India is developing into an open-market economy. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only 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 and software workers.

India's long term challenges include widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, insufficient access to quality basic and higher education and accommodating rural-to-urban migration.

India has grown to become a trillion dollar economy with a largely self-sufficient agricultural sector, a diversified industrial base and a stable financial and services sector. There is a structural shift visible from an agrarian to a services driven economy since 1970. As compared to other countries, India has been and continues to be relatively insulated from external shocks due to its strong domestic consumption pattern. Consequently India was relatively unaffected by the global recession, which affected the whole world in 2009.

Increasing urbanization and modern technology have brought about a remarkable change in the lifestyles and consumption pattern of Indians. Private domestic consumptions accounts for more than 50% of the country’s GDP and is one of the key factors driving overseas investments in the country.

Economic indicators 2010
GDP - US $ 4.06 trillion (fifth in the world list)
GDP per capita - US $ 3,500
GDP real growth rate - 10.4% (fifth in the world list)
Inflation rate - 12%
Unemployment rate - 10%
Labor force - 478,3 million (second in the world list)

Foreign trade
Total trade between India and the Netherlands has grown over 80.72% in the period 2006 - 2010. Exports from India to the Netherlands in these five years have increased 97.57% while Dutch exports to India increased by 55.34%.
Major Indian exports to the Netherlands include mineral products, electrical machinery equipment, textile fabrics & goods, products of the chemicals and related industries, transport equipment and products of vegetable origin.
Major Indian imports from the Netherlands are electronic goods, electrical machinery, products of the chemical and related industries, non-precious metals, medical or surgical instruments and accessories.
Main trading partners import - China, UAE, Saudi Arabia, US, Australia
Main trading partners export - US, UAE, China

Foreign direct investment
The Netherlands ranks 5^th in the list of countries in terms of cumulative FDI inflows into India during the period April 2000 to March 2011, with fresh inflows, not including reinvestment of dividends etc., amounting to US $ 5.7 billion which was 4 % of total inflows into India during the above period. A large number of Dutch majors like Philips, Royal Dutch Shell, Unilever, ING, Rabobank, KLM, Akzo Nobel and others have a major presence in India in important sectors of the economy and have been steadily planning additional investments to expand their operations. Currently there are more than 100 Dutch companies that have a presence in India.

India presents a vast potential for overseas investment and is actively encouraging the entrance of foreign players into the market. India is also one of the few markets in the world, which offers high prospects for growth and earning potential in practically all areas of business.
Key sectors in India are amongst others, automotive, banking, health sciences, information technology, insurance, oil and gas, ports, power and utilities, real estate, retail and consumer products and roads and highways. A selection of these sectors will be discusses here in more detail.

Automobile
Today, India is among the top three markets across a number of vehicle segments attracting many global players. India is developing into a small vehicle product development hub enables by the large volumes needed for the domestic market and the ability to reduce costs through frugal engineering and manufacturing. Its proximity to the south-east Asian and African markets and well-connected ports makes it an ideal location to develop as a small vehicle manufacturing hub. Furthermore the barriers to entry into the automotive industry are relatively low and setting up operations is fairly easy without the need for industrial licenses.
India is the second-fastest growing vehicle market in the world chiefly due to the rising personal disposable income and a growing middle class. The number of households in the middle income group is expected to rise to 170m (65%) in 2015. This provides immense scope for growth in the passenger car density, which is currently 11 per 1000 people, compared to 150 in countries such as Brazil.

Health sciences
Indian life sciences industry has evolved tremendously, with pharmaceutical, biotechnology and health care domains contributing significantly to drive development and growth in the sector. A large population, evolving patient demographics, increasing healthcare expenditure, growing urbanization, rising life expectancy, increasing disposable income and active private-sector participation have augmented the growth of the country’s healthcare sector in recent years. In the pharmaceutical sector demand from the exports market has been growing rapidly due to the capability of Indian players to produce cost-effective drugs with world-class manufacturing facilities. Medical devices have advanced in the field of diagnostic kits and constitute a high growth segment in the medical devices market with a growth rate of 30%. Key factors contributing to this are increasing urban middle class population demanding better health care services, as well as expansion of corporate hospitals and research institutes in the country.

Retail and consumer products
With an estimated market size of US$395b in 2011, India’s retail sector is at the peak of its appeal for international and Indian players. Being the second-largest employer after agriculture, this sector is expected to grow to US$785b by 2014, ensuring the retail sector continues to be one of the mainstays of the Indian economy. Up to 100% of FDI is allowed under the automatic route in cash-and-carry wholesale trading and export trading. Up to 51% FDI, with prior government approval is permitted in retailing of ‘single-brand’ products. The demand for international brands is showing a healthy uptrend. Further the growing presence of domestic companies across the different retail verticals is giving the Indian organized market a strong boost. Changing lifestyles, strong income growth and favorable demographic patterns have resulted in huge expansion of Indian retail.

Telecommunications
The telecom sector has played a pivotal role in the socioeconomic development of India. In fact, the Indian telecom sector is one of the key architects of the accelerated growth and progress of other segments of the economy. Enhanced connectivity improves governance, business communication, security, response to emergencies and the overall strengthening of the country’s sociocultural ethos. In recent times, India has emerged as one of the fastest growing telecom markets in the world. The considerable growth of the telecom industry in India is being followed by the urge to move toward better technology and the next level of service delivery. While the last five years have been transformational for Indian telecom industry, the next few years look even more exciting. BWA (broadband wireless access) will overcome the key hindrance of last mile connectivity in India, while 3G has the potential to make the mobile phone a ubiquitous device to access internet based services. It is further expected that 3G and BWA will increase the demand for data based services such as mobile payment, m-health, m-governance and m-education services.

India is the seventh largest country in the world, and inhibits the world’s second largest population (1.2b). India consists of 28 states and seven union territories. China, Nepal and Bhutan are bordering countries to the north, Afghanistan and Pakistan to the north-west, Myanmar and Bangladesh to the East and Sri Lanka to the south.

Climate
India’s climate can be classified as tropical monsoon. The country has four seasons: summer (March – June), monsoon (June – September), post-monsoon (October – November) and winter (December – February).

Natural resources
Coal, manganese, bauxite, iron ore, mica, chromites, diamond, limestone, titanium ore, natural gas, petroleum and arable land form India’s natural resources.
In total 51% of India’s land is arable.

Over the centuries India had always been attractive to traders, and one of the first Europeans to come to India was the Portuguese trader Vasco da Gama who landed at Calicut, sailing via the Cape of Good Hope in 1498. Vasco da Gama was followed by the French, the Dutch and the English, all of whom were lured by the commercial interests that India offered. By the last quarter of the 18th century the English established themselves as the dominant power in India and they set about making revolutionary changes in the social, political and the economic life of the country. India was part of the British empire until 1947 and today India is world’s largest democracy with a federal form of government.

India has one of the largest school-age population in the world. It has a well-established education system with more than 1.6m schools enrolling in excess of 130m students. For higher education, India has more than 500 universities as well as more than 25000 colleges and 7000 technical institutions with approximately 13m students. India’s labor force stood at approximately 478.3m in 2010. It is estimated that around 13m people enter Indian’s urban labor force every year.