Home

India vs. Afghanistan

Economy

IndiaAfghanistan
Economy - overview

India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less than half of the workforce is in agriculture, but services are the major source of economic growth, accounting for nearly two-thirds of India's output but employing less than one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers. Nevertheless, per capita income remains below the world average. India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged nearly 7% per year from 1997 to 2017.

India's economic growth slowed in 2011 because of a decline in investment caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about slow world growth. Investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee. Growth rebounded in 2014 through 2016. Despite a high growth rate compared to the rest of the world, India's government-owned banks faced mounting bad debt, resulting in low credit growth. Rising macroeconomic imbalances in India and improving economic conditions in Western countries led investors to shift capital away from India, prompting a sharp depreciation of the rupee through 2016.

The economy slowed again in 2017, due to shocks of "demonetizaton" in 2016 and introduction of GST in 2017. Since the election, the government has passed an important goods and services tax bill and raised foreign direct investment caps in some sectors, but most economic reforms have focused on administrative and governance changes, largely because the ruling party remains a minority in India's upper house of Parliament, which must approve most bills.

India has a young population and corresponding low dependency ratio, healthy savings and investment rates, and is increasing integration into the global economy. However, long-term challenges remain significant, including: India's discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, high spending and poorly targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration.

Prior to 2001, Afghanistan was an extremely poor, landlocked, and foreign aid-dependent country. Increased domestic economic activity occurred following the US-led invasion, as well as significant international economic development assistance. This increased activity expanded access to water, electricity, sanitation, education, and health services, and fostered consistent growth in government revenues since 2014. While international security forces have been drawing down since 2012, with much higher U.S. forces' drawdowns occurring since 2017, economic progress continues, albeit uneven across sectors and key economic indicators. After recovering from the 2018 drought and growing 3.9% in 2019, political instability, expiring international financial commitments, and the COVID-19 pandemic have wrought significant adversity on the Afghan economy, with a projected 5% contraction.

Current political parties' power-sharing agreement following the September 2019 presidential elections as well as ongoing Taliban attacks and peace talks have led to Afghan economic instability. This instability, coupled with expiring international grant and assistance, endangers recent fiscal gains and has led to more internally displaced persons. In November 2020, Afghanistan secured $12 billion in additional international aid for 2021-2025, much of which is conditional upon Taliban peace progress. Additionally, Afghanistan continues to experience influxes of repatriating Afghanis, mostly from Iran, significantly straining economic and security institutions.

Afghanistan's trade deficit remains at approximately 31% of GDP and is highly dependent on financing through grants and aid. While Afghan agricultural growth remains consistent, recent industrial and services growth have been enormously impacted by COVID-19 lockdowns and trade cessations. While trade with the People's Republic of China has rapidly expanded in recent years, Afghanistan still relies heavily upon India and Pakistan as export partners but is more diverse in its import partners. Furthermore, Afghanistan still struggles to effectively enforce business contracts, facilitate easy tax collection, and enable greater international trade for domestic enterprises.

Current Afghan priorities focus on the following goals:

  • Securing international economic agreements, many of which are contingent on Taliban peace progress;
  • Increasing exports to $2 billion USD by 2023;
  • Continuing to expand government revenue collection;
  • Countering corruption and navigating challenges from the power-sharing agreement; and
  • Developing a strong private sector that can empower the economy.

GDP (purchasing power parity)$9,155,083,000,000 (2019 est.)

$8,787,694,000,000 (2018 est.)

$8,280,935,000,000 (2017 est.)

note: data are in 2010 dollars
$78.557 billion (2019 est.)

$75.6 billion (2018 est.)

$74.711 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate4.86% (2019 est.)

6.78% (2018 est.)

6.55% (2017 est.)
2.7% (2017 est.)

2.2% (2016 est.)

1% (2015 est.)
GDP - per capita (PPP)$6,700 (2019 est.)

$6,497 (2018 est.)

$6,186 (2017 est.)

note: data are in 2010 dollars
$2,065 (2019 est.)

$2,034 (2018 est.)

$2,058 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 15.4% (2016 est.)

industry: 23% (2016 est.)

services: 61.5% (2016 est.)
agriculture: 23% (2016 est.)

industry: 21.1% (2016 est.)

services: 55.9% (2016 est.)

note: data exclude opium production
Population below poverty line21.9% (2011 est.)54.5% (2016 est.)
Household income or consumption by percentage sharelowest 10%: 3.6%

highest 10%: 29.8% (2011)
lowest 10%: 3.8%

highest 10%: 24% (2008)
Inflation rate (consumer prices)3.7% (2019 est.)

3.9% (2018 est.)

3.3% (2017 est.)
5% (2017 est.)

4.4% (2016 est.)
Labor force521.9 million (2017 est.)8.478 million (2017 est.)
Labor force - by occupationagriculture: 47%

industry: 22%

services: 31% (FY 2014 est.)
agriculture: 44.3%

industry: 18.1%

services: 37.6% (2017 est.)
Unemployment rate8.5% (2017 est.)

8.5% (2016 est.)
23.9% (2017 est.)

22.6% (2016 est.)
Distribution of family income - Gini index35.7 (2011 est.)

37.8 (1997)
29.4 (2008)
Budgetrevenues: 238.2 billion (2017 est.)

expenditures: 329 billion (2017 est.)
revenues: 2.276 billion (2017 est.)

expenditures: 5.328 billion (2017 est.)
Industriestextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticalssmall-scale production of bricks, textiles, soap, furniture, shoes, fertilizer, apparel, food products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copper
Industrial production growth rate5.5% (2017 est.)-1.9% (2016 est.)
Agriculture - productssugar cane, rice, wheat, buffalo milk, milk, potatoes, vegetables, bananas, maize, mangoes/guavaswheat, milk, grapes, vegetables, potatoes, watermelons, melons, rice, onions, apples
Exports$572.073 billion (2019 est.)

$564.165 billion (2018 est.)

$509.661 billion (2017 est.)
$784 million (2017 est.)

$614.2 million (2016 est.)

note: not including illicit exports or reexports
Exports - commoditiesrefined petroleum, diamonds, packaged medicines, jewelry, cars (2019)gold, grapes, opium, fruits and nuts, insect resins, cotton, handwoven carpets, soapstone, scrap metal (2019)
Exports - partnersUnited States 17%, United Arab Emirates 9%, China 5% (2019)United Arab Emirates 45%, Pakistan 24%, India 22%, China 1% (2019)
Imports$624.314 billion (2019 est.)

$656.529 billion (2018 est.)

$575.121 billion (2017 est.)
$7.616 billion (2017 est.)

$6.16 billion (2016 est.)
Imports - commoditiescrude petroleum, gold, coal, diamonds, natural gas (2019)wheat flours, broadcasting equipment, refined petroleum, rolled tobacco, aircraft parts, synthetic fabrics (2019)
Imports - partnersChina 15%, United States 7%, United Arab Emirates 6%, Saudi Arabia 5% (2019)United Arab Emirates 23%, Pakistan 17%, India 13%, China 9%, United States 9%, Uzbekistan 7%, Kazakhstan 6% (2019)
Debt - external$555.388 billion (2019 est.)

$518.34 billion (2018 est.)
$284 million (FY10/11)
Exchange ratesIndian rupees (INR) per US dollar -

73.565 (2020 est.)

71.05 (2019 est.)

70.7675 (2018 est.)

64.152 (2014 est.)

61.03 (2013 est.)
afghanis (AFA) per US dollar -

7.87 (2017 est.)

68.03 (2016 est.)

67.87 (2015)

61.14 (2014 est.)

57.25 (2013 est.)
Fiscal year1 April - 31 March21 December - 20 December
Public debt71.2% of GDP (2017 est.)

69.5% of GDP (2016 est.)

note: data cover central government debt, and exclude debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
7% of GDP (2017 est.)

7.8% of GDP (2016 est.)
Reserves of foreign exchange and gold$409.8 billion (31 December 2017 est.)

$359.7 billion (31 December 2016 est.)
$7.187 billion (31 December 2017 est.)

$6.901 billion (31 December 2015 est.)
Current Account Balance-$29.748 billion (2019 est.)

-$65.939 billion (2018 est.)
$1.014 billion (2017 est.)

$1.409 billion (2016 est.)
GDP (official exchange rate)$2,835,927,000,000 (2019 est.)$20.24 billion (2017 est.)
Ease of Doing Business Index scoresOverall score: 71 (2020)

Starting a Business score: 81.6 (2020)

Trading score: 82.5 (2020)

Enforcement score: 41.2 (2020)
Overall score: 44.1 (2020)

Starting a Business score: 92 (2020)

Trading score: 30.6 (2020)

Enforcement score: 31.8 (2020)
Taxes and other revenues9.2% (of GDP) (2017 est.)11.2% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-3.5% (of GDP) (2017 est.)-15.1% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 22.3%

male: 21.9%

female: 23.8% (2019 est.)
total: 17.6%

male: 16.3%

female: 21.4% (2017)
GDP - composition, by end usehousehold consumption: 59.1% (2017 est.)

government consumption: 11.5% (2017 est.)

investment in fixed capital: 28.5% (2017 est.)

investment in inventories: 3.9% (2017 est.)

exports of goods and services: 19.1% (2017 est.)

imports of goods and services: -22% (2017 est.)
household consumption: 81.6% (2016 est.)

government consumption: 12% (2016 est.)

investment in fixed capital: 17.2% (2016 est.)

investment in inventories: 30% (2016 est.)

exports of goods and services: 6.7% (2016 est.)

imports of goods and services: -47.6% (2016 est.)
Gross national saving29.1% of GDP (2019 est.)

31.1% of GDP (2018 est.)

31.4% of GDP (2017 est.)
22.7% of GDP (2017 est.)

25.8% of GDP (2016 est.)

21.4% of GDP (2015 est.)

Source: CIA Factbook