India Government and Economics Essay

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Government Type

India is a parliamentary republic, the largest democracy in the world with over a billion people and counting.

Head of State

The head of state is a ceremonial position occupied by the President. The current President is Ram Nath Kovind, and vice president is M. Venkaiah Naidu, positions held since July-August of 2017 (CIA World Factbook, 2018). The president is elected by an electoral college, which is comprised of appointed members of both houses of parliament as well as members of state legislatures (CIA World Factbook, 2018).The President serves for a five year term, and there are no term limits on the position.

Far more important a role than president is held by the head of government, the Prime Minister. Members of parliament of the majority party elect the Prime Minister. The current Prime Minister of India is Narendra Modi, who was elected in 2014. Modi is leader of the Bharatiya Janata Party (BJP). The next legislative election will be held in 2022 (CIA World Factbook).

Views on Trade

India has an enthusiastic, growing, burgeoning economy. Focusing on the positives, India’s economy is highly diversified and well poised for the information technology and service sectors as well as traditional manufacturing and agriculture. Since the 1980s, India has liberalized its economy steadily and continues to improve. Deregulation of most major industries and privatization of formerly state-owned enterprises has helped India join the free market economy with ease (CIA World Factbook, 2018). Although India once had tight controls on foreign trade and exorbitant tariffs, that is not the case anymore. Since the 1990s, India’s economy has grown rapidly—with GDP growth at about 7% per year—because of relaxed controls on foreign trade (CIA World Factbook, 2018; World Bank, 2018). Currently, the European Union is actually India’s number one trading partner, accounting for 13.5% of India's overall trade with the world in 2015-16 (European Commission, 2018). China and the United States are a close second.

India’s India Central Board of Excise and Customs controls tariffs, which do fluctuate in response to market conditions. For example, in November of 2017, India imposed a whopping 50% import tariff on Canadian peas (Nickel & Jadhav, 2017).
While it is understandable India might want to encourage more domestic pea production, “the short-term move to lift Indian market prices could impact India’s long-term food security needs,” (Nickel & Jadhav, 2017). India has also come a long way towards lifting import licensing requirements for “most consumer goods,” but some products continue to be heavily restricted—the biggest being motor vehicles (India Country Commercial Guide, n.d.). Therefore, India has liberalized and continues to liberalize trade but tariffs and other barriers to trade are proving to be major impediments.

Political Issues

India’s government under Modi has been remarkably stable, in large part due to the country’s increased openness with the rest of the world economically, and its commitment to democratic institutions. Modi has also made uprooting corruption a central goal of his administration (Goswami, 2017). India suffers from political strife in several areas, the most notorious of which is Jammu/Kashmir. Borders with Pakistan and China can be troubled, and India maintains a military presence in Bhutan in order to solidify its regional clout.


Unfortunately, corruption remains rampant in India. A recent survey ranked India as the most corrupt country in Asia (Goswami, 2017). Corruption indexes also place India in the bottom half of the world’s nations. Bribery is a primary concern, with the majority of citizens (7 out of 10) reporting bribing someone in almost every area of public service including public schools, police, and civil services (Goswami, 2017).

Role of Military

India has a strong military and also has nuclear weapons, and the country continues to invest in and improve its military capacity. The military is believed to be essential for ensuring India’s stability as it grows, to sustain economic development (Tyagi, 2006). India’s military also serves a….....

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Batchelor, T. (2017). India to introduce minimum wage for millions of workers. Independent.

CIA World Factbook (2018). India.

European Commission (2018). India.

Goswami, S. (2017). Study Finds India Is Asia's Most Corrupt Country, While Japan Comes In Last. Forbes.

Human Rights Watch (2018). India.
India Country Commercial Guide.

“India Country Profile,” (2018). BBC News.

Nickel, R. & Jadhav, R. (2017). Canada's peas acreage set to fall as top buyer India imposes tariff. Reuters.

Tyagi, S.P. (2006). India’s strategic environment and the role of military power. Carnegie Endowment for International Peace.

The World Bank (2018). The World Bank in India.


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