India is the second most populous country in the world, with an estimated annual growth rate of about 1.7% in 1996.
· Currently estimated at 950 million, India's population is expected to reach 1.15 billion by 2010.

· Population density is highly uneven, with the country's three largest states (Uttar Pradesh, Bihar, and West Bengal) located in the North. Although cities such as Greater Bombay and Delhi are home to more than 10 million persons each, the vast majority of India's population lives in rural areas. Average population density in the country is about 520 per square mile.

· About three-quarters of the population lives in rural areas.

Although industry and commerce constitute the basis of the Indian economy, agriculture employs the majority of the labor force.
· Important Indian industries include textiles, chemicals, food processing, steel, transportation equipment, machinery, cement, coal, and oil.

· About 70% of the labor force is engaged in agriculture and cultivation.

· About 15% work in industry and 20% in services, but these respective shares are increasing.

About three-quarters of India's population is of Indo-Aryan origin. Smaller percentages are of Dravidian or Mongol descent.
· India is predominantly Hindu (83%), but Muslims (11%), Christians (3%), Sikhs (2%), Buddhists, and Jains represent important minority religions. For Hindus, the cast system still plays an integral role in society, although upward social and economic mobility for lower castes is more prevalent now than in the past.

· Hindi is India's official language and is spoken by approximately one-third of the population. There are more than a dozen "official" languages in India. English is an "associate" language, but is the primary language for business, commerce, and politics. At least two dozen languages are spoken each by a million of more persons.

Following its victory in the 1996 national elections, the United Front coalition, which comprises 13 regional parties, now rules India.
· In April 1997, the Congress (I) Party, which has ruled India for most of its post-independence years, temporarily withdrew support from the United Front coalition until a new Prime Minister was named. In late April 1997, I.K. Gujral replaced H.D. Deve Gowda as Prime Minister of India.

Since the shift from socialism in 1991, India's gross domestic product (GDP) has experienced strong growth rates of between 4.5 - 7 % per year.
· In 1995, India's real GDP grew about 6.3% and its GDP per capita (1987 US$) reached $405, up from $388 in 1994.

· India's GDP is forecast to grow by 7% - 8% annually through 2010.

Continued economic growth, fiscal deficit reduction, agricultural and financial sector reform, and boosted foreign direct investment are the government's top economic priorities.
· Upon taking control of the Parliament in June 1996, the United Front released the Common Minimum Program (CMP), which outlined the government's political and economic agenda.

Agriculture accounts for roughly a quarter of national output.
· India's growing manufacturing sector contributes another 20% of GDP. The services sector, which includes commerce, transportation, defense, and financial markets, also plays an important role, accounting for almost 40% of national output.

· Economic development is proceeding much more rapidly in India's northern, industrial centers. Southern, coastal areas are generally poorer and rely more on subsistence agriculture.

While India has boosted its international trade in 1990s, its trade still remains relatively small when compared to the country's size. In 1996, trade totaled $72.2 billion ($34.6 billion in exports plus $37.6 billion in imports). Due to rising imports and industrialization, India's foreign debt has risen rapidly and surpassed $100 billion in 1996.
· India's trade deficit has increased from $0.3 billion in 1993 to $3.6 billion in 1995.

· India's major exports in 1995 were manufactured goods (78%), agricultural and related products (17%), ores, minerals, fuels, and lubricants. Major imports included crude oil and related products (20%), chemicals, fertilizer, and machinery.

· India's chief trading partners are Russia, the United States, Germany, the United Kingdom, and Japan.

To help promote trade, India's Foreign Investment Promotion Board has instituted a shorter approval process for foreign direct investment proposals and also has outlined new guidelines for 100% foreign ownership of new ventures.

India continues to retain sizable tariffs on imported consumer goods and other items, although most volume restrictions on machinery and industrial equipment have been lifted. India's import tariff policy has received criticism from the International Monetary Fund and the World Trade Organization.

In 1995/96, India exported $5.4 billion worth of goods and services (about 17% of total exports) to the United States. In the same fiscal year, India imported $3.3 billion of goods and services (about 9% of total imports) from the United States.
· In 1996/97, the U.S. trade deficit with India is expected to narrow to $1.8 billion, down from $2.2 billion in 1995/96.

The United States is India's largest trade and investment partner. Trade relations between the two countries have remained strong partly due to visits by high-level officials such as Indian Prime Minister Narasimha Rao (1994), U.S. Energy Secretary Hazel O=Leary (1994&1995), and U.S. Commerce Secretary Ron Brown (1995&1996) to each others= respective countries.
· According to the U.S. Department of Commerce, top commercial prospects for U.S. energy businesses in 1996/97 include equipment and machinery related to the electronic, scientific, oil, gas, mining, power, telecommunications, and aircraft industries.

U.S. exports have benefited from sizable reductions of India's import licensing requirements. All sectors of the Indian economy are open to investment, except for those relating to security issues (e.g. - defense, railways, and nuclear energy). While the United States and India have not negotiated a bilateral investment treaty, an existing agreement outlines the operation of the U.S. Overseas Private Investment Corporation (OPIC).

Major U.S. exports to India include high-technology equipment and machinery, aircraft parts and avionics, scrap metal, and fertilizers. Indian exports to the United States consist primarily of jewelry, textiles, iron and steel products, and cashew nuts.
· U.S. firms are very active in India's energy sector. Enron is undertaking a $2.8-billion project at Dabhol, Maharashtra. In the oil and gas sectors, companies such as Chevron, Occidental, Amoco, Texaco, Phillips, Enron, and Mobil have participated in recent licensing rounds and in talks with the government concerning natural gas import opportunities.

India's energy consumption per unit of output is still rising, but is expected to level off and to decline in the future.
· India consumes two-thirds more energy per dollar of gross domestic product (GDP) as the world average.

· India's energy/GDP ratio is expected to fluctuate only slightly between 1980 and 2010. After 1998, India's energy/GDP ratio will begin to decline, but will be at roughly the same level in 2010 as it was in 1980.

India's per capita energy consumption is low, but rising.
· India consumes only about 18 percent of the energy per person as the world average.

· India's per capita energy consumption is projected to grow from 6.2 million Btu in 1980 to 18.2 million Btu in 2010 -- a rise of almost 300 percent. Coal will remain the primary fuel in India's energy profile, accounting for more than half of total energy consumption in 2010 on a Btu basis.

A consequence of India's rapid economic growth has been severe air and water pollution, deforestation, water shortages, and carbon emissions.
· India accounts for about 3.5% of world carbon emissions. The country's carbon emissions are rising rapidly as industrialization occurs. Between 1986 and 1995, India's carbon emissions rose 40 percent.

· Sulfur dioxide levels in nearly all Indian cities greatly exceed international standards. There are also inordinately high levels of airborne particulates in large Indian cities. This is due to transportation sector growth and the wide-spread use of coal as a fuel.

India is slowly taking steps to address its environmental problems.
· The Indian government recently announced draft vehicle emission restrictions that will apply to all motor vehicles manufactured after April 1, 2000. However, proposed target levels for carbon monoxide and nitrogen oxide are still well above statutory levels in the United States and Europe.

· The high ash content of India's coal has led to increased air pollution. The Indian government recognizes the importance of Clean Coal Technology and is attempting to find financially viable ways to implement this new technology.