India business prospects remain bright for the foreseeable future. In fact, PricewaterhouseCoopers’ 2011 report, The World in 2050, projects an annualized average growth rate in GDP of 8% during the next four decades, making India potentially the world’s fastest-growing major economy until 2050. Driven by a rapidly growing working-age population, growth in the manufacturing sector (due to rising education and engineering skill levels), a large educated English-speaking population (facilitating export of IT services), and sustained growth of the consumer market (driven by a rapidly growing middle class), there is reason to support such optimism.
India’s diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of India’s labour force is in agriculture, while services are the major source of economic growth (accounting for more than half of its output, with only one-third of its work force). Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, and potatoes. Key industries include chemicals, textiles, jewelry, food processing, telecommunications, software, steel, autos, transport equipment, machinery, cement, mining, and oil.
Notwithstanding its rapid growth and diverse, open-market economy, India still faces several long-term challenges. Key issues (those that pose business risks and opportunities), include a worsening current account deficit, persistently high inflation, widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and the accommodation of rural-to-urban migration.