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India vs. Nepal

Economy

IndiaNepal
Economy - overviewIndia'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 work force 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.

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 2016. 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. 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.

Growth rebounded in 2014 through 2016, exceeding 7% each year. 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. 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. Despite a high growth rate compared to the rest of the world, in 2015 and 2016, India’s government-owned banks faced mounting bad debt, resulting in low credit growth and restrained economic growth.

The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and 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.
Nepal is among the poorest and least developed countries in the world, with about one-quarter of its population living below the poverty line. Nepal is heavily dependent on remittances, which amount to as much as 30% of GDP. Agriculture is the mainstay of the economy, providing a livelihood for almost two-thirds of the population but accounting for only one-third of GDP. Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain.

Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of commercially feasible capacity. Nepal and India signed trade and investment agreements in 2014 that increase Nepal’s hydropower potential, but political uncertainty and a difficult business climate have hampered foreign investment.

Nepal was hit by massive earthquakes in early 2015, which damaged or destroyed infrastructure and homes and set back economic development. Political gridlock in the past several years and recent public protests, predominantly in the southern Tarai region, have hindered post-earthquake recovery and prevented much-needed economic reform. Additional challenges to Nepal's growth include its landlocked geographic location, persistent power shortages, and underdeveloped transportation infrastructure.
GDP (purchasing power parity)$8.721 trillion (2016 est.)
$8.103 trillion (2015 est.)
$7.534 trillion (2014 est.)
note: data are in 2016 dollars
$71.52 billion (2016 est.)
$71.12 billion (2015 est.)
$69.24 billion (2014 est.)
note: data are in 2016 dollars
GDP - real growth rate7.6% (2016 est.)
7.6% (2015 est.)
7.2% (2014 est.)
0.6% (2016 est.)
2.7% (2015 est.)
6% (2014 est.)
GDP - per capita (PPP)$6,700 (2016 est.)
$6,300 (2015 est.)
$5,900 (2014 est.)
note: data are in 2016 dollars
$2,500 (2016 est.)
$2,500 (2015 est.)
$2,500 (2014 est.)
note: data are in 2016 dollars
GDP - composition by sectoragriculture: 16.5%
industry: 29.8%
services: 45.4% (2016 est.)
agriculture: 32%
industry: 14%
services: 54% (FY 2016 est.)
Population below poverty line21.9% (2011 est.)
25.2% (2011 est.)
Household income or consumption by percentage sharelowest 10%: 3.6%
highest 10%: 29.8% (2011)
lowest 10%: 3.2%
highest 10%: 29.5% (2011)
Inflation rate (consumer prices)5.2% (2016 est.)
4.9% (2015 est.)
9.9% (FY 2016 est.)
7.2% (FY 2015 est.)
Labor force513.7 million (2016 est.)
15.6 million
note: severe lack of skilled labor (2014 est.)
Labor force - by occupationagriculture: 47%
industry: 22%
services: 31% (FY 2014 est.)
agriculture: 69%
industry: 12%
services: 19% (2014 est.)
Unemployment rate5% (FY 2016 est.)
4.9% (FY 2014 est.)
3.3% (2013 est.)
2.7% (2008 est.)
Distribution of family income - Gini index35.2 (2011)
37.8 (1997)
32.8 (2010)
47.2 (2008 est.)
Budgetrevenues: $273.3 billion
expenditures: $273.3 billion (FY 2016 est.)
revenues: $4.976 billion
expenditures: $5.596 billion (FY2016 est.)
Industriestextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals
tourism, carpets, textiles; small rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production
Industrial production growth rate7.4% (2016 est.)
-6.3% (2016 est.)
Agriculture - productsrice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fish
pulses, rice, corn, wheat, sugarcane, jute, root crops; milk, water buffalo meat
Exports$262.3 billion (FY 2016 est.)
$267.9 billion (2015 est.)
$604.7 million (FY2016 est.)
$866.5 million (FY2015 est.)
Exports - commoditiespetroleum products, precious stones, vehicles, machinery, iron and steel, chemicals, pharmaceutical products, cereals, apparel
clothing, pulses, carpets, textiles, juice, jute goods
Exports - partnersUS 15.2%, UAE 11.4%, Hong Kong 4.6% (1 January - 30 September 2016)
India 58.6%, US 10%, Germany 4% (1 January - 30 October 2016)
Imports$381 billion (FY2016 est.)
$394.1 billion (2015 est.)
$6.667 billion (FY2016 est.)
$7.886 billion (FY2015 est.)
Imports - commoditiescrude oil, precious stones, machinery, chemicals, fertilizer, plastics, iron and steel
petroleum products, machinery and equipment, gold, electrical goods, medicine
Imports - partnersChina 15.7%, Saudi Arabia 5.4%, Switzerland 5.4%, US 5.3%, UAE 5.2% (1 January - 30 September 2016)
India 61.5%, China 15.4% (1 January - 30 October 2016)
Debt - external$507 billion (31 December 2016 est.)
$480.8 billion (31 December 2015 est.)
$3.578 billion (FY 2016 est.)
$3.273 billion (FY 2015 est.)
Exchange ratesIndian rupees (INR) per US dollar -
68.3 (2016 est.)
64.152 (2015 est.)
64.152 (2014 est.)
61.03 (2013 est.)
53.44 (2012 est.)
Nepalese rupees (NPR) per US dollar -
108.8 (2016 est.)
102.41 (2015 est.)
102.41 (2014 est.)
99.53 (2013 est.)
85.2 (2012 est.)
Fiscal year1 April - 31 March
16 July - 15 July
Public debt52.3% of GDP (2016 est.)
52.4% of GDP (2015 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 intra-governmental debt; intra-governmental 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
27.6% of GDP (FY 2016 est.)
25.7% of GDP (FY 2015 est.)
Reserves of foreign exchange and gold$359.1 billion (31 December 2016 est.)
$351.6 billion (31 December 2015 est.)
$10.17 billion (30 October 2016 est.)
$8.88 billion (30 October 2015 est.)
Current Account Balance-$20.86 billion (2016 est.)
-$22.09 billion (2015 est.)
$1.339 billion (2016 est.)
$1.067 billion (2015 est.)
GDP (official exchange rate)$2.251 trillion (2016 est.)
$21.15 billion (2016 est.)
Stock of direct foreign investment - at home$453.2 billion (30 September 2016 est.)
$296.8 billion (31 December 2015 est.)
$103 million (31 July 2013 est.)
Stock of direct foreign investment - abroad$149 billion (31 December 2016 est.)
$139 billion (31 December 2015 est.)
$NA
Market value of publicly traded shares$1.516 trillion (31 December 2015 est.)
$1.558 trillion (31 December 2014 est.)
$1.139 trillion (31 December 2013 est.)
$14.03 billion (30 April 2016 est.)
$11.81 billion (31 October 2015 est.)
$9.574 billion (31 October 2014 est.)
Central bank discount rate6.25% (31 December 2016)
7.75% (31 December 2014)
note: this is the Indian central bank's policy rate - the repurchase rate
7% (30 October 2016)
7% (30 October 2015)
Commercial bank prime lending rate9.3% (31 December 2016 est.)
10.01% (31 December 2015 est.)
8.6% (30 October 2016 est.)
9.5% (30 October 2015 est.)
Stock of domestic credit$1.579 trillion (31 December 2016 est.)
$1.57 trillion (31 December 2015 est.)
$16.87 billion (30 October 2016 est.)
$14.36 billion (30 October 2015 est.)
Stock of narrow money$385.9 billion (31 December 2016 est.)
$370.5 billion (31 December 2015 est.)
$5.051 billion (30 October 2016 est.)
$4.348 billion (30 October 2015 est.)
Stock of broad money$1.728 trillion (31 December 2016 est.)
$1.704 trillion (31 December 2015 est.)
$22.16 billion (30 October 2016 est.)
$18.72 billion (30 October 2015 est.)
Taxes and other revenues12.1% of GDP (FY 2016 est.)
23.5% of GDP (FY2016 est.)
Budget surplus (+) or deficit (-)0% of GDP (FY 2016 est.)
-2.9% of GDP (FY2016 est.)
Unemployment, youth ages 15-24total: 10.7%
male: 10.4%
female: 11.6% (2012 est.)
total: 3.5%
male: 4.2%
female: 2.9% (2008 est.)
GDP - composition, by end usehousehold consumption: 60.8%
government consumption: 11.4%
investment in fixed capital: 27.6%
investment in inventories: 3%
exports of goods and services: 19%
imports of goods and services: -21.8% (2016 est.)
household consumption: 82%
government consumption: 10.9%
investment in fixed capital: 25%
investment in inventories: 8.9%
exports of goods and services: 10.7%
imports of goods and services: -37.5% (2016 est.)
Gross national saving30.2% of GDP (2016 est.)
31.3% of GDP (2015 est.)
32.8% of GDP (2014 est.)
42.9% of GDP (2016 est.)
43.9% of GDP (2015 est.)
45.7% of GDP (2014 est.)

Source: CIA Factbook