The economy of India is the eleventh largest economy in the world by nominal GDP[1] and the fourth largest by purchasing power parity (PPP).[9] Following strong economic reforms from the socialist inspired economy of a post-independence Indian nation, the country began to develop a fast-paced economic growth, as free market principles were initiated in 1990 for international competition and foreign investment.[10] India is an emerging economic power with a very large pool of human and natural resources, and a growing large pool of skilled professionals. According to the book 'Contours of the World Economy, 1-2030AD' by Angus Maddison, India was the largest economy from the year 1 AD until the colonial period whereupon it was taken over by other countries such as China and the U.K. Economists predict that by 2020,[11] India will be among the leading economies of the world. According to the BRIC report, published by Goldman Sachs, India will be the second largest economy after China by 2043.

India was under social democratic-based policies from 1947 to 1991. The economy was characterised by extensive regulation, protectionism, public ownership, pervasive corruption and slow growth.[12][13][14][15] Since 1991, continuing economic liberalisation has moved the country toward a market-based economy.[13][14] A revival of economic reforms and better economic policy in first decade of the 21st century accelerated India's economic growth rate. In recent years, Indian cities have continued to liberalize business regulations.[6] By 2008, India had established itself as the world's second-fastest growing major economy.[16][17][18] However, the year 2009 saw a significant slowdown in India's GDP growth rate to 6.8%[19] as well as the return of a large projected fiscal deficit of 6.8% of GDP which would be among the highest in the world.[20][21]

India's large service industry