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India vs. Bhutan

Economy

IndiaBhutan
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 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. 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.

Growth rebounded in 2014 through 2016, exceeding 7% each year, but slowed in 2017. 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, India’s government-owned banks faced mounting bad debt in 2015 and 2016, 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.
Bhutan's small economy is based largely on hydropower, agriculture, and forestry, which provide the main livelihood for more than half of the population. Because rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive, industrial production is primarily of the cottage industry type. The economy is closely aligned with India's through strong trade and monetary links and is dependent on India for financial assistance and migrant laborers for development projects, especially for road construction. Bhutan inked a pact in December 2014 to expand duty-free trade with Bangladesh.

Multilateral development organizations administer most educational, social, and environment programs, and take into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment.

Bhutan’s largest export - hydropower to India - could spur sustainable growth in the coming years if Bhutan resolves chronic delays in construction. Bhutan’s hydropower exports comprise 40% of total exports and 25% of GDP. Bhutan currently taps only 6.5% of its 24,000-megawatt hydropower potential and is behind schedule in building 12 new hydropower dams with a combined capacity of 10,000 megawatts by 2020 in accordance with a deal signed in 2008 with India. The high volume of imported materials to build hydropower plants has expanded Bhutan's trade and current account deficits. Bhutan also is exploring energy exports to Bangladesh.
GDP (purchasing power parity)$9.447 trillion (2017 est.)
$8.852 trillion (2016 est.)
$8.265 trillion (2015 est.)
note: data are in 2017 dollars
$7.011 billion (2017 est.)
$6.621 billion (2016 est.)
$6.232 billion (2015 est.)
note: data are in 2017 dollars
GDP - real growth rate6.7% (2017 est.)
7.1% (2016 est.)
8% (2015 est.)
5.9% (2017 est.)
6.2% (2016 est.)
6.1% (2015 est.)
GDP - per capita (PPP)$7,200 (2017 est.)
$6,800 (2016 est.)
$6,400 (2015 est.)
note: data are in 2017 dollars
$8,700 (2017 est.)
$8,400 (2016 est.)
$8,000 (2015 est.)
note: data are in 2017 dollars
GDP - composition by sectoragriculture: 16.8%
industry: 28.9%
services: 46.6% (2017 est.)
agriculture: 15.7%
industry: 42.6%
services: 41.7% (2017 est.)
Population below poverty line21.9% (2011 est.)
13.3% (2012 est.)
Household income or consumption by percentage sharelowest 10%: 3.6%
highest 10%: 29.8% (2011)
lowest 10%: 2.8%
highest 10%: 30.6% (2012)
Inflation rate (consumer prices)3.8% (2017 est.)
4.5% (2016 est.)
3.5% (2017 est.)
3.9% (2016 est.)
Labor force521.9 million (2017 est.)
353,000
note: major shortage of skilled labor (2015 est.)
Labor force - by occupationagriculture: 47%
industry: 22%
services: 31% (FY 2014 est.)
agriculture: 58%
industry: 20%
services: 22% (2015 est.)
Unemployment rate8.8% (2017 est.)
8% (2016 est.)
3.2% (2017 est.)
3.2% (2016 est.)
Distribution of family income - Gini index35.2 (2011)
37.8 (1997)
38.8 (2012)
38.1 (2007)
Budgetrevenues: $248.7 billion
expenditures: $330.3 billion (2017 est.)
revenues: $692.6 million
expenditures: $818.8 million
note: the government of India finances nearly one-quarter of Bhutan's budget expenditures (2017 est.)
Industriestextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals
cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism
Industrial production growth rate7.5% (2017 est.)
8.9% (2017 est.)
Agriculture - productsrice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fish
rice, corn, root crops, citrus; dairy products, eggs
Exports$299.3 billion (2017 est.)
$268.6 billion (2016 est.)
$580 million (2017 est.)
$495.3 million (2016 est.)
Exports - commoditiespetroleum products, precious stones, vehicles, machinery, iron and steel, chemicals, pharmaceutical products, cereals, apparel
electricity (to India), ferrosilicon, cement, cardamom, calcium carbide, steel rods/bars, dolomite, gypsum
Exports - partnersUS 16%, UAE 11.7%, Hong Kong 5.1% (2016)
India 95.7% (2016)
Imports$426.8 billion (2017 est.)
$376.1 billion (2016 est.)
$1.1 billion (2017 est.)
$1.033 billion (2016 est.)
Imports - commoditiescrude oil, precious stones, machinery, chemicals, fertilizer, plastics, iron and steel
fuel and lubricants, airplanes, machinery and parts, rice, motor vehicles
Imports - partnersChina 17%, US 5.8%, UAE 5.4%, Saudi Arabia 5.2%, Switzerland 4.2% (2016)
India 91.1% (2016)
Debt - external$483.4 billion (31 December 2017 est.)
$456.4 billion (31 December 2016 est.)
$2.71 billion (31 December 2017 est.)
$2.355 billion (31 December 2016 est.)
Exchange ratesIndian rupees (INR) per US dollar -
65.17 (2017 est.)
67.195 (2016 est.)
67.195 (2015 est.)
64.152 (2014 est.)
61.03 (2013 est.)
ngultrum (BTN) per US dollar -
64.97 (2017 est.)
67.2 (2016 est.)
67.2 (2015 est.)
64.15 (2014 est.)
61.03 (2013 est.)
Fiscal year1 April - 31 March
1 July - 30 June
Public debt50.1% of GDP (2017 est.)
50.3% 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 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
93.7% of GDP (2017 est.)
106.8% of GDP (2016 est.)
Current Account Balance-$33.68 billion (2017 est.)
-$15.23 billion (2016 est.)
-$682 million (2017 est.)
-$618 million (2016 est.)
GDP (official exchange rate)$2.439 trillion (2016 est.)
$2.321 billion (2016 est.)
Stock of direct foreign investment - at home$367.5 billion (31 December 2017 est.)
$318.5 billion (31 December 2016 est.)
$185.5 million (31 December 2017 est.)
$168.4 million (31 December 2016 est.)
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.)
$355.3 million (31 December 2015)
$283.4 million (31 December 2012)
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
NA%
Commercial bank prime lending rate9.6% (31 December 2017 est.)
9.67% (31 December 2016 est.)
13.6% (31 December 2017 est.)
14.15% (31 December 2016 est.)
Stock of domestic credit$1.795 trillion (31 December 2017 est.)
$1.622 trillion (31 December 2016 est.)
$1.434 billion (31 December 2017 est.)
$1.17 billion (31 December 2016 est.)
Stock of narrow money$429.3 billion (31 December 2017 est.)
$294.4 billion (31 December 2016 est.)
$963.9 million (31 December 2017 est.)
$769 million (31 December 2016 est.)
Stock of broad money$2.063 trillion (31 December 2017 est.)
$1.773 trillion (31 December 2016 est.)
$1.69 billion (31 December 2017 est.)
$1.379 billion (31 December 2016 est.)
Taxes and other revenues10.2% of GDP (2017 est.)
29.8% of GDP (2017 est.)
Budget surplus (+) or deficit (-)-3.3% of GDP (2017 est.)
-5.4% of GDP (2017 est.)
Unemployment, youth ages 15-24total: 10.7%
male: 10.4%
female: 11.6% (2012 est.)
total: 10.7%
male: 8.2%
female: 12.7% (2015 est.)
GDP - composition, by end usehousehold consumption: 58.7%
government consumption: 11.6%
investment in fixed capital: 27.5%
investment in inventories: 4%
exports of goods and services: 18.4%
imports of goods and services: -20.2% (2017 est.)
household consumption: 50.1%
government consumption: 15.9%
investment in fixed capital: 49.4%
investment in inventories: 0%
exports of goods and services: 25.9%
imports of goods and services: -41.4% (2017 est.)
Gross national saving28.6% of GDP (2017 est.)
29.7% of GDP (2016 est.)
31.8% of GDP (2015 est.)
34.4% of GDP (2017 est.)
33.4% of GDP (2016 est.)
32% of GDP (2015 est.)

Source: CIA Factbook