Background: The Indus Valley civilization, one of the world's oldest, flourished during the 3rd and 2nd

millennia B.C. and extended into northwestern India. Aryan tribes from the northwest infiltrated onto the Indian subcontinent about 1500 B.C.; their merger with the earlier Dravidian inhabitants created the classical Indian culture. The Maurya Empire of the 4th and 3rd centuries B.C. which reached its zenith under ASHOKA - united much of South Asia. The Golden Age ushered in by the Gupta dynasty (4th to 6th centuries A.D.) saw a flowering of Indian science, art, and culture. Islam spread across the subcontinent over a period of 700 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established the Delhi Sultanate. In the early 16th century, the Emperor BABUR established the Mughal Dynasty which ruled India for more than three centuries. European explorers began establishing footholds in India during the 16th century. By the 19th century, Great Britain had become the dominant political power on the subcontinent. The British Indian Army played a vital role in both World Wars. Nonviolent resistance to British rule, led by Mohandas GANDHI and Jawaharlal NEHRU, eventually brought about independence in 1947. Communal violence led to the subcontinent's bloody partition, which resulted in the creation of two separate states, India and Pakistan. The two countries have fought three wars since independence, the last of which in 1971 resulted in East Pakistan becoming the separate nation of Bangladesh. India's nuclear weapons tests in 1998 caused Pakistan to conduct its own tests that same year. In November 2008, terrorists allegedly originating from Pakistan conducted a series of coordinated attacks in Mumbai, India's financial capital. Despite pressing problems such as significant overpopulation, environmental degradation, extensive poverty, and widespread corruption, rapid economic development is fueling India's rise on the world stage. In January 2011, India assumed a nonpermanent seat in the UN Security Council for the 2011-12 term. Definition: This entry usually highlights major historic events and current issues and may include a statement about one or two key future trends. Economy - overview: India is developing into an open-market economy, yet traces of its past autarkic policies remain. 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. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in

real terms. Merchandise exports, which account for about 15% of GDP, returned to pre-financial crisis levels. An industrial expansion and high food prices, resulting from the combined effects of the weak 2009 monsoon and inefficiencies in the government's food distribution system, fueled inflation which peaked at about 11% in the first half fo 2010, but has gradually decreased to single digits following a series of central bank interest rate hikes. New Delhi in 2010 reduced subsidies in fuel and fertilizers, sold a small percentage of its shares in some state-owned enterprises and auctioned off rights to radio bandwidth for 3G telecommunications in part to lower the government's deficit. The Indian Government seeks to reduce its deficit to 5.5% of GDP in FY 2010-11, down from 6.8% in the previous fiscal year. India's long term challenges include widespread poverty, inadequate physical and social infrastructure, limited nonagricultural employment opportunities, insufficient access to quality basic and higher education, and accommodiating rual-to-urban migration. Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends GDP (official exchange rate): $1.43 trillion (2010 est.) Yea r 2009 2010 2011 GDP (official exchange rate) 1210000000000 1237000000000 1430000000000 Rank 12 11 11 2.23 % 15.60 % Percent Change Date of Information 2008 est. 2009 est. 2010 est.

Definition: This entry gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation's GDP at offical exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year. The measure is simple to compute and gives a precise measure of the value of output. Many economists prefer this measure when gauging the economic power an economy maintains vis-? -vis its neighbors, judging that an exchange rate captures the purchasing power a nation enjoys in the international marketplace. Official exchange rates, however, can be artifically fixed and/or subject to manipulation - resulting in claims of the country having an under- or over-valued currency - and are not necessarily the equivalent of a marketdetermined exchange rate. Moreover, even if the official exchange rate is marketdetermined, market exchange rates are frequently established by a relatively small set of goods and services (the ones the country trades) and may not capture the value of the larger set of goods the country produces. Furthermore, OER-converted GDP is not well suited to comparing domestic GDP over time,

since appreciation/depreciation from one year to the next will make the OER GDP value rise/fall regardless of whether home-currency-denominated GDP changed. GDP - real growth rate: 8.3% (2010 est.) 7.4% (2009 est.) 7.4% (2008 est.) Year GDP - real growth rate Rank Percent Change Date of Information 2003 2004 2005 2006 2007 2008 2009 2010 2011 4.30 % 8.30 % 6.20 % 8.40 % 9.20 % 9.00 % 7.40 % 7.40 % 8.30 % 54 16 43 24 23 23 28 10 10 93.02 % -25.30 % 35.48 % 9.52 % -2.17 % -17.78 % 0.00 % 12.16 % 2002 est. 2003 est. 2004 est. 2005 est. 2006 est. 2007 est. 2008 est. 2009 est. 2010 est.

Definition: This entry gives GDP growth on an annual basis adjusted for inflation and expressed as a percent GDP - composition by sector: agriculture: 16.1% industry: 28.6% services: 55.3% (2010 est.) Definition: This entry gives the percentage contribution of agriculture, industry, and services to total GDP. The distribution will total less than 100 percent if the data are incomplete. Inflation rate (consumer prices): 11.7% (2010 est.) 10.9% (2009 est.) Yea r 2003 2004 2005 2006 2007 Inflation rate (consumer prices) 5.40 % 3.80 % 4.20 % 4.20 % 5.30 % Rank 64 92 134 125 139 -29.63 % 10.53 % 0.00 % 26.19 % Percent Change Date of Information 2002 est. 2003 est. 2004 est. 2005 est. 2006 est.

2008 2009 2010 2011

6.40 % 8.30 % 10.90 % 11.70 %

148 130 197 201

20.75 % 29.69 % 31.33 % 7.34 %

2007 est. 2008 est. 2009 est. 2010 est.

Definition: This entry furnishes the annual percent change in consumer prices compared with the previous year's consumer prices Commercial bank prime lending rate: 12.19% (31 December 2009 est.) 13.31% (31 December 2008 est.) Yea r 2008 2010 2011 Commercial bank prime lending rate 13.02 13.31 13.31 Rank 64 61 59 2.23 % 0.00 % Percent Change Date of Information 31 December 2007 31 December 2008 est. 31 December 2008 est.

Definition: This entry provides a simple average of annualized interest rates commercial banks charge on new loans, denominated in the national currency, to their most credit-worthy customers Budget: revenues: $170.7 billion expenditures: $257.4 billion (2010 est.) Exports: $201 billion (2010 est.) $168.2 billion (2009 est.) Year 2003 2004 2005 2006 Exports $44,500,000,000 $57,240,000,000 $69,180,000,000 $76,230,000,000 Rank Percent Change Date of Information 32 31 33 33 29 25 25 21 22 28.63 % 20.86 % 10.19 % 46.92 % 35.09 % 16.59 % -4.65 % 19.50 % 2001 2003 est. 2004 est. 2005 est. 2006 est. 2007 est. 2008 est. 2009 est. 2010 est.

2007 $112,000,000,000 2008 $151,300,000,000 2009 $176,400,000,000 2010 $168,200,000,000 2011 $201,000,000,000

Telephones - mobile cellular: 670 million (2010) Yea r 2003 2004 2005 2006 2007 2008 2009 2010 2011 Telephones - mobile cellular 2,930,000 26,154,400 26,154,400 69,193,321 69,193,000 296,080,000 362,300,000 670,000,000 670,000,000 Rank 30 13 14 8 8 2 2 2 2 792.64 % 0.00 % 164.56 % 0.00 % 327.90 % 22.37 % 84.93 % 0.00 % Percent Change Date of Information November 2000 2003 2003 2006 2006 2008 2009 2010 2010