Where India’s economy is placed in the world



India’s economy

According to International Monetary Fund (or IMF) data, India is the tenth largest economy in the world. It’s gross domestic product (or GDP) was $1.876 trillion in fiscal year 2013–2014. It’s important to note that a fiscal year in India begins in April and ends in March of the following year. As a result, the reading above is for the period from April 2013 until March 2014.

GDP at factor cost

In terms of purchasing power parity (or PPP), India’s GDP is the third largest in the world. It’s GDP was $6.776 trillion in 2013. It’s behind the US and China, respectively. The PPP concept helps estimate the level of the exchange rate between two currencies. The rate is at par with the purchasing power of the currencies for the countries under analysis.

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Using the PPP method is different from using exchange rates when comparing countries’ GDP. It considers the relative costs of production. It also considers the inflation rates of the two countries. For example, when comparing economies in different growth levels—like the US and India—PPP takes into account the differences in income levels and existing cost levels. These differences aren’t considered by the exchange rates in question—the dollar and the rupee, respectively.

India’s position among BRICS

Among the Brazil, Russia, India, China, and South Africa (or BRICS) nations, India’s economy grew at the second fastest pace behind China. India had 4.7% growth in fiscal year 2013–2014. Although this is far from the ~9% growth rate that it clocked in 2007 and 2010, it isn’t too bad. The entire world economy has been depressed for over half a decade.

Exchange-traded funds (or ETFs) that invest across the BRICS nations include the Vanguard FTSE Emerging Markets ETF (VWO), the iShares MSCI Emerging Markets Index Fund (EEM), the iShares Core MSCI Emerging Markets ETF (IEMG), the iShares MSCI Emerging Markets Minimum Volatility Index Fund (EEMV), and the Schwab Emerging Markets Equity ETF (SCHE).

Before we discuss how GDP and its growth fared in India, we’ll discuss what GDP is in more detail.


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