<P> The economy of India is a developing mixed economy . It is the world's sixth - largest economy by nominal GDP and the third - largest by purchasing power parity (PPP). The country ranks 141st in per capita GDP (nominal) with $1723 and 123rd in per capita GDP (PPP) with $6,616 as of 2016 . After 1991 economic liberalisation, India achieved 6 - 7% average GDP growth annually . In FY 2015 and 2017 India's economy became the world's fastest growing major economy surpassing China . </P> <P> The long - term growth prospective of the Indian economy is positive due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy . India topped the World Bank's growth outlook for the first time in fiscal year 2015--16, during which the economy grew 7.6% . Growth is expected to have declined slightly to 7.1% for the 2016--17 fiscal year . According to the IMF, India's growth is expected to rebound to 7.2% in the 2017--18 fiscal and 7.7% in 2018--19 . </P> <P> India has one of the fastest growing service sectors in the world with an annual growth rate above 9% since 2001, which contributed to 57% of GDP in 2012--13 . India has become a major exporter of IT services, Business Process Outsourcing (BPO) services, and software services with $154 billion revenue in FY 2017 . This is the fastest - growing part of the economy . The IT industry continues to be the largest private - sector employer in India . India is the third - largest start - up hub in the world with over 3,100 technology start - ups in 2014--15 The agricultural sector is the largest employer in India's economy but contributes to a declining share of its GDP (17% in 2013--14). India ranks second worldwide in farm output . The industry sector has held a steady share of its economic contribution (26% of GDP in 2013--14). The Indian automobile industry is one of the largest in the world with an annual production of 21.48 million vehicles (mostly two and three wheelers) in 2013--14 . India had $600 billion worth of retail market in 2015 and one of world's fastest growing e-commerce markets . </P> <P> The combination of protectionist, import - substitution, Fabian socialism, and social democratic - inspired policies governed India for sometime after the end of British rule . The economy was then characterised by extensive regulation, protectionism, public ownership of large monopolies, pervasive corruption and slow growth . Since 1991, continuing economic liberalisation has moved the country towards a market - based economy . By 2008, India had established itself as one of the world's faster - growing economies . </P>

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