Indian Market

The Indian Market encompasses the features of both capitalism and a socialistic market economy. The Indian economy from its initial stages of five year plans in the 1950’s and limited private participation has now effectively adopted the virtues of a laissez-faire economic model in various sectors which is getting transformed into consistently higher growth rates for the economy. The Indian economy, long operating as a mixed economic model has become more and more liberalized with the onset of globalization. The Indian economy is ranked fifth largest in the world if measured by Purchasing Power Parity (PPP). It is also the second largest among the emerging economies after China. The Indian market model is akin to the market socialism followed so effectively by Germany especially after the unification of East and West Germany. The model followed in Germany is known as “Soziale Marktwirtschaft.â€

The Indian market philosophy is closely linked with the doctrines of an all inclusive development due to the large number of poor present in the country. The Indian market fails to don the shape of a totally free market economy which would jeopardize the livelihood of sizable proportion of the population who find it difficult to put together two square meals per day. Thus various trade barriers exist to prevent Indian producers from being thrown open to cheap foreign made products. The pricing in the Indian market system largely depends on the interaction between the forces of demand and supply and the prices are not administered by the government. This makes the Indian market system different from a totally planned economy where the decision of what to produce, how much to produce and for whom to produce are decided by the government or polity in question. The planned economy also has the feature that the means of production are controlled by the government and private individuals are debarred from having any ownership over those means.

The Indian economic structure functions on the lines of mixed economic model where the private sector coexists with the public sector hand in hand. While government control exists over the procurement of food grains at predetermined prices called the Minimum Support Price (MSP) from the farmers and the subsequent distribution of these food grains and pulses through the government set up called the Public Distribution System (PDS), a parallel open market for these food products also exist. Prices in the ration market, where the food grains are distributed by the PDS, are set by the government whereas those in the open market are determined through the bargaining powers exhibited by the buyers and sellers of the good in question. In a way, it can be said that India has enjoyed immense success from a being a mixed economy as the values of the free market have been adopted which has ensured that growth rate of GDP (Gross Domestic Product) has remained consistently above 6% over the recent years. The standards of living have improved and limited competition from foreign-made goods has made the standards of products produced in India only better.

Some of the key markets in India include:

• Food sectors comprising of the wheat, rice, pulses and the wheat sector
• Spice market
• Market for Fast Moving Consumer Goods (FMCG)
• Leather Market
• Food Processing Sector
• Gems and Jewellery market
• Insurance and Financial Services Market
• Beverage markets for tea and coffee

Some of the key features of the Indian Economy include:

Increasing share of the service sector in the country’s GDP which almost equals half of its share except the total of the agricultural and industrial sector.

Rising per capita incomes in both the urban and rural areas. In 2005, almost 170-300 million had growing purchasing power showing a more solvent middle-class. They are estimated to be growing at 5% annually.

The Indian workforce is one of the youngest in the world with 58% of the population aged less than 20. This places the country with a significant comparative advantage in terms of human resource edging out most of the developed countries.However, these advantages for the Indian economy can be capitalized more if adequate steps are taken to increase the participation of FDI (Foreign Direct Investment) in the infrastructural sectors of the economy and overhauling the rigmarole of the bureaucratic hassles and political uncertainty faced by firms or companies operating in India.