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Destination India- An Overview

India, the world's largest democracy, is the seventh largest country in terms of land area and the second most populous country in the world. It has a land frontier of about 15,200 km. The total length of the coastline of the mainland, Lakshadweep Islands and the Andaman & Nicobar Islands is 7,516.6 km. With a land mass of 3.29 million square kilometers and a population more than 1.29 billion (2015), India represents a nation rich in diversity in terms of its culture, people, language, geographic & climatic conditions and natural resources.Already containing 17.5% of the world's population, India is projected to be the world's most populous country by 2022, surpassing China, its population reaching 1.6 billion by 2050. Its population growth rate is 1.2%, ranking 94th in the world in 2013. India has more than 50% of its population below the age of 25 and more than 65% below the age of 35. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India's dependency ratio should be just over 0.4.

Category Global Ranking
Area 7th
Population 2nd
Population growth rate 102nd of 212
Population density
(people per square kilometer of land area)
24th of 212
Male to Female ratio, at birth 12th of 214

India enjoys a stable political set up, being a socialistic, democratic and secular republic with a parliamentary system of government. Apart from the democratically elected legislatures, the existence of an independent judiciary, a free and vibrant press, a single legal & accounting system and the widespread use of English as the principal language of the business and administration, an abundance of qualified and skilled manpower are some of the attractive features India possesses. A transparent and secure environment for business and foreign investment prevails.

India : An Idea who’s time has come??

The subcontinent to whose splendor, diversity and world-class facilities the world has woken up to and was the flavor of the season. The government is focused on ensuring that India is a beacon of stability in an increasingly volatile world. India seems to be the bright spot among emerging markets and this has created a sense that this is the country's moment, says former US treasury secretary Larry Summers, one of the world's leading economists. “I think there is a sense of excitement inherent in this moment".

Take a look at her economy- growing faster than the rest of the world, geographically strategic location, faith fortified by major software firms to make it a global backup hub for software, her forex reserves, her rising Sensex, rapidly growing consumer markets, presence of world's finest and choicest brands and the exceptional growth in interest from FIIs, to understand why India offers a feel good factor. Today, India is the fastest growing major economy and one of the most exciting emerging markets in the world.

Key Economic Indicators

There is now established and substantial evidence of strong economic fundamentals in India. India has become the third-largest economy in the world by purchasing power parity (PPP) after the US and China accounting for 6.8% of world’s GDP. The economy of India is the seventh-largest in the world by nominal GDP. India has enjoyed a steady acceleration of the growth rate, from the so- called ‘Hindu rate of growth’ of 3.5% to the latest ten- year average of 7. India classified as newly industrialized country, one of the G-20 major economies, a member of BRICS and a developing economy with approximately 7% average growth rate for the last two decades.

India's economy became the world's fastest growing major economy from the last quarter of 2014, replacing China. The long-term growth prospective of the Indian economy is moderately positive due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. The Indian economy has the potential to become the world's 3rd-largest economy by the next decade, and one of the largest economies by mid-century. And the outlook for short-term growth is also good as according to the IMF, the Indian economy is the "bright spot" in the global landscape. India also topped the World Bank’s growth outlook for 2015-16 for the first time with the economy having grown 7.3% in 2014-15 and expected to grow 7.5-8.3% in 2015-16.

India's huge population of more than 1.29 billion people, which includes significant middle class people and an emerging rural market, offers a vast untapped market that cannot be overlooked by any investor operating in the global marketplace.



Share (%age)

Population in billion (2015)



Surface Area (In Thousand Sq Km)



GNI, Atlas method in US $ Billion (2014)

2035.88 billion


GNI Measured at PPP in US $ Billion (2014)



GNI per capita, Atlas method (current US$) (2014)



Per Capita GNI Measured at PPP in US $ (2014)



Annual GDP Growth 2014 (%)



GDP in US $ (2014)

2.067 trillion


Exports in US $ (2014)

477.1 billion


Imports in US $ (2014)

609.9 billion


Merchandise Exports in US $ (2014)

321.5 billion


Merchandise Imports in US $ (2014)

463 billion


Exports of Commercial Services in US $ (2014)

155.6 billion


Imports of Commercial Services in US $ (2014)

146.9 billion


FDI as % of GDP (2014)



FDI Inflow (US $) (2014)

261.7 billion


Foreign reserves (US $) (November 2015)

352.365 billion


Forestry & Fishing

The forest land in India covers nearly 23 per cent of the total land area. Commercial forestry is largely restricted to the northern highlands, Assam, and the regions bordering on the Himalayas. By-products such as charcoal, fruits and nuts, fibers, oils, gums, and resins are among the most valuable commodities.

Although largely undeveloped on a national scale, fishing remains vital in certain regions, such as the Ganges delta in Bengal and along the southwestern coast. In recent years the government has been encouraging deep-sea fishing by constructing processing plants and underwriting oceangoing fleets and vessels.

Banking & Finance

The Rupee, India's basic monetary unit, is divided into 100 paisa.


The Indian banking industry has its foundations in the 18th century, and has had a varied evolutionary experience since then. The initial banks in India were primarily traders’ banks engaged only in financing activities. Banking industry in the pre-independence era developed with the Presidency Banks, which were transformed into the Imperial Bank of India and subsequently into the State Bank of India. The initial days of the industry saw a majority private ownership and a highly volatile work environment. Major strides towards public ownership and accountability were made with nationalisation in 1969 and 1980 which transformed the face of banking in India. The industry in recent times has recognised the importance of private and foreign players in a competitive scenario and has moved towards greater liberalisation.

In the evolution of this strategic industry spanning over two centuries, immense developments have been made in terms of the regulations governing it, the ownership structure, products and services offered and the technology deployed. The entire evolution can be classified into four distinct phases.

  • Phase I- Pre-Nationalisation Phase (prior to 1955)
  • Phase II- Era of Nationalisation and Consolidation (1955-1990)
  • Phase III- Introduction of Indian Financial & Banking Sector Reforms and Partial Liberalisation (1990-2004)
  • Phase IV- Period of Increased Liberalisation (2004 onwards)

Current Structure

The Indian banking system consists of 26 public sector banks, 25 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions. In addition to this, there are more than 13,000 non-banking financial companies, credit societies and cooperatives. Public-sector banks control nearly 80 percent of the market, thereby leaving comparatively much smaller shares for its private peers.

    Scheduled Commercial Bank Branches (Nos) (Sept 2015)

    Total number of ATMs installed by the banks (2014)

    Net Profit of Scheduled Commercial Banks (as of March 2014)
    Rs 809,043 million

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-regulated. The financial and economic conditions in the country are far superior to any other country in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well.

The Indian banking sector’s assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it being accounted by the public sector. Total lending and deposits increased at a compound annual growth rate (CAGR) of 20.7 per cent and 19.7 per cent, respectively, during FY07-14 and are further poised for growth, backed by demand for housing and personal finance. Total asset size of banking sector assets is expected to increase to US$ 28.5 trillion by FY25. Deposits have grown at a CAGR of 13.6 per cent during FY05–15 to an estimated US$ 1.48 trillion in FY15. Deposit growth has been mainly driven by strong growth in savings amid rising disposable income levels.

Indian banks are increasingly focusing on adopting integrated approach to risk management. Banks have already embraced the international banking supervision accord of Basel II. According to RBI, majority of the banks already meet capital requirements of Basel III, which has a deadline of March 31, 2019. Most of the banks have put in place the framework for asset-liability match, credit and derivatives risk management.

Rising incomes are expected to enhance the need for banking services in rural areas and therefore drive the growth of the sector; programmes like MNREGA have helped in increasing rural income aided by the Jan Dhan Yojana. The Reserve Bank of India (RBI) has relaxed its branch licensing policy, thereby allowing banks (which meet certain financial parameters) to set-up new branches in tier-2 to tier-6 centers, without prior approval from RBI. It has emphasised the need to focus on spreading the reach of banking services to the un-banked population of India. As of November, 2015, 192.1 million accounts had been opened under Pradhan Mantri Jan Dhan Yojna (PMJDY) and 165.1 million RuPay debit cards were issued. These new accounts have mustered deposits worth Rs 26,819 crore (US$ 4 billion).

Indian banking industry is expected to witness better growth prospects in 2015 as a sense of optimism stems from the Government’s measures towards revitalizing the industrial growth in the country. In addition, RBI’s new measures may go a long way in helping the restructuring of the domestic banking industry.Total credit extended in FY15 (2014- 2015) is US$ 1,089 billion. Standard & Poor’s estimates that credit growth in India’s banking sector would improve to 12-13 per cent in FY16 from less than 10 per cent in the second half of CY14.

Investments/ developments

In the past few months, there have been many investments and developments in the Indian banking sector

  • Global rating agency Moody's has upgraded its outlook for the Indian banking system to stable from negative based on its assessment of five drivers including improvement in operating environment and stable asset risk and capital scenario.
  • Lok Capital, a private equity investor backed by US-based non-profit organisation Rockefeller Foundation, plans to invest up to US$ 15 million in two proposed small finance banks in India over the next one year.
  • The Reserve Bank of India (RBI) has granted in-principle licences to 10 applicants to open small finance banks, which will help expanding access to financial services in rural and semi-urban areas.
  • IDFC Bank has become the latest new bank to start operations with 23 branches, including 15 branches in rural areas of Madhya Pradesh.
  • The RBI has given in-principle approval to 11 applicants to establish payment banks. These banks can accept deposits and remittances, but are not allowed to extend any loans.
  • The Bank of Tokyo-Mitsubishi (BTMU), a Japanese financial services group, aims to double its branch count in India to 10 over the next three years and also target a 10 per cent credit growth during FY16.
  • State Bank of India has tied up with e-commerce portal Snapdeal and payment gateway Paypal to finance MSME businesses.
  • The United Economic Forum (UEF), an organisation that works to improve socio-economic status of the minority community in India, has signed a memorandum of understanding (MoU) with Indian Overseas Bank (IOB) for financing entrepreneurs from backward communities to set up businesses in Tamil Nadu
  • The RBI has allowed third-party white label automated teller machines (ATM) to accept international cards, including international prepaid cards, and said white label ATMs can now tie up with any commercial bank for cash supply.
  • The RBI has allowed Indian alternative investment funds (AIFs), to invest abroad, in order to increase the investment opportunities for these funds.
  • In order to boost the infrastructure sector and the banks financing long gestation projects, the RBI has extended its flexible refinancing and repayment option for long-term infrastructure projects to existing ones where the total exposure of lenders is more than Rs 500 crore (US$ 75.1 million).
  • RBI governor Mr Raghuram Rajan and European Central Bank President Mr Mario Draghi have signed an MoU on cooperation in central banking. “The memorandum of understanding provides a framework for regular exchange of information, policy dialogue and technical cooperation between the two institutions. Technical cooperation may take the form of joint seminars and workshops in areas of mutual interest in the field of central banking,” RBI said on its website.
  • RBL Bank informed that it would be the anchor investor in Trifecta Capital’s Venture Debt Fund, the first alternative investment fund (AIF) in India with a commitment of Rs 50 crore (US$ 7.51 million). This move provides RBL Bank the opportunity to support the emerging venture debt market in India.
  • Bandhan Financial Services raised Rs 1,600 crore (US$ 240.2 million) from two international institutional investors to help convert its microfinance business into a full service bank. Bandhan, one of the two entities to get a banking licence along with IDFC, launched its banking operations in August 2015.

Government Initiatives

The government and the regulator have undertaken several measures to strengthen the Indian banking sector.

  • The Government of India is looking to set up a special fund, as a part of National Investment and Infrastructure Fund (NIIF), to deal with stressed assets of banks. The special fund will potentially take over assets which are viable but don’t have additional fresh equity from promoters coming in to complete the project.
  • The Reserve Bank of India (RBI) plans to soon come out with guidelines, such as common risk-based know-your-customer (KYC) norms, to reinforce protection for consumers, especially since a large number of Indians have now been financially included post the government’s massive drive to open a bank account for each household.
  • To provide relief to the state electricity distribution companies, Government of India has proposed to their lenders that 75 per cent of their loans be converted to state government bonds in two phases by March 2017. This will help several banks, especially public sector banks, to offload credit to state electricity distribution companies from their loan book, thereby improving their asset quality.
  • The Reserve Bank of India (RBI), the Department of Industrial Policy & Promotion (DIPP) and the Finance Ministry are planning to raise the Foreign Direct Investment (FDI) limit in private banks sector to 100 per cent from 74 per cent.
  • Government of India aims to extend insurance, pension and credit facilities to those excluded from these benefits under the Pradhan Mantri Jan Dhan Yojana (PMJDY).<
  • The Government of India announced a capital infusion of Rs 6,990 crore (US$ 1.05 billion) in nine state run banks, including State Bank of India (SBI) and Punjab National Bank (PNB). However, the new efficiency parameters would include return on assets and return on equity. According to the finance ministry, “This year, the Government of India has adopted new criteria in which the banks which are more efficient would only be rewarded with extra capital for their equity so that they can further strengthen their position."
  • To facilitate an easy access to finance by Micro and Small Enterprises (MSEs), the Government/RBI has launched Credit Guarantee Fund Scheme to provide guarantee cover for collateral free credit facilities extended to MSEs upto Rs 1 Crore (US$ 0.15 million). Moreover, Micro Units Development & Refinance Agency (MUDRA) Ltd. was also established to refinance all Micro-finance Institutions (MFIs), which are in the business of lending to micro / small business entities engaged in manufacturing, trading and services activities upto Rs 10 lakh (US$ 0.015 million).
  • The central government has come out with draft proposals to encourage electronic transactions, including income tax benefits for payments made through debit or credit cards.
  • The Union cabinet has approved the establishment of the US$ 100 billion New Development Bank (NDB) envisaged by the five-member BRICS group as well as the BRICS “contingent reserve arrangement” (CRA).
  • The government has plans to set up a fund that will provide surety to banks against loans given to students for higher education.

Road Ahead

The Indian economy is on the brink of a major transformation, with several policy initiatives set to be implemented shortly. Positive business sentiments, improved consumer confidence and more controlled inflation are likely to prop-up the country’s the economic growth. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. All these factors suggest that India’s banking sector is also poised for robust growth as the rapidly growing business would turn to banks for their credit needs.

Also, the advancements in technology have brought the mobile and internet banking services to the fore. The banking sector is laying greater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order to enhance the customer’s overall experience as well as give banks a competitive edge.

Many banks, including HDFC, ICICI and AXIS are exploring the option to launch contact-less credit and debit cards in the market shortly. The cards, which use near field communication (NFC) mechanism, will allow customers to transact without having to insert or swipe.

Mining & Minerals

India is one of the world leaders in the production of iron ore, coal, and bauxite and produces significant amounts of manganese, mica, dolomite, copper, petroleum, chromium, lead, limestone, phosphate rock, zinc, gold, and silver.

For more details, visit the Mining Overview, Coal Overview


India has 280,328 MW (as on 31.10.2015) of installed capacity and the over all generation in India has increased from 771 Billion Units (BUs) during 2009- 10 to 1048 BUs in 2014- 15. Around 70 per cent of India's electricity is produced in thermal facilities using coal or petroleum products, 16 per cent electricity is generated by hydroelectric facilities, 13 percent using renewable energy sources and 2 per cent electricity is produced in nuclear power plants.

Installed Capacity: (as on 31.10.2015)




State Sector



Central Sector



Private Sector










Total Thermal












Hydro (Renewable)












Renewable Energy Sources (RES) include SHP, BG, BP, U&I and Wind Energy. SHP= Small Hydro Project, BG= Biomass Gasifier, BP= Biomass Power, U & I=Urban & Industrial Waste Power, RES=Renewable Energy Sources

India faces energy and power shortage and it has been estimated that India faces an energy shortage of 4 percent and peaking shortage of 5 per cent (year 2014). The shortages have reduced considerably in recent years, however there is lot of suppressed demand. It has also been estimated that if India was to achieve economic growth of 8- 10 per cent, it would need 20,000 MW of capacity addition every year.

Achievement and growth in electricity generation in India: 

Year Target Achievement % of target % of growth
2009-10 789.511 771.551 97.73 6.6
2010-11 830.757 811.143 97.64 5.56
2011-12 855.000 876.887 102.56 8.11
2012-13 930.000 912.056 98.07 4.01
2013-14 975.000 967.150 99.19 6.04
2014-15 1023.000 1048.673 102.51 8.43

India opened up its electricity sector in 1991 by amending the Electricity Supply Act 1948 to provide a legal framework for facilitating investments. Though there was an emphasis on generation, several transmission & distribution projects carried out by the State Electricity Boards (SEBs) and the Power Grid Corporation of India Ltd. were executed.

For more details, visit the Energy Overview, Power Overview, Coal Overview, Oil & gas Overview, Renewable Energy Overview


India’s transport sector is large and diverse; it caters to the needs of 1.29 billion people. Transport is an important part of India's economy and in 2014-15 the sector contributed about 6.7 percent to India’s GDP, with road transportation contributing the lion’s share. Good physical connectivity in the urban & rural areas and a well-knit and coordinated system of transport is essential for sustained economic growth. The Ministry of Shipping, Road Transport and Highways is responsible for the formation and implementation of policies and programs for the development of various modes of transport except the railways and the civil aviation.

Transport Sector Key Statistics

    115,000 km (2014)
    Railway Stations
    7,112 stations (2014)
    Passengers carried annually by Railways
    8,397 million (2013- 14)
    Rail Freight Traffic
    1058.81 million tons (2013- 14)
    Road System
    4.87 million kms (2015)
    National Highways
    97,135 (2015)
    13 Major, 200 Minor
    Cargo Handled (Major Ports)
    581.344 million tons (2014- 15)
    Air Passengers carried (include both domestic and international aircraft passengers of air carriers registered in India) source- WB
    82 million nos.(2014)

Since the economic liberalisation of the 1990s, India's growing economy has witnessed a rise in demand for transport infrastructure & services and transportation in India has progressed rapidly both in spread of network and in output of the system; today there are a variety of modes of transport by land, water and air. However, India's relatively low GDP per capita has meant that access to transport has not been uniform. Public transport remains the primary mode of transport for most of the population, and India's public transport systems are among the most heavily used in the world.

The automobile industry in India is rapidly growing with an annual record production of 23.4 million motor vehicles in 2014-15 with the vehicle volume expected to rise greatly in the future. The total number of registered motor vehicles on Indian roads reached 172 million in March 2013 of which over 21½ million were cars, taxis and jeeps. However motor vehicle penetration is low by international standards. As per census 2011, only around 2.2% of Indian households own a car/ jeep/ van while around 9.3% of Indian households own a scooter/motorcycle/moped. Despite this, the number of deaths caused by traffic is amongst the highest in the world and is increasing.

The present transport system of India comprises several modes of transport including rail, road, coastal shipping, water ways, air transport and urban metro, etc.


Indian Railways is one of the largest railway system in the world under a single management and is one of the world’s largest employers. The Railways in India provide the principal mode of tranportation for carrying passengers and cargo across India's vast territory. It brings together people from the farthest corners of the country and makes possible the conduct of business, sightseeing, pilgrimage and education.

India's rail network is the 4th longest and the most heavily used system in the world, transporting 8,224 million passengers and over 969 million tonnes of freight annually, as of 2012. However, most of its major corridors have capacity constraint requiring capacity enhancement plans.


Roads are the dominant mode of transportation in India and carry almost 90 percent of India’s passenger traffic and 65 percent of its freight. India has one of the largest road networks in the world, aggregating to about 33 lakh kilometers at present. India’s road network consists of National High-ways, State Highways, major/ other district roads and villages/ rural roads. The density of India’s highway network -- at 0.66 km of highway per square kilometer of land – is similar to that of the United States (0.65) and much greater than China's (0.16) or Brazil's (0.20). However, most highways in India are narrow and congested with poor surface quality, and 40 percent of India’s villages do not have access to all-weather roads.

Rural Roads- A Lifeline for Villages in India: Connecting Hinterland to Social Services and markets

Civil Aviation

India has 125 airports, including 11 international airports. The Ministry of Civil Aviation is responsible for the formulation of national policies and programmes for development and regulation of civil aviation and for devising and implementing schemes for orderly growth and expansion of civil air transport. Indian airports handled 190 million passengers and 2.5 million tonnes of cargo in year 2014-15, an increase of 12.5% for passenger and 10.9% for cargo traffic over previous year. The dramatic increase in air traffic for both passengers and cargo in recent years has placed a heavy strain on India’s major airports.

Indian Airports Passenger Traffic : 2007-08 to 2014-15
Year Passenger Traffic (in Millions) Passenger Traffic Growth Y-o-Y in %
International Domestic Total International Domestic Total
2007-08 29.81 87.06 116.87 15.2 23.3 21.1
2008-09 31.58 77.30 108.88 5.9 -11.2 -6.9
2009-10 34.37 89.39 123.76 9.0 15.5 13.6
2010-11 37.91 105.52 143.43 10.2 18.1 15.9
2011-12 40.80 121.51 162.31 7.6 15.2 13.2
2012-13 43.03 116.37 159.40 5.5 -4.2 -1.8
2013-14 46.62 122.30 168.92 8.3 5.1 6.0
2014-15 50.80 139.30 190.10 9.0 13.9 12.5


Indian Airports Passenger Traffic

Source: Airports Authority of India, APAO


The Maritime transport sector in India comprises Ports, Shipping, Shipbuilding and Ship repair and Inland Water Transport Systems and the Ministry of Shipping is the nodal central agency administering the issues related to them.

India has 13 major and about 200 minor and intermediate ports along its more than 7500 km long coastline. The Major Ports are under the purview of the Central government while the minor and intermediate ports come under the judrisdiction of the respective State governments. The Indian Government has allowed Foreign Direct Investment (FDI) of up to 100 per cent under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports. These ports serve India’s growing foreign trade in petroleum products, iron ore, and coal, as well as the increasing movement of containers. Cargo traffic, which recorded 1,052 million metric tonnes (MMT) in 2015, is expected to reach 1,758 MMT by 2017.


Shipping plays an important role in the transport sector of India's economy and sustaining growth in the country’s trade and commerce. Approximately, 90 percent of India’s trade by volume (70 per cent in terms of value) is moved by maritime transport. India has the largest merchant shipping fleet among the developing countries and ranks 20th amongst the countries with the largest cargo carrying fleet.

As on 31st December 2013, India had a fleet strength of 1199 vessels with gross registered tonnage (GRT) of 10.38 million, compared with fleet strength of 1154 vessels with 10.42 million GRT at the end of December, 2012. Out of the 1199 vessels registered as on 31st December, 2013, 835 vessels (69.6%) with 1.14 million GRT were engaged in coastal trade and the remaining 364 vessels (30.4%) with 9.25 million GRT were deployed for overseas trade. Thus the tonnage deployed for overseas trade was 89.1% of total GRT in contrast to 10.9% of the tonnage deployed for coastal trade. The age profile of Indian merchant shipping vessels indicates that 39.1% of the fleet was above 20 years of age, 25.7% of the fleet was between 0-5 years, and the remaining were spread almost equally across the age groups of 6-10 years, 11-15 years and 16-20 years.

An analysis of the fleet classified by the type of vessels in 2013 indicates that the maximum number of vessels (679) were Dry Cargo Liners followed by Oil tankers (137). In terms of GRT, the fleet composition reveals that the maximum tonnage 5457 thousand tonnes (52.6% of the total tonnage) was in the category of Oil Tankers whereas Dry Cargo Liners (which accounted for highest number of vessels (679)) contributed a mere 14.1% (1468 thousand tonnes) to India’s total tonnage.

Inland Water Transport

Inland water transportation remains largely undeveloped despite India's 14,500 km of navigable waterways which comprise rivers, canals, backwaters, creeks, etc. About 50 million tonnes of cargo corresponding to 2,82 billion tonne km was transported in 2005-2006 by Inland Water Transport (IWT). Its operations are currently restricted to a few stretches in the Ganga-Bhagirathi-Hooghly Rivers, the Brahmaputra, the Barak River, the rivers in goa, the backwaters in Kerala, inland waters in Mumbai and the deltaic regions of the Godavari-Krishna rivers


The transport sector has not been able to keep pace with rising demand and is proving to be a drag on the economy. Despite ongoing improvements in the sector, several aspects of the transport sector are still riddled with problems due to outdated infrastructure and lack of investment in less economically active parts of the country. Transport infrastructure in India is relatively better developed in the southern and southwestern parts of the country.

The major challenges facing the sector are:

  • India’s roads are congested and of poor quality. Lane capacity is low - most national highways are two lanes or less. A quarter of all India's highways are congested. Many roads are of poor quality and road maintenance remains under-funded - only around one-third of maintenance needs are met. This leads to the deterioration of roads and high transport costs for users. Rural Bike
  • Rural areas have poor access. Roads are significant for the development of the rural areas - home to almost 70 percent of India's population. Although the rural road network is extensive, some 33 percent of India’s villages do not have access to all-weather roads and remain cut off during the monsoon season. The problem is more acute in India's northern and northeastern states which are poorly linked to India’s major economic centers.
  • The railways are facing severe capacity constraints. All India’s high-density rail corridors face severe capacity constraints. Also, freight transportation costs by rail are much higher than in most countries as freight tariffs in India have been kept high to subsidize passenger traffic.
  • Urban centres are severely congested. In Mumbai, Delhi and other metropolitan centers, roads are often severely congested during the rush hours. The dramatic growth in vehicle ownership during the past decade - has reduced rush hour speeds especially in the central areas of major cities.
  • Ports are congested and inefficient. Port traffic has more than doubled during the 1990s and 2000s. This is expected to grow further to about 1,758 MMT by 2017. India's ports need to significantly ramp up their capacity and efficiency to meet this surging demand.
  • Airport infrastructure is strained. Air traffic has been growing rapidly leading to severe strain on infrastructure at major airports, especially in the Delhi and Mumbai airports which account for more than 40 percent of nation’s air traffic.

Key Government Strategies

Major improvements in the sector are required to support India’s continued economic growth. The demand for transport infrastructure and services has been rising by around 10% a year with the current infrastructure being unable to meet these growing demands. According to Goldman Sachs, India will need to spend US$ 1.7 trillion on infrastructure projects over the next decade to boost economic growth.

The Indian Government has identified various deficits in transport sector which include inadequate roads/ highways, old technology, saturated routes and slow speed on railways, inadequate berths and rail/ road connectivity at ports and inadequate runways, aircraft handling capacity, parking space and terminal building at airports. Government aims to modernize, expand, and integrate India’s transport services. It also seeks to mobilize resources for this purpose and to gradually shift the role of government from that of a producer to an enabler. In recent years, the Government has made substantial efforts to tackle the sector’s shortcomings and to reform its transport institutions. These include:

  • Increasing public funding for transportation in its Five Year Plans.
  • Launching the ambitious National Highway Development Program. It includes improved connectivity between Delhi, Mumbai, Chennai and Kolkata, popularly called the Golden Quadrilateral, in the first phase, North- South and East- West corridors in phase two, four laning of more than 12,000 km in phase three, two laning of 20,000km and six laning of 6,500 km respectively in phase four and five, development of 1,000km of expressway in phase six and other important highway projects in phase seven.
  • Accelerated Road Development Program for the North East Region to provide road connectivity to all State capitals and district headquarters in the region.
  • Financing the development and maintenance of roads by creating a Central Road Fund (CRF) through an earmarked tax on diesel and petrol.
  • Operationalising the National Highway Authority of India (NHAI) to act as an infrastructure procurer and not just provider.
  • Improving rural access by launching the Pradhan Mantri Gram Sadak Yojana (Prime Minister’s Rural Roads Program).
  • Reducing the congestion on rail corridors along the highly trafficked Golden Quadrilateral and improving port connectivity by launching the National Rail Vikas Yojana (National Railway Development Program)
  • The development of two Dedicated Freight Corridors from Mumbai to Delhi and Ludhiana to Dankuni.
  • Improving urban transport under Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
  • Upgrading infrastructure and connectivity in India’s twelve major ports by initiating the National Maritime Development Program (NMDP).
  • Privatization and expansion of the Mumbai and New Delhi Airports and development of new international airports at Hyderabad and Bangalore.
  • Enhancing sector capacity and improving efficiencies through clear policy directive for greater private sector participation. Large parts of the NHDP and NMDP are to be executed through public private partnerships (PPP).

For more details, visit the Aviation Overview, Ports Overview, Railways Overview, Roadways Overview

Indian Telecom Network

Telephony was introduced in India in 1882. Today India operates the 2nd largest telecommunications system in the world. The telecom industry has contributed significantly towards India’s economic as well as social development. Indian telecom industry has been able to offer the lowest tariffs in the world due to government policies and the intense competitive environment that prevails in the sector. Airtel, Vodafone, Idea, Uninor, Reliance, Tata DoCoMo, BSNL, Aircel, Tata Indicom and MTNL are the major operators in India. India's public sector telecom company BSNL is the 7th largest telecom company in world.

The total number of telephones in India stands at 1006.96  million (June 2015), while the overall teledensity has increased to 79.98% as of end June 2015. A significant proportion of growth in the subscriber base has been due to a surge in wireless communication. The total numbers of mobile phone subscribers have reached 980.81 million as of June 2015. The mobile tele-density had increased to 77.90% in June 2015. In the wireless segment, 5.02 million subscribers were added in June 2015. The wire line segment subscriber base stood at 26.15 million. Private operators hold 91.75 per cent of the wireless subscriber market share whereas BSNL and MTNL, the two PSU operators hold only 8.25 per cent market share. Subscriber number hit a peak in June 2012 but has since declined. The decline in telecom user base after June 2012 has been primarily due to the removal of inactive mobile telephone connections by service providers.

Telephone statistics

Country code (Top-level domain): IN

    Telephone subscribers (wireless and landline)
    1006.96  million (June 2015)
    Land lines
    26.15  million (June 2015)
    Cell phones
    980.81  million (June 2015)
    Monthly cell phone addition
    5.02  million (June 2015)
    Internet service providers (ISPs) & hosts
    6,746,000 (2012)
    79.98% (June 2015)

Teledensity in India has witnessed substantial improvement backed by robust growth in subscriber base. While the teledensity has improved substantially to 79.67% by end of May 2015 from just above 2% in FY99, there still exists a huge digital divide between the urban and rural areas. On one hand the urban teledensity at 148% indicates a saturating urban market and on the other hand teledensity of 48% in rural areas points to a huge potential for growth in the telecom industry.

India has one of the most competitive and fastest growing telecom network in the world with its high population and development potential. The Indian telecom sector offers opportunities in various areas, such as rural telephony, 4G, virtual private network, value-added services, et al. The telecom industry in India has emerged as the third highest recipient of FDI – a clear indication that the sector has tremendous potential. India’s high potential in telecommunications will eventually be realised on the back of improving telecom infrastructure, favourable investment climate, competitive tariffs, positive reforms and policy focus on increasing rural telecom coverage.

As the rural market still remains underpenetrated, this is a substantial opportunity for further growth and service providers are expected to tap into this in the future. Combined with the proliferation of newer technologies involving wireless communications and initiatives such as e-Agriculture, e-Health, e-Education, and rural BPOs, telecom penetration in rural areas is likely to increase manifold.

The lack of telecom infrastructure in rural areas, lowering telecom tariffs, falling ARPU of telecom service providers, lack of telecom infrastructure in semi-rural and rural areas, could inhibit the future growth of the industry.

Telephone system

India is divided into several zones, called circles (roughly along state boundaries). Government and several private operators run local and long distance telephone services. It was thrown open to private operators in the 1990s. Competition has caused prices to drop and calls across India are one of the cheapest in the world. The rates are supposed to go down further with new measures to be taken by the Information Ministry.

Fully automatic International Subscriber Dialing (ISD) service is available to almost all the countries. In the field of International communications, progress has been made by the use of satellite communication and submarine links. The voice and non-voice telecom services include data transmission, facsimile, mobile radio, radio paging, V-SAT and leased line services to cater to variety of needs, both residential and business. A dedicated Packet Switched Public Data Network (I-NET) with international access for computer communication services is also available.


In India, landline services were earlier run by BSNL/ MTNL and later by several other private players too, such as Airtel, Reliance Communications, Tata Teleservices. Landlines are facing stiff competition from mobile telephones. The competition has forced the landline services to become more efficient. The landline network quality has improved and landline connections are now usually available on demand, even in high density urban areas.

Mobile cellular

The mobile telephone network has aggrandized greatly since 2000. The number of mobile phone connections crossed fixed-line connections in 2004. India primarily uses the following bandwidths for cellular connectivity: 2G networks operate in GSM 900 MHz & 1800 MHz and CDMA 1XRTT 800 MHz bands; 3G networks operate in HSPA 900 MHz & UMTS/HSPA 2100 MHz and CDMA EVDO 800 MHz bands while 4G networks operate in LTE 800/1800/2300 MHz bands. The dominant players are Airtel, Vodafone, Idea Cellular, Reliance Communications, Tata DoCoMo, Reliance Infotel and state run BSNL/ MTNL. There are other smaller players like Aircel, Videocon, MTS, Uninor etc with operations in only a few states. International roaming agreements exist between most operators and many foreign carriers. The data reported by service providers indicates that rural India is emerging as the growth driver. Mobile services subscriber base in rural areas increased to 382.50 million in September 2014 from 374.96 million in February 2014.

Dialing system

On landlines system, intra circle calls are considered local calls while inter circle are considered long distance calls. Government is now working to integrate the whole country in one telecom circle. For long distance calls, you dial the area code prefixed with a zero (e.g. for Delhi, you would dial 011-XXXX XXXX). For international calls, you would dial "00" or "+" and India code+area code+number. India code for India is 91.

Visitor Location Register (VLR)

Out of the total 930.20 million wireless subscribers, 812.11 million were found active in September, 2014. The total active VLR number excludes the CDMA VLR figure of BSNL, as the service provider has not provided the VLR figures corresponding to their total CDMA subscriber base. The proportion of VLR subscribers is 87.30% of the total wireless subscriber base reported by the service providers.

Internet users

Number of Internet users in India is the 2nd largest in the world next only to China and has reached 354 million by the end of June 2015. Though the number of internet users is high, internet penetration at 25% is still much lower than most countries across the globe. The latest figure indicates that India has more internet users than the population of the US.

According to the report published by the Internet And Mobile Association of India (IAMAI), the internet users in India has grown 17% in the initial 6 months of 2015, adding 52 million new users. In 2014, between January and December, India recorded the fastest yearly growth rate of 32%, to 302 million, in the internet users base. It took almost 10 years for internet user base to grow from 10 million to 100 million. However, in the following three years, the industry added another 100 million and crossed 200 million user mark. In October 2013, the total number of internet users in India reached 205 million and in the following 14 months, the country added another 100 million new users, crossing 300 million users mark in December last year.

The milestones clearly indicate the massive growth of internet users in India; it was also reflected in other sectors like digital commerce, social media, digital advertising, and payments. The unprecedented growth in the internet user base helped eCommerce industry of India to grow by multifold. Startups like Flipkart, Snapdeal, Amazon and many other online eStores recorded over 100% YoY growth in their GMV (Gross Merchandise Value) and valuation.

Broadband subscribers

Broadband in India is defined as 512kbit/s and above by the government regulator (New definition of Broadband notified on 18 July 2013). Total subscribers (wireline + wireless combined) were 75.73  million (June 2015). However, broadband penetration in India is substantially lower than international standards. Limited fixed line coverage, low PC adoption, cost of operation and maintenance, low penetration in urban and rural population, service pricing and low computer literacy has affected broadband penetration in India.

For more details, visit the Telecom Overview

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