ranked the economic complexity of India 45 (0.57) compared to other 137 nations and the most complex economy, according to the Economic Complexity Index (ECI). In 2018, India was granted the top economies in the world. A wide array of consumer goods made the country the number 11 trade destination globally (The Observatory of Economic Complexity, 2020). The majority of imports led by Crude Petroleum (20.6%) and the major import partners are China ($75.5B) and the United States ($31.6B). Total textile imported has been calculated at $8.44B, footwear and head ware had a total value of $1.15B.

Society:

India has one of the largest populations in the world. With an increasing population at an average rate of 1%, which consider a plunge compared to the previous rate, in 2018, the number of Indians passed over 1.35 billion people. The birth rate in 2020 was 18.2 birth/1,000 population, and the death rate was 7.2 deaths/1,000 population. An average life expectancy among Indians was 69.7 years. The age structure of Indian demographic 2020 was the following; 0-14 years composed 29% (male more than female), 15-64 years written 64% (male outweigh female), and over 65 female and male composed the remaining with the majority of female in this segment. The sex ratio, as already mentioned, is slightly male dominant, but roughly the rate is the same for both genders. The mortality rate in India has been decreasing (World Population by Country, 2020). The population growth has been experiencing the same trend. More than 50% of the population of the country included youth below 25 years old. It is expected that this trend makes an average of 29 years for Indian by 2030. The sex ratio is 944 females.

Demography:

Over two thousand ethnic groups exist in India. Four primary language families are representing those significant religious schools. Indo-European, Dravidian, Austroasiatic and Sino-Tibetan languages. Anglo-Indians composed 1,000,000 people in India, and Westerners from the United States living in India are 700,000, representing more than 0.1% of India's total population. India has 36 different states, and the distribution of population in Uttar Pradesh (16.5% of the total population), Maharashtra (9.28%), and Bihar (8.6%) has dwelled over 400 million citizens in total. The capital city of Delhi has 16 million population (1.39%). Another important city in the region is Punjab (27 million). The major cities based on the Urban population are Maharashtra, Uttar Pradesh, Tamil Nadu (34 million), West Bengal (29 million), and Gujarat (25 million). The vastest cities in the region are Rajasthan (342 thousand km2), Madhya Pradesh (308 thousand km2), and Maharashtra (307 thousand km2).

Education and Literacy:

India has a diverse range of religions, including Hinduism, Islam, Christianity, Sikhism, Buddhism, Jainism, and others. The main bulk of religious beliefs belongs to Hinduism, with 79% (the highest) Hindus of 1.2 billion religious Indians. The next on the list are Muslims, which is growing in number and is 15%. Characteristic of the main religious groups in terms of sex ratio, literacy, and work participation are the following; the growth rate of Islam was 24%, sex ration (the urban area was 941), sex ratio (child) 943, literacy at 68.5% (the lowest), and work participation of labour force is 32% (the lowest). Accordingly, for Hinduism, the sex ratio (urban area) is 921, sex ratio (child) is 913, and the literacy percentages were 74%, with the work participation of 41%. Christianity is the third major religion in India. The sex ratio in an urban area is 1046 (the highest), 84% literacy, and work participation of 41%. Buddhists' work participation is the highest among other religious groups at 43.1%. The minority group is Jainism with less than 1 percent but has the highest literacy rate by almost 94%.

Language:

Many Indians speak more than one language. The total number of languages and dialects census exceed more than 114 languages (22 of which are told by the majority) varied by source and counting method. Mother tongues or dialects are further categorizing census lists 216 spoken by 50,000 or more speakers. Eight hundred fifty languages are estimated to be used daily; the Government claims this number is more than 1,600 dialects. The most commonly spoken is Hindi, which is the official language in India. All the dialect is not mutually comprehensible. English also has official status. Widely using among business and politics, English acknowledgment varies from a few words to fluency. Union territories and most states are teaching Hindi and English. Twenty-two other languages are officially recognized by the political constitution and various educational and other institutions: Assamese, Oriya, Tamil, Punjabi, Sanskrit, Santhal, Sindhi, Bengali, Bodo, Kashmiri, Konkani, Manipuri, Marathi, Dogri, Gujarati, Maithili, Malayalam Hindi, Kannada Nepali, Telugu, and Urdu.

Ethnic Group:

Scholars estimated the exact number of ethnic groups depends on the source and method of counting. Only Africa exceeds the diversity of ethnicity of linguistic, cultural and genetic of India. 70% of the Indo-Aryan population composes, 20% are Dravidian, and the rest are Mongoloid and others. Subdividing each of these groups further in various languages changing, religion, and often caste. It is technically illegal to consider the Hindu caste system, but generally, more in rural areas, it is commonly practiced. Hindu caste system comprises four major categories (varnas), sub-categories (jatis), often found in specific regions, Sikh and Muslim communities. Among those, hereditary and occupational social hierarchies exist.

Health:

National health indicators showed dramatic improvement nationwide, although they are generally lower than in developing countries. Human Development Index, which is measuring income, education, and developmental health by the United Nations, is 0.647— which puts the country in the medium human development category (UNDP, 2019). Life expectancy and India's GNI per capita is increasing between 1990 and 2018. Education and HDI are slightly dropping within the last year. Trends are often comparing with Pakistan and Bangladesh. Gender Inequality or GII in India has a value of 0.501, ranking it 122 out of 162 countries in the 2018 index. Multidimensional Poverty Index (MPI). In India, 27.9 percent of the population accounts for 373,735 thousand multidimensionally poor people. 19.3 percent are classified as vulnerable to multidimensional poverty, which is counted at 258,002 thousand people. The breadth of deprivation or intensity experienced by people in India score in multifaceted poverty is 43.9 percent. MPIs of Bangladesh and Pakistan have 0.198 and 0.198, respectively.

Environment:

About one-third of the united states, India is the seventh-largest country in the world. Occupied by the subcontinent of South Asia, mainland India stretches eastward from Pakistan to Bangladesh in the west and Burma. North neighbours of India are China and Nepal, and Bhutan. The Indian Ocean on the south and the Arabian sea and Seri Lanka. Total land boundaries are 15,200 kilometres. The climate in India varied over the region. From permanently snow-capped Himalayas in the north to the tropical southern area. India is a four-season country. It is relatively cool and dry in December through February. It is hot and dry from March through May, predominating southwest winds from June to September brings monsoons rains and continues to October and November with retreating dry monsoons. Average temperatures range from 12.5 Centigrade to 30 Centigrade, which varies in the northwest than northeast 12.5C, south 22.5-30 C, and in the northeast 17.5C. Average annual 1,000 to 1,500 millimetres rainfall for much of the country, but lowest in the northeast and highest for the west coast.

The environmental factors about India are the vulnerability of nature. There are natural hazards, particularly various cyclones, and the annual monsoon that creates floods. Combinations of industrialization, poverty, increasing individual consumption, maldistribution of resources such as soil erosion, salinity and waterlogging. One other involving factor is civil conflict. They have taken arable land and forests, which is more occurred in northeastern and eastern states. However, water supply, by contrast, has not to link to any erosion. Political tension, international and national violent conflict as previously anticipated to the water distribution from Kaveri River surrounding actual population displacement by dam projects. The Time zone in India is under the same time zone, Greenwich Mean Time +5.5 hours.

Economic statistics and activity:

The economy in India is very diverse. It is encompassing traditional and modern farming, handicrafts and modern industries, and a multitude of services. Services account for more than two-thirds of India'sIndia's primary source of economic growth, but less than one-third of the labour force and slightly less than half of the workforce is in agriculture. The recent implication of the Modi administration and its government liberalization measures (privatization of state-owned enterprises, industrial deregulation, and reduced controls on foreign trade and investment) hugely impacted India's economy. Per capita income in Indian nevertheless remained below the world; it has capitalized on the educated English-speaking population to become primary outsourcing services and software workers for multinational businesses and exporter of information technology services.

Gross Domestic Product (GDP)/Power Purchasing Parity (PPP):

India's GDP is predicted to grow 8 percent a year between 2018 and 2022, and the economy being propelled by strong macroeconomics. India thrived for keeping its autarkic policies, yet develop into an open-market economy from 1997 to 2017. The countries growth accelerated at an average rate of 7% per year, which is higher than GDP growth for the European Union and the United States. GDP, purchasing power parity, in 2017, was estimated at $9.474 trillion, compared to $8.88 trillion in 2016 and $8.291 trillion in 2015 (India Brand Equity Foundation, 2019). GDP as an official exchange rate in 2017 was $2.602 trillion. The real growth rate was at 6.7% and GDP per capita (PPP) was $7,200 (2017), $6,800 (2016), and $6,500 (2015). Growth Nation Saving dropped by 1% in 2017 compared to the previous year at 28.8%. During the last two decades, the economy of India became more complex. In terms of ECI value, India after Thailand and China is the highest in the ranking. Most specialized products are spice seeds, organic compounds, granite, coconut and vegetable, processed hair, knotted carpets, non-retail pure cotton, and cotton waste. Median Household Income in India in 2020 was $3,168, which compile $616 median per-capita income.

Figure 1Monthly Trade-Data from UN Comtrade- United Nations International Trade Statistics Database-2018

Trade restrictions:

The highest tariff products belonged to Alcoholic liqueurs and fermented beverages (150%). Tarif 59: ASEAN India Free Trade Area (ASEAN) Association of Southeast Asian Nations. India-MERCOSUR Preferential Trade Agreement. Canada and India and the USA and India have Textile tariff values 9.94%, Foot ware and head ware 15% (Federal Research Division, 2015).

Distribution of wealth:

Marked differences in portfolio structures, India has more deposits (almost 60%) than securities and insurances. It is estimated that the top ten percent of the population held 77% of the whole national wealth. The wealthiest person in India has a net worth of about 47.3 billion US dollars. India has a low unemployment rate (5.36% in 2019), maintained throughout the 2000s. However, the youth unemployment rate, the workforce aged 15 to 24 years and without a job, has been hovering around the 22% mark, significantly higher the national unemployment rate. India is estimated to announce 70 new millionaires every day. There are more than 100 billionaires in India, their fortune fortunes increased by almost ten times over a decade. Each year 63 million Indians pushed to poverty due to healthcare costs. India has income inequality, the bottom 50% population lower than the total population, and the top 1% now owns more than 20% of the total income (Federal Research Division, 2015). Based on the 2020 level utilizing the nominal growth rate, 93% of Indian households earn less than $10,000 per year. Higher incomes are more likely to create a whole new class of consumers, according to the founder of Genesis Luxury, an Indian luxury retail conglomerate, Sanjay Kapoor: "We are moving on toward the 'gold collar' worker. It's a term that defines the well-paid, highly paid professionals who are happy to look good, happy to feel good, and are expanding the consumption of today."

Communication:

Telephone, Internet, radio, television and satellite diversified communications systems link all parts of India. With 1.1724 billion subscribers in 2019, India is the largest in the world after China by the number of fixed and mobile telephone uses. Also, the country has the lowest call-tariffs in the world. Telecommunication has narrowed down the rural-urban and supported the socioeconomic development of India. The world's second-largest Internet user-base with 661.94 as of 31 Dec 2019, belongs to India with million broadband internet subscribers in the country. 1.23 billion people have digital biometric cards, 43% of the total population has access to smartphones, and the internet shows 51 percent growth in e-commerce. India's internet economy was US$ 250 billion in 2020, backed primarily by E-commerce. E-commerce revenue is whooping from US$ 39 billion in 2017 to US$ 120 billion in 2020; this a growing annual rate of 51 percent, which is the highest in the world (Federal Research Division, 2015).

Foreign Investment:

According to the Department for Promotion of Industry and Internal Trade (DPIIT), during April 2000 and March 2020, Foreign Direct Investment (FDI) equity inflow in India stood at $ 469.99 billion. This is an indicator that the Government is improving the ease of doing business and relaxing FDI norms. In 2019-20 FDI $ 49.97 billion equity inflow indicates that the service sector attracted the highest FDI equity inflow of $ 7.85 billion. The attraction of investment by sectors followed by computer software and hardware at US$ 7.67 billion, trading at $ 4.57 billion, and the telecommunications sector at $ 4.44 billion. India received the maximum FDI equity inflow from Singapore, Mauritius, Netherlands, USA ($ 4.22 billion) and Japan. One of India's most important FDI deals with Saudi Aramco was in 2020. Some of the recent FDI announcements are as follows:

· August 21, 2020, the offering of mall developer Phoenix Mills Ltd was announced by the Government of Singapore investment of $ 63.84 million in the qualified institutional placement (QIP).

· On August 14, 2020, machine-learning-based log analytics and monitoring solution, Cora-Logix, Israel-based provider of announced a strategic expansion into India with a commitment to invest over $ 30 million in the next five years.

Retailers:

The retail industry of India is among the fastest-growing in the world. It is expected to reach up to $1.1 trillion by 2020. According to the World Bank’s Doing Business 2020, India ranked 63 and ranked 73 in the United Nations Conference on Trade and Development's Business-to-Consumer (B2C) E-commerce Index in 2019. In the same year, the direct selling industry was recorded sales of $ 2.47 billion (Bharti & Chancel, 2019). India is a global destination for retail, with the fifth largest and preferred retail with one of the highest per capita retail store availability. The exponential growth in the sector with retail development occurs in major cities and metro towns and tier II and II cities. Some of the factors involving India's retail market's growth are changing consumer tastes and preferences, healthy economic growth, changing demographic profile, increasing disposable income, and urbanization (Bharti & Chancel, 2019).

Several retailers:

The organized and unorganized Indian retail and logistics industry, in combination, employs about 40 million Indians, which is about 3.3% of the Indian population. Typically, Indian retail shops are small. Over 14 million outlets operate in the country. Online shopping absorbing popularity among Indians. 10.7 percent by 2024 versus 4.7 percent in 2019, for example, is the online penetration of. It is estimated to exceed sales of about $ 3.19 billion in 2020, which is a significant peak of 76 percent growth compared to 2019. India's E-commerce business is estimated to reach $ 99 billion by 2024.

Apparel Market:

The rise of the growing middle class and an increasingly strong manufacturing sector in India make it a focal point. Two other components helping to exaggerate the Indian market's importance are strong economic fundamentals and growing tech-savvy. Indeed, the Business of Fashion (BoF) of India was on the top 10 trends in Fashion ascent (Amed et al., 2019). India is expanding its middle class by 1.4 percent a year, outpacing China, Mexico, and Brazil. As a result, India is set to become one of the most attractive consumer markets from a sourcing hub. According to data from McKinsey’s FashionScope, it is expected that the Indian apparel market grows up to $59.3 billion in 2022, and it becomes the sixth-largest in the world. Within the next two years, it is expected that more than 300 international fashion brands open in India. However, with only 35 percent of sales accounting for formal retail, the apparel business is still unorganized (Amed et al., 2019).

Investment Opportunities:

The momentum around conventional stores, retailers are leveraging technology through online stores to enhance the in-store experience by digital marketing display and checkout. E-commerce is moving to lead solutions based on artificial intelligence. "Personalization and curation based on personal taste will become a lot more important," says the chief executive of Myntra, a fashion e-commerce with over 70% control over the market. With a robust supply side of the industry, the growth of the textile is almost guaranteed. According to a 2017 McKinsey survey, due to lower than China's labour cost, and compare to Vietnam, 41 percent of chief procurement officers tended to increase the share of their sourcing from India. Participation in the entire fashion value chain was made easy by using cotton, wool, silk, jute, and other raw materials. Inherent challenges are considered—mosaic climate and taste in the north, east, south, and west. Indian women kept many of the traditions and sensibility. Investors heed that the choices for the woman, which are almost 70% of sales in 2017. Low-quality Indian infrastructure challenges the logistic and stock inventory. Relaxed foreign direct investment regulations allow 100% foreign-owned single-brand retail operations (Amed et al., 2019).

Sources of information

Amed, I., Balchandani, A., Beltrami, M., Berg, A., Hedrich, S., & Rölkens, F. (2019, February 3). Trends in the fashion industry India | McKinsey. Www.Mckinsey.Com. https://www.mckinsey.com/industries/retail/our-insights/how-indias-ascent-could-change-the-fashion-industry#

Bharti, N., & Chancel, L. (2019). Tackling inequality in India Is the 2019 election campaign up to the challenge? WORLD INEQUALITY LAB.

https://wid.world/document/india2019/

Federal Research Division, L. of C. (2015). Country Profiles : Country Studies - Federal Research Division, Library of Congress. Loc.Gov.

https://www.loc.gov/rr/frd/cs/profiles.html

‌ Human Development Report, 2019. Human Development Report 2015 Work for human development Briefing note for countries on the 2015 Human Development Report. http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/IND.pdf

‌ India Brand Equity Foundation. (2019a). E-commerce in India: Industry Overview, Market Size & Growth| IBEF. Ibef.Org.

https://www.ibef.org/industry/ecommerce.aspx

‌ India Brand Equity Foundation. (2019b). FDI in India: Foreign Direct Investment Opportunities, Policy | IBEF. Ibef.Org.

https://www.ibef.org/economy/foreign-direct-investment.aspx

The Observatory of Economic Complexity. (2020, February 29). India (IND) Exports, Imports, and Trade Partners. OEC.World.

https://oec.world/en/profile/country/ind

World Population by Country. (2020, February 3). Median Income By Country 2020. Worldpopulationreview.Com.

https://worldpopulationreview.com/country-rankings/median-income-by-country

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