The Economy of India 2022: Learn how much India Imported, Exported, and Received FDI

India passed the United Kingdom to take over as the fifth-largest economy in the world. Today, the only countries with economies larger than India’s are the United States, China, Japan, and Germany. It is a significant accomplishment to surpass one of the largest economies in the world, particularly one that dominated the Indian subcontinent for two centuries.

In “nominal” monetary terms, the Indian economy was worth USD 854.7 billion in the three months ending in March 2022, compared to USD 816 billion for the UK. India has emerged as the largest economy with the highest rate of growth in the world and is anticipated to rank among the top three economic powers in the next 10 to 15 years.

Here are the factors that characterized and shaped the Indian economy this year, with just a few days left in the year 2022.

GDP growth rate  

As growth for Q2 was 6.3%, the most recent GDP growth figures for the September quarter again aroused questions. Even though the RBI forecast a 6.8% GDP increase in its most recent monetary policy announcement, worries over the GDP persisted. Although GDP growth was only 4.1% at the beginning of the year, it jumped to more than 13% in the June quarter, providing some relief.

High Inflation

One of the key elements that damaged the Indian economy this year was inflation. After the RBI increased the repo rates multiple times since April, retail inflation as measured by the Consumer Price Index (CPI) in the nation fell to an 11-month low of 5.88% in November 2022.

Concern increased as a result of the RBI’s repeated rate hikes failing to reduce inflation for a few months. The acceptable inflation rate is 6 percent; nevertheless, the cap was crossed in January, and it jumped to 7.79 percent in April.

Imports and Exports

Due to India’s active policy drive and significant infrastructure investment, exports and imports have increased recently. The United States (US), which surpassed China to become India’s greatest trading partner in the previous fiscal year, is one of India’s top trading partners, according to the Import Export Data.

UAE has also emerged as one of India’s major trading partners thanks to the growing oil trade. In FY 2022, India’s exports of products reached a record high of US$ 417.81 billion, up 43.18 percent from US$291.18 billion in FY 2021. During the same period, India’s imports of goods increased to US$610.22 billion, a 54.71% increase over the US$394.44 billion total from FY 2021.

The entire export from India between June and October 2022 decreased by more than 25%, marking a dramatic decline in the country’s exports this year. But in November, the figures saw a very modest increase. Likewise, India experienced a decline in imports.

FDI-Foreign Direct Investment

Total FDI inflows into the nation was $ 16.6 billion from July to September of FY 2022, and total FDI equity inflows were $ 10.3 billion. In terms of FDI equity inflows into India during the fiscal years 2021–22, Singapore (27.01%), the USA (17.94%), Mauritius (15.98%), the Netherlands (7.86%), and Switzerland (7.31%) emerge as the top 5 nations.

The government said on September 24, 2022 that due to economic changes and the country’s business-friendliness, India is on track to bring in $100 billion in FDI for the current fiscal year. The nation experienced the “largest ever” foreign inflows in 2021–2022, totaling $83.6 billion.

The government has implemented a liberal and open policy that makes the majority of industries available to FDI via the automatic route in an effort to entice foreign investment. In order to decrease unnecessary compliance load, save costs, and improve the ease of doing business in India, reform efforts include liberalizing norms and laws.

Despite all of these issues, the credibility of fiscal policy openness has increased overall. The platforms have been widened to include investing in government securities. According to a World Bank report, additional advantages can be anticipated from the reforms that will be implemented soon.