Effects of the Global Recession on Indian Industries
- Part of the reason for India's stability through the global recession is its agriculture sector. Unlike many western countries, more than half of India's population still works in the agricultural sector, primarily on small farms. Being such a populous country, India has a food shortage as do many of the countries surrounding India, such as Pakistan and China. Whatever the rest of the economy is doing, there is always a demand for food and so this sector saw little damage in terms of the recession.
- India's services sector certainly felt the impact of the recession, but not severely and not in the long term. According to Jasjit Sawhney, CEO of net4 India, there were immediate losses in information technology (IT) contracts and some scaling back. However, as the recession continued, an uptick in service contracts was reported in some areas as international countries moved to reduce costs. This included both offshoring more work to Indian companies and new attempts at automation to reduce costs, which required additional IT systems. Overall India saw a small amount of growth in the services industry in 2008.
- India's exports were initially hard hit by the recession. After initially projecting $200 billion in exports for 2008, exports came in at only $168.7 billion and remained depressed, coming in at $168.2 billion in 2009. But the country appears to be recovering as of 2011. According to the CIA's World Factbook, India's exports rose to $201 billion in 2010. The fact that India's GDP continued to rise despite a drop-off in exports is an indicator that the country's internal economic strength is increasing.
- As of 2011, India's economy seems to have recovered from any damage done by the 2008 global recession and seems to be rising again. The Daily News and Analysis website reports that the overall Indiana economy is expected to grow by 8.6 percent. Per capita incomes are also expected to rise by a remarkable 17.3 percent, although this will partially be offset by inflation, which is currently 8.43 percent with food inflation at 17 percent. Because of economic conditions in places such as the United Arab Emirates and the United States, many highly skilled Indians who have been working and going to school abroad are returning home to find work.