Indian economy has performed well in 2006-07 as the annual growth in gross domestic product (GDP) reached at 9.4%, the fastest in the last 18 years. The growth rate is ahead of the earlier projection of 9.2%, and the previous year’s 9% growth. Manufacturing and services are the main drivers of this robust growth that compensated the slowdown in agriculture and construction. The manufacturing sector growth rate improved to 12% during the year, from 9.1% in 2005-06. Trade, hotels, transport and communication had a combined growth rate of 13% in 2006-07 against 10.4% in the previous year. The quarterly growth rate also improved sequentially, moving up at 9% in the fourth quarter of 2006-07, compared with 8.7% in the third quarter of the same fiscal.

India’s industrial production moved up 11.3% during 2006-07 recording the highest growth in the last 11 years, compared with 8.2% growth in 2005-06.

The stock market in India reached a historic mark in the last week of May 2007, when the aggregate market capitalisation of all the firms listed at the Bombay Stock Exchange (BSE), Asia's oldest bourse, crossed the mark of trillion dollars. The rising stock prices and the appreciation in the Rupee both helped it to achieve this level. In the last 12 months, the combined market capitalisation of BSE has moved up 60% from $650 million. In the rupee terms, the rise is slightly modest in comparison, but still as high as 42% in the same period. In the first five months of this year, the market capitalisation has moved up 23% in dollar terms and 12% in rupee terms. The market value of Sensex, which represents the select 30 blue-chip listed companies, has also moved up at $465 billion to register a gain of about 59% in the last 12 months, and about 17% from the year-end of 2006.  

China has failed to dent the dominant position of India in the outsourcing business. Its offshore market still has a long way to go before it could become a potential alternative to India, according to a recent report by U.S.-based technology research firm Forrester Research. It highlights the fact that the country was widely viewed as the key challenger to India for offshoring two years back. The latest research by Forrester, however, shows that to date the market has not taken off as expected. Particularly, the offshore business from the U.S. and Europe has been slow to materialize. In fact, China's percentage of GDM resources for the top services firms like Accenture, a global management consulting, technology services and outsourcing company has dropped, while India and the Philippines have seen far greater investment. The consensus among interviewees was that China still has not overcome clients' concern about limited English skills, attrition and weak intellectual property protection, said the report.

India's engineering process outsourcing (EPO) business has been estimated to grow 10-fold to touch $30 billion by 2015, says a strategy paper released by the Engineering Export Promotion Council (EEPC), an industry body set up by the Ministry of Commerce. The country is expected to have a market share of 20%-27% of the $110 billion - $140 billion global EPO market by 2015. The estimated demand for engineering process outsourcing to India has grown at 30%-35% since 2004-06, making the country a major hub in this area.

There is a huge opportunity for British pharmaceuticals companies to invest in India in areas such as R&D alliances, contract research and manufacturing (CRAM), alliances for holding clinical trials in India, joint ventures for co-production of generics, distribution in India and the U.K., process outsourcing, co-marketing alliances and data processing and other shared services, according to a FICCI-Yes Bank report on ‘Strategic Knowledge and Economic Partnerships: India and U.K.’. The report will be released in the FICCI-IIFA Global Business Forum (GBF) at Leeds, U.K. on June 07, 2007. Federation of Indian Chamber of Commerce and Industries (FICCI), the industry body representing more than 250,000 business units, has identified healthcare & pharmaceuticals, automotive industry, infrastructure and financial services as the sectors with high potential for cooperation between Indian and the U.K. firms. It expects the trade between the two countries to reach at £1.5 billion by 2010, from the present level of about £900 million.

After making big-ticket acquisitions, Indian steel companies are also exercising the option of joint ventures to spread their presence across the globe. Tata Steel Ltd, the sixth largest steel company of the world, has signed an MoU with Vietnam Steel Corporation (VSC), Vietnam's largest steel company, for a proposed steel complex with an estimated capacity of 4.5 million tonnes per year. Tata Steel will have a stake of minimum 65% & VSC will have a stake of 35% in the $3.5 billion Steel complex. Moreover, Tata Steel will also have a stake of 30% in Thach Khe Iron Ore Joint Stock Company which will undertake mining in the Thach Khe iron ore mine. Although its future course of action will depend on the feasibility study and the financial closure, the project seems to be in line with Tata Steel's strategy of having manufacturing base in high growth markets with the local availability of raw material. The company has set the target of doubling its output to 50 million tonnes by 2012 through both organic and inorganic growth. The integration of U.K.-based Europe’s largest steel maker Corus Group Plc, which was acquired by Tata Steel Ltd for $12 billion four months ago, is also proceeding more quickly than the company had expected and may yield greater savings than planned, as indicated by the company recently.

India's diversified Essar Group has also planned to build a steel plant in Egypt with an investment of $590 million. Earlier, the Essar Group had announced setting up three steel plants in the Middle East, including a joint venture in Iran.