India's industrial structure

India is a new emerging economy (NEE) found in southern Asia. It is the world's largest democracy, it has the second largest population and a rapidly growing economy.

Changing industry in India

There are four main types of jobs or industries in India. These are:

  • primary, which involves getting raw materials from the land, eg farming or forestry
  • secondary, which is making products out of raw materials, eg food processing and car manufacturing
  • tertiary, which is providing a service, eg doctors and teachers
  • quaternary, which means ICT and research, eg computer software designers and scientists

A country's industrial structure is the percentage of people working in each job type. Changing the balance between these four sectors of industry can help a country to develop.

Up until the 1980s, India's main type of industry was primary. Many people were subsistence farmers, which is not very profitable. From the late 1980s, the Indian government encouraged foreign transnational corporations (TNCs) to set up within the country. Factories were built and secondary jobs in manufacturing were created. Factory workers earn more money, which means that they can afford to pay people for services, such as entertainment and healthcare. Workers in the tertiary (service) sector are paid more than in primary and secondary.

The additional wealth generated from the changing industrial structure in India has created a multiplier effect - as one thing improves, it allows other things to improve too.

The multiplier effect: TNCs set up factories, factory workers spend money locally, local services have more trade, government receives more tax, government invests in infrastructure.The multiplier effect