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Until the middle of the 20th century, British investment and trade that was introduced by the British fueled India’s economy. When India gained its full independence in 1947, India was left to find their own means to financial stability. For this, India would have to turn to the World Bank to receive loans to build much-needed infrastructure, create viable international companies and fuel their industry. According to the IMF, India has the second largest labor force in the world with 486.6 million laborers. In order to reach this height, India had no choice but to ask for and receive loans from the World Bank. Since its independence, India has received hundreds of billions of dollars in loans and credit. Currently, India has about 26 billion dollars in loans and around 40 billion dollars in credit. Many of this loan money and credit has gone towards the infrastructure of India in order to begin construction of an economic stronghold within cities. In recent years, the money has gone towards agriculture, steel/ iron, railways and power. Many of the citizens within India do not even have the luxury of electricity due to the vast ruralness of India. Without the loans and credit of the World Bank, India would not be at its current economic level.
There are a multitude of circumstances that have led to the economic surge within India, but the main factor is loans and foreign investment. With the help of the international community, India has grown to the 11th largest economy in the world and the 3rd largest in Asia. Not only has India grown to become of the leading economies in the world, but also it is also the fastest growing. Due to its recent economic success, India has been able to pay back many of its previous loans. Until around 2010, India saw its economy grow at a rate of about 7-7.5% a year, but since then has settled. In 2014, it is expected that “the economy is to to expand by 5.
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Although India has received majority of its aid from the World Bank, India also relies upon Foreign Direct Investment; or FDI. The idea of FDI was not introduced in India until the early 1990’s. Since the introduction, it is believed that India has become one of the most valuable and important location to directly invest, only behind China. This FDI has allowed India to grow financially in a multitude of ways. The large scale of the FDI has ultimately led to large companies sprouting within India. Both the World Bank and FDI have led to the emergence of India’s economy.
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