Economic Influences on Development (Edexcel GCSE Geography A)

Change in Economic Sectors in India

• As India has developed, its economic structure has changed from mainly primary to tertiary and quaternary

Changes and Impacts of India's Economic Sectors

International Trade & Aid in India

• Changes to India’s trading policies during the 1990s have led to a rapid rise in imports and exports

• The government encourages companies to make international links 

  • Education has been a priority to provide an educated workforce to international companies

• India’s key imports are oil, gold, silver, and electrical goods

• India’s key exports are oil products, gems and jewellery

  • In 2023, India ranked 18th in the world for merchandise exports

  • India ranks 8th in the world for export of commercial services such as transport, shipping and finance

Aid in India

• Historically, India has received the most international aid, but this has declined rapidly as the country has developed

  • The UK, for example, planned to end all aid to India by 2015, although technical assistance does continue

• India now sends aid to other countries, reversing the trend from recipient to donor

• According to India's budget, in 2022, it gave $2.4 billion in foreign aid and gave credit of $30 billion to several countries for development projects

Public & Private Investment in India

• Public investment

  • India has agreed to invest in renewable energy sources such as solar power and plant more forests to absorb carbon emissions

  • There is a large public sector and India invests in education, healthcare, transport and housing, hoping to reduce the gap between public and private sectors

  • Small Indian companies are encouraged to invest in economic development through Startup India, with taxes and paperwork reduced 

• India is also a member of the G20, giving it greater influence in global politics and trade agreements

• Private investment

  • Before 1991, private investment was difficult and a licence was needed by companies before they could build and begin producing goods

  • After the government opened its economy, large investors from the USA and Europe outsourced its manufacturing and IT services to India

  • This is through trade and development with Transnational Corporations (TNCs) 

    • Many TNCs have set up offices and production plants in India

    • Competition for work is high and training is provided

    • Infrastructure within the country has been improved

    • TNCs contribute tax to the government, which is spent on further development

    • However, the best jobs are usually given to foreign workers from the TNC's own country