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Economy

Economy 2019

 

GDP - pr. capita (PPP)

 

USD 7,200 (2017 est., World Factbook)

 

Annual GDP growth

 

6.7 % (World Bank, 2017)

 

Foreign debt

 

USD 513 billion (World Bank, 2017, Current USD)

 

Trade balance

 

USD -77 billion (World Bank, 2017, Current USD)

 

Currency

 

Indian Rupee (INR)

 

Exchange rate

 

100 INR equals approx. 10.58 DKK (5 April 2019)

 

Corruption

India is ranked 78th (of 180 countries) on Transparency Internationals Corruption Perceptions Index (2018) with a score of 41. Denmark is ranked 1st with a score of 88.

 

Danish development programs

 

Denmark phased out its bilateral development aid to India in 2005, but it still supports NGO’s and international organisations in India.

 

Danish export, goods

India bought Danish goods for DKK 3.1 billion in 2017. It grew by 9.3 percent compared to 2016 export of goods.

(Danmarks Statistik, Table:sitc2r4y)

 

Danish export, services

India bought Danish services for DKK 7.7 billion in 2017. It increased by 22.8 percent compared to 2016.

(Danmarks Statistik, Table:UHTY)

 

Trade with Denmark

Denmark has a surplus on the Trade balance with India, where services is the key contributor. In 2017 it was DKK 0.2 billion (Commodities and Services). (Danmarks Statistik, Table:BB3)

 

Indo-Danish trade in different sectors

The biggest Danish export to India is within shipping with DKK 6.6 billion in 2017. Of exported goods medicine and pharmaceuticals made up DKK 734 million. India was Denmark's 34th biggest market for export of goods in 2017. The most important imported commodity from India to Denmark was clothing, textiles and accessories. (Danmarks Statistik, 2019)

Economic situation 
India’s economy is continuing to grow at a high rate. The economy experienced a slowdown in connection with the demonetization implemented by the Government in late 2016. Subsequently, the annual growth rate of the economy went from 7.1 percent in 2016 to 6.7 in 2017. However, the economy shows sign of recovery after the removal of the 500 and 1000-rupee notes. IMF estimates suggest that the economy grew 7.3 percent in 2018, and expect that the economy will grow at the same pace in the coming years.

The Reserve Bank of India (RBI) changed its policy stance in the beginning of February 2019 from ‘calibrated tightening’ to ‘neutral’, and reduced the key policy rate 25 bps from 6.50 to 6.25 percent, citing slower economic growth and sharply lower inflation. As of April 2019, the interest rate was lowered further to 6.00 percent due to slowing global growth and expected slowdown of domestic growth as well. In the recent years, inflation has been stable at around 4 to 4.5 percent (IMF, 2019).

India remains a source of growth and economic development. In the past 25 years India’s stock market has been among top three performing in the world, with an annualized total return on NIFTY 50 of 10.37 percent. Real pay increase on approximately five percent p.a. and a fast growing population secures a strong domestic demand.

While India is among the fastest growing countries in the world, it has to grow even faster to sustain its increasing labor supply. Recent numbers suggest the annual growth rate should be around the target 8-10 percent to employ the 12 million people entering the work force every year. As of 2017, the unemployment rate was 8.5 percent. The service industry, including the IT sector, has grown rapidly in recent years and make up for 61.5 percent of GDP. Second largest is the Indian industry amounting to 23 percent, and thirdly the agriculture constitutes 15.4 percent of the GDP as of 2016 (World Factbook). While two thirds of GDP is composed of the service industry, it only employs around a third of the labor force.

The government has passed important laws as a centralized goods and services tax (GST), which was subject to regional differences before. Furthermore, the ‘Make In India’ policy has raised foreign direct investment caps in some sectors and has created a more business-friendly environment, which also meant the level of foreign direct investment (FDI) grew 18.5 percent from 2016 to 2017.

The economic outlook for India looks promising. India has a young population, healthy savings and investment rates. However, long-term challenges to economic growth remain significant, including: Bureaucracy, lack of infrastructure, corruption and ineffective enforcement of intellectual property rights.

Last updated on April 2019