India's economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries and a multitude of support services. Government controls have been reduced on foreign trade and investment, and privatization of domestic output is proceeding steadily. The economy has posted an excellent average growth rate of 6 percent since 1990, reducing poverty by about 10 percentage points. India is capitalizing on its large numbers of well-educated people skilled in the English language. In a global comparison, India achieved impressive economic growth of 8.3 percent in 2003. Resolute economic reforms and structural change were among the factors that contributed to it. In addition, with the help of international investments, major advances were made in the privatisation of India's government-owned enterprises. Easier conditions for imports and exports also contributed to India's leading position on the South Asian market.

Today India has a stable economy with an inflation rate of under 3 percent. In recent years there has been a marked rise in the number of international industrial concerns setting up a base in India. The automotive industry is well represented among them. Each year around 730,000 vehicles are manufactured in India. In this sector, the subcontinent is one of the biggest growth markets in the Asian region, despite the late international opening in 1992. Sales of private vehicles rose in 2004 by 25 percent to 1.04 million units. The Society of Indian Automobile Manufacturers (SIAM) registered an increase in sales of 22 percent in private vehicles and 26 percent in commercial vehicles for the period April to November 2004. Continuing strong growth is also being experienced in exports. Exports of private cars rose by 43 percent, of commercial vehicles by 74 percent. Currently the level of car ownership in India is moderate, but with the expansion of the middle classes, this is expected to increase considerably.
(*CIA Fact sheet, FAZ 08.01.05, IMAG report on Auto Expo 2004)