India's Economy


As one of the largest countries in the world India has a thriving economy. But because of the many people that live in the country, its average income is still very low. In the first decades after becoming independent, India’s government controlled much of the economy, making it very difficult for foreign companies to invest freely. In the last two decades this has changed. India has chosen a more capitalist way to go.


Over half of India’s people get their income from farming. The most important products are corn, rice, sorghum and wheat.  Other products include tea, cotton, sugar cane and jute.

The Green Revolution in the 1960s made it possible for India to provide enough food for its population. New technology in farming, hybrid crops, the use of fertilizers, irrigation programs and more automation improved the quantity and quality of crops that farmers got from their land. India’s farms are small, mainly because they are split up among the children of a family when their father dies.

Cows are sacred animals in India and people respect them. As Hindus are not allowed to eat beef the south Asian country has almost a third of the world’s cattle. Cows can be seen roaming the streets almost everywhere. In many rural areas they are still used to plow the fields.




Industry and mining

India is one of the world’s biggest producers of iron ore and coal. As a result, the iron and steel industry is a basis for producing cars and other vehicles, ships and electrical goodsAlthough the textile industry is a traditional sector of the economy that the British built up, many clothes are still produced at home. 

Handicraft and hand-made jewelry are sources of income for millions of people.

The chemical industry is one of the fastest growing in India. Almost 13% of the country’s GDP comes from this part of the economy. It also caused the worst industrial accident in history. In 1984 a poisonous gas escaped from an American chemical plant in Bhopal, killing 20,000 people. A few years later the American company paid almost 500 million dollars to the victims and their families.


The service sector

In the last decades India has experienced a boom in the service sector. Today about half of the country’s money comes from it. India has a great reputation in the computer sector, producing millions of IT experts, who are welcomed all over the world because of their great skills. Software and computer technology from India have become very popular. Western companies hire these experts because they are cheaper than laborers at home.

In addition, India has become the world capital of call centers.  This service is very popular in the west, especially among British and American firms.Other expanding areas of the service sector include telecommunications and banking.



India’s state-owned railway system goes back to the British colonial government of the 19th century. The British exploited India’s raw materials and built a big network of railway lines to get them to the coast. Today, millions of people travel by train, one of the cheapest ways of travelling, and the only means of transport that poor people can afford.



Although the Indian government has built many new roads in the past, a large number of Indians are still are without cars. Especially in rural India people often walk long distances and use carts for transport.  Rickshaws are widespread in many Indian cities.




About 70% of India’s energy comes from burning fossil fuels. The country must import oil and gas to meet its energy demands. India also plans to increase the number of nuclear power stations, even though the Fukushima disaster has raised questions of the safety of nuclear energy. As the economy increases at a fast pace it is doubtful whether India’s electricity production can keep up.



Even though India has made large steps in economic growth, many problems remain unsolved. Growing bureaucracy, unemployment and corruption are only a few. In contrast to the days when many Indians left their country to work in the developed world, more and more are coming back to settle down hoping to achieve a better standard of living in their home country.



India - Table of Contents


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  • achieve = get
  • afford = to have enough money to buy something
  • although = while
  • automation = the use of computers and machines to do a simple job
  • average = normal, regular
  • basis = starting point
  • beef = meat from a cow
  • boom = increase in business
  • bureaucracy = administration
  • call center = an office where people answer customers questions  or sell things by using a telephone instead of meeting people in person
  • capitalist = when a country’s businesses and companies are controlled by private people
  • cart = a vehicle with two or four wheels and no roof; it is often pulled by a horse  and used for transporting things
  • cattle = cows
  • century = a hundred years
  • corruption = when a person does something illegally and takes money for it
  • cotton = cloth or thread made from the white hair of the cotton plant
  • crop = plant, like wheat, rice or corn that is grown by farmers to produce food
  • decade = a period of ten years
  • developed world = rich countries  
  • economy = the relationship between  production, trade and money in a country
  • escape = to get away from
  • especially = above all
  • expand = grow
  • experience = undergo
  • exploit = to use minerals and raw materials  for business and industry
  • fertilizer = a substance that is put into the soil to make plants grow
  • firm = company
  • foreign = from another country
  • fossil fuel = material, like coal, oil or gas that is used to produce energy; it was created by dead animals and plants millions of years ago
  • GDP = gross domestic product = total value of all the goods and services that a country produces in one year
  • goods = products
  • government = the people who rule a country
  • growth = increase, expansion
  • handicraft = activity , like making baskets , in which you use your hands to make objects that you can sell
  • hire = to give someone work for a short time
  • hybrid crop =  new plant that is produced  from two different types
  • improve = to make better
  • in addition  = also
  • in contrast to = compared with
  • income = the money that someone gets for the work they do
  • invest = to spend money in order to make a profit from it
  • iron ore =  rock or earth that has iron in it
  • irrigation = when water is brought to farming land because it is too dry
  • IT = information technology = the study of computers and how information gets from one place to another
  • jewelry = small things that you wear for decoration, like rings or necklaces
  • jute = thin threads from a plant  used to make rope and cloth
  • laborer = worker
  • means of transport = the way people and goods travel from one place to another
  • network = system
  • plant = factory
  • plow = to turn over the earth so that farmers can plant seeds
  • poisonous = containing a substance that can kill or hurt you
  • provide =  give
  • reputation = the opinion that people have or what they think about something
  • rickshaw =  small vehicle in southeast Asia, pulled by a bicycle or a person; it usually can carry one or two passengers
  • roam = wander around, without knowing where togo
  • rural= countryside
  • sacred = holy, religious
  • service sector = part of the economy that offers a service instead of producing something ; teachers, hospital workers, policemen etc... belong to the service sector
  • sorghum = seeds of a crop  grown in tropical countries
  • source = basis
  • split up = divide
  • state-owned = belonging to the government
  • steel =  strong metal that can be easily shaped; made out of iron
  • sugar cane = tall tropical plant with thick stems  from which sugar is made
  • thriving = booming, very successful
  • unemployment = when people are out of work
  • unsolved = without a result
  • vehicle = machine that is used to transport people and goods from one place to another
  • victim = here: person who was hurt in the accident
  • wheat = the grain that white bread is made from, or the plant that it grows on
  • widespread = very popular