The Indian government supports a mixed economy, most of which is in the control of private enterprise. Under a policy announced in 1956, the government undertook a plan to nationalize entire segments of the economy, while leaving other sectors subject to varying degrees of government planning and control. Nearly 250 corporations are owned by the state today.
Agriculture is the mainstay of the majority of the population in India. A far-seeing agricultural policy initiated in the 60s resulted in a green revolution in India. With extensive cultivable regions, a comprehensive network of irrigation facilities, and valuable stands of timber, today India is not only self-sufficient in foodgrains but also exports its crops. India has the largest area in the world under pulse crops and is also the first in the world to evolve a cotton hybrid.
India has a well developed banking system that is government-regulated and largely government-owned. The Reserve Bank of India, founded in 1935 and nationalized in 1949, is India's principal banking institution. It regulates the circulation of bank notes, manages the country's reserves of foreign exchange, and operates the currency and credit system. Fourteen of the country's largest commercial banks were nationalized in 1969 and by 1980, most of the country's commercial banking passed into the public sector. Other banks have been established by the central government to provide credits promoting various types of industry and foreign trade. Many foreign banks maintain branch offices in India, and Indian banks maintain offices in numerous foreign countries. The rupee, India's basic monetary unit, is divided into 100 paisa (approx. 43 rupees equal U.S.$1).
India's manufacturing sector is highly diversified and includes a range of heavy- and high-technology industries, largely under government ownership. Consumer-goods industries are more commonly privately owned. The country's chief manufactures include textiles, iron and steel, cement, fertilizers, other chemicals, automotive vehicles, ships, bicycles, textile and other machinery, electrical appliances and electronics, and pharmaceuticals. Electricity is generated mainly by thermal and secondarily by hydroelectric installations. Labour unions, generally affiliated with various political parties, are important in the modern sectors of the economy. India's chief trading partners include the United States, Japan, the United Kingdom, Russia, Germany, and Saudi Arabia.
Domestically supplied minerals form an important underpinning for India's diversified manufacturing industry, as well as a source of modest export revenues. The nationalization of many foreign and domestic enterprises and the government initiation and management of others have given the Indian government a predominant role in the mining industry. India ranks among the world leaders in the production of iron ore, coal, and bauxite and produces significant amounts of manganese, mica, dolomite, copper, petroleum, chromium, lead, limestone, phosphate rock, zinc, gold, and silver.
Initially, stock exchanges did not play the prominent role in India in the way that they do in more affluent capitalist societies. However, today one can find vibrant stock exchanges in most of the largest Indian cities and they facilitate the flow of capital in the form of securities under rules set down by the Ministry of Finance. India's trade links are worldwide. The United States and the former Soviet Union have been the principal destinations for India's exports (often, in the latter case, under barter arrangements), while Japan and the countries of the European Community (EC), especially Germany and the United Kingdom, have also been important. The main import sources have been Japan, the United States, the EC, the Middle East, and the former Soviet Union. Today, the United States is India's leading trading partner, receiving about 16 percent of India's yearly exports and supplying about 10 percent of its imports.
India, at independence, had a superior transportation system. In the decades that followed, she built steadily on that base, and railroads in particular formed the sinews that initially bound the new nation together. Although railroads have continued to carry the bulk of goods traffic, there has been a steady increase in the relative dependence on roads and motorized transport. India has a broad network of railroad lines, the largest in Asia and the fourth largest in the world, all of which are publicly controlled. The major Indian ports, including Calcutta, Bombay, Madras, and Vishakhapatnam, are reached by cargo carriers and passenger liners operating to all parts of the world. A comprehensive network of Indian-operated air routes connects the major cities and towns of the country. International connections are maintained by Air India, Indian Airlines, and foreign air-transport services.