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India vs. Nepal

Economy

IndiaNepal
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.

Nepal is among the 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 less than a 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 has signed trade and investment agreements with India, China, and other countries, but political uncertainty and a difficult business climate have hampered foreign investment. The United States and Nepal signed a $500 million Millennium Challenge Corporation Compact in September 2017 which will expand Nepal's electricity infrastructure and help maintain transportation infrastructure.

Massive earthquakes struck Nepal in early 2015, which damaged or destroyed infrastructure and homes and set back economic development. Although political gridlock and lack of capacity have hindered post-earthquake recovery, government-led reconstruction efforts have progressively picked up speed, although many hard hit areas still have seen little assistance. Additional challenges to Nepal's growth include its landlocked geographic location, inconsistent electricity supply, and underdeveloped transportation infrastructure.

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
$97.749 billion (2019 est.)

$91.362 billion (2018 est.)

$85.624 billion (2017 est.)

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

6.78% (2018 est.)

6.55% (2017 est.)
7.9% (2017 est.)

0.6% (2016 est.)

3.3% (2015 est.)
GDP - per capita (PPP)$6,700 (2019 est.)

$6,497 (2018 est.)

$6,186 (2017 est.)

note: data are in 2010 dollars
$3,417 (2019 est.)

$3,253 (2018 est.)

$3,099 (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: 27% (2017 est.)

industry: 13.5% (2017 est.)

services: 59.5% (2017 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)3.7% (2019 est.)

3.9% (2018 est.)

3.3% (2017 est.)
4.5% (2017 est.)

9.9% (2016 est.)
Labor force521.9 million (2017 est.)16.81 million (2017 est.)

note: severe lack of skilled labor
Labor force - by occupationagriculture: 47%

industry: 22%

services: 31% (FY 2014 est.)
agriculture: 69%

industry: 12%

services: 19% (2015 est.)
Unemployment rate8.5% (2017 est.)

8.5% (2016 est.)
3% (2017 est.)

3.2% (2016 est.)
Distribution of family income - Gini index35.7 (2011 est.)

37.8 (1997)
32.8 (2010 est.)

47.2 (2008 est.)
Budgetrevenues: 238.2 billion (2017 est.)

expenditures: 329 billion (2017 est.)
revenues: 5.925 billion (2017 est.)

expenditures: 5.945 billion (2017 est.)
Industriestextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticalstourism, carpets, textiles; small rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production
Industrial production growth rate5.5% (2017 est.)12.4% (2017 est.)
Agriculture - productssugar cane, rice, wheat, buffalo milk, milk, potatoes, vegetables, bananas, maize, mangoes/guavasrice, vegetables, sugar cane, potatoes, maize, wheat, buffalo milk, milk, fruit, mangoes/guavas
Exports$572.073 billion (2019 est.)

$564.165 billion (2018 est.)

$509.661 billion (2017 est.)
$818.7 million (2017 est.)

$761.6 million (2016 est.)
Exports - commoditiesrefined petroleum, diamonds, packaged medicines, jewelry, cars (2019)palm oil, clothing and apparel, carpets, soybean oil, flavored water (2019)
Exports - partnersUnited States 17%, United Arab Emirates 9%, China 5% (2019)India 68%, United States 10% (2019)
Imports$624.314 billion (2019 est.)

$656.529 billion (2018 est.)

$575.121 billion (2017 est.)
$10 billion (2017 est.)

$8.764 billion (2016 est.)
Imports - commoditiescrude petroleum, gold, coal, diamonds, natural gas (2019)refined petroleum, iron, broadcasting equipment, natural gas, rice (2019)
Imports - partnersChina 15%, United States 7%, United Arab Emirates 6%, Saudi Arabia 5% (2019)India 70%, China 15% (2019)
Debt - external$555.388 billion (2019 est.)

$518.34 billion (2018 est.)
$5.849 billion (31 December 2017 est.)

$4.321 billion (31 December 2016 est.)
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.)
Nepalese rupees (NPR) per US dollar -

104 (2017 est.)

107.38 (2016 est.)

107.38 (2015 est.)

102.41 (2014 est.)

99.53 (2013 est.)
Fiscal year1 April - 31 March16 July - 15 July
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
26.4% of GDP (2017 est.)

27.9% of GDP (2016 est.)
Reserves of foreign exchange and gold$409.8 billion (31 December 2017 est.)

$359.7 billion (31 December 2016 est.)
$9.091 billion (31 December 2017 est.)

$8.506 billion (31 December 2016 est.)
Current Account Balance-$29.748 billion (2019 est.)

-$65.939 billion (2018 est.)
-$93 million (2017 est.)

$1.339 billion (2016 est.)
GDP (official exchange rate)$2,835,927,000,000 (2019 est.)$24.88 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: 63.2 (2020)

Starting a Business score: 81.7 (2020)

Trading score: 85.1 (2020)

Enforcement score: 46 (2020)
Taxes and other revenues9.2% (of GDP) (2017 est.)23.8% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-3.5% (of GDP) (2017 est.)-0.1% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 22.3%

male: 21.9%

female: 23.8% (2019 est.)
total: 21.4%

male: 19.7%

female: 23.9% (2017 est.)
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: 78% (2017 est.)

government consumption: 11.7% (2017 est.)

investment in fixed capital: 33.8% (2017 est.)

investment in inventories: 8.7% (2017 est.)

exports of goods and services: 9.8% (2017 est.)

imports of goods and services: -42% (2017 est.)
Gross national saving29.1% of GDP (2019 est.)

31.1% of GDP (2018 est.)

31.4% of GDP (2017 est.)
48.9% of GDP (2019 est.)

48.2% of GDP (2018 est.)

46.7% of GDP (2017 est.)

Source: CIA Factbook