Economic Indicators and India's GDP, FDI, and Trade Trends

As per the economic survey 2022-23, India’s real gross domestic product (GDP) growth is expected to remain robust in FY23 at seven percent. Further, the country should register GDP growth in the range of 6-6.8 percent in FY24, depending on global headwinds.

The economic survey projects a baseline GDP growth of 6.5 percent in real terms and 11 percent in nominal terms in FY24. The survey states: “despite strong global headwinds and tighter domestic monetary policy, a robust growth forecast for India in the range of 6.5 to seven percent is a reflection of India’s underlying economic resilience; of its ability to recoup, renew and re-energize the growth drivers of the economy.”

 Growth in credit lending to the MSME sector (medium, small, and micro enterprises) has been the responsible for boosting growth. During the period between January to November 2022, credit lending to MSMEs averaged 30.5 percent.

India’s Foreign Trade Policy (FTP) with effect from April 1, 2023, will not have a five-year target date. The goal is to reach US$2 trillion exports by 2030 by shifting from an incentive to remission and entitlement-based regime.

India has witnessed steady growth in its domestic market over the last decade, leading to a rise in foreign direct investment (FDI) and prioritizing the establishment of the fundamental blocks necessary for long-term and viable economic development. Additionally, India has improved its rankings in the global innovation index and the ease of doing business index, indicating a positive outlook for further economic expansion. Moreover, India’s domestic market has been growing steadily, providing a solid foundation for further economic expansion.

India received the highest annual FDI inflows of $84,835 million in FY 21-22 overtaking last year’s FDI by $2.87 billion. Also, FDI equity inflow in FY 2021-22 were $ 59,825 million.

FDI Equity inflow in manufacturing sectors have increased by 76% in FY 2021-22 ($ 21.34 bn) compared to previous FY 2020-21 ($ 12.09 billion). 

Total FDI inflows in the country in the FY 2022 (April - December) is $ 55.27 billion and total FDI equity inflows stands at $ 36.74 Billion.

Singapore (27.01%), USA (17.94%), Mauritius (15.98%), Netherland (7.86%) and Switzerland (7.31%) emerge as top 5 countries for FDI equity inflows into India FY 2021-22.

Top 5 sectors receiving highest FDI Equity Inflow during FY 2021-22 are Computer Software & Hardware (24.60%), Services Sector (Fin., Banking, Insurance, Non Fin/Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other) (12.13%), Automobile Industry (11.89%), Trading 7.72% and Construction (Infrastructure) Activities (5.52%).

Top 5 States receiving highest FDI Equity Inflow during FY 2021-22 are Karnataka (37.55%), Maharashtra (26.26%), Delhi (13.93%), Tamil Nadu (5.10%) and Haryana (4.76%)

India is projected to achieve a total export figure of US$760 billion by the end of FY 2022-23, up from US$676 billion recorded in FY 2021-22.

In FY 2022, the total value of goods and services exports for India had reached a high of US$422 billion and US$254 billion, respectively. As of March 28, 2023, India’s Commerce Minister, Piyush Goyal announced that Indian exports had crossed the US$750 billion mark - a phenomenal 35 percent increase from US$500 billion recorded in financial year (FY) 2020–2021.

India’s trade statistics have amplified exponentially in the recent years, with financial year 2021-22 (FY 2022) recording the highest ever value of merchandise exports. The government is buoyant about hitting the US$500 billion export target in FY 2023 through rupee-denominated trade and various recent bilateral free trade agreements (FTAs), such as those signed with the United Arab Emirates (UAE) and Australia. 

In FY 2022, merchandise exports from India reached a new high at US$417.81 billion, marking a surge of 43.18 percent over the US$291.18 billion recorded in FY 2021. During the same period, India’s merchandise imports soared to US$610.22 billion, an increase of 54.71 percent over the U$394.44 billion registered during FY 2021.

The top exports of India are engineering goods, gems and jewelry, petroleum products, drugs and pharmaceuticals, organic chemicals, electronic goods, etc.

India’s import basket primarily comprises petroleum and crude products, electronic goods, gold, machinery and electrical appliances, pearls, stones and semi-precious metals, transport equipment, etc.