India is one of the oldest civilisations, with a rich cultural heritage. It is the second largest country in Asia and the seventh largest in the world. The country is home to a rich variety of religious and linguistic groups.

India is a union of twenty-five states and seven union territories. The Indian constitution is federal in nature with a distinct distribution of powers between the Central and State Governments. The distribution pertains to taxation, legislation and social sector areas. The system of governance is based on the Westminister model.

With a population of about 900 million, India is the second most populous country. It is a country of immense, yet unrealised potential. Like China, India is an untapped market - and one of the most exciting emerging markets in the world. A little over one quarter of the population live in urban areas. There has been rapid urbanisation in the country since 1971. Presently, 23 cities have a population of more than one million, with Bombay at 12.60 million being the most populous metropolis. The labour force has been estimated at about 315 million.

India has a five-year-plan that guides all economic activity. Indian industry is well diversified and is an important sector of the economy. It contributes about 28% to the GDP. Besides large and medium private sector units, many small industrial units and cottage industries contribute significantly to the vibrancy of this sector and to its dispersal throughout the country.

Over the last forty years, India's development programme has been based on self reliance and social equity. Industrial development was intended for import substitution and was closely guided by licensing, import controls and a high tariff regime. Infrastructure and heavy industries were reserved for the public sector, though private initiative played a significant role.

The Financial sector was dominated by government-owned financial institutions that regulated credit and capital mobilisation. Credit flow was determined by the developmental priorities laid down by the government.

This development strategy was successful in creating infrastructure and mobilising resources for growth in the initial years, but did not lead to growth rates achieved in certain other Asian economies. To correct the imbalances that had arisen in the economy, a stabilisation and restructuring programme was initiated in 1991. A host of fiscal, trade, industrial and financial sector reforms have also been launched to accelerate economic growth.

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