India’s Prime Minister Manmohan Singh, wants his country to achieve 10% economic growth in the next two to three years, to create more jobs and help lift a third of the country's 1.1 billion people out of poverty. Asia's fourth-biggest economy expanded 8% in the second and third quarters of 2005. Singh's government wants industrial production, which makes up a quarter of India's economy, to grow 10% annually to boost the incomes of Indians, one in three of whom live on less than $1 a day.
India’s industrial production grew at an annualized 8.3% rate between April and November 2005, faster than major economies like US, UK, the Euro zone, Japan, Brazil, Indonesia and Russia. Only China and Argentina recorded faster industrial production rates of 16.6%, and 9.6% respectively. On the global sphere, US industrial production grew only 2.8%, and the UK, the Euro zone, and Indonesia, saw declines of 2.4%, 0.8%, and 3.4% respectively in their overall industrial production.
Indian economists have observed an 86% correlation between industrial production and exports. But the Indian export sector does not dominate growth in the Indian economy, as in China and South Korea. The Indian economy is more about domestic consumer demand, which contributes nearly 70% to GDP, while exports contribute only 15% to India’s GDP. India ranked 24th among global importers purchasing $113 billion of goods in 2005, or about a sixth of Chinese demand.