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Dear Students,
All in all there are several factors that influence the Indian economic environment and these include:
1) Capital flows and Stock Exchange Market.- India has had a very steady flow of capital from both foreign and local investors. In addition to this, the country also has a thriving stock market and this has helped it gain capital. With this amount of capital, India has less to worry about in case the GDP rates fall. This is because its currency can still get overvalued given its steady flow of capital.
2) Global currency trends of economically powerful countries- India like many other countries has economic and currency links with powerful countries such as US, UK, Japan, Canada and others. An appreciation of these currencies has similar effects on India’s currency. These global currency trends therefore influence India’s economic growth.
3) Political changes- Political setup in India also influences its economic development. A change in the country governance often leads to changes in economic policies especially with regard to importation and exportation of goods and services. Political changes also impact on the tax rates and may affect the investment climate which ultimately influences the economic growth rate of the country.
4)Energy and oil - India imports oil in large quantities. This is an essential commodity and it affects India’s economic growth rate. When crude oil prices in the world market fluctuate, India’s currency cannot remain stable. High oil prices result in high inflation rates hence overvaluing of India’s currency.

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India, a developing country, a country that attracts huge business because of its large population. Economic growth in India has been one of the many positives that have existed since its independence.


India witnessed in economic revolution in late 1980’s and early 90’s. Since then the economy has only grown and India is currently among the fastest growing GDP nations in the world.

There have been any recent blames on government about the economic slowdown but slowdowns like these are just an indication of the major changes that are about to come.

Well let us have a look at some of the factors that affect the Indian economy.

1) Capital flow and stock exchange Market.

India attracts investors. With such a huge population there is a huge chance for a thriving business opportunity. Owing to these factors the capital keeps flowing in India and the foreign exchange rates also help.

Even if the market falls, India has less to worry about as the currency will still be overhauled.

2) Political changes.

This is among the major factors that affect the economic growth in India. The new governance brings in new changes and new policies. These policies play a major role in changing the import/export scenario which in turn plays a major part in the economy.

The relation between the various foreign ministers also plays a very important role.

3) Global currency trends.

The currency of India is more or less interlinked with other major countries like USA, UK and Japan. If the domination value of these countries falls, then the value of INR is bound to fall.

Similarly, if the value rises, then it affects the Indian economy as so much money is dependent on foreign exchange.

Thus, foreign exchange is another major .

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