The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable state participation in strategic sectors. It is the world’s fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). According to the International Monetary Fund (IMF), on a per capita income basis, India ranked 142nd by GDP (nominal) and 125th by GDP (PPP).

From independence in 1947 until 1991, successive governments followed Soviet style planned economy and promoted protectionist economic policies, with extensive state intervention and economic regulation. This is characterised as dirigism, in the form of the License Raj.[45][46] The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India.

Since the start of the 21st century, annual average GDP growth has been 6% to 7%,[43] and from 2013 to 2018, India was the world’s fastest growing major economy, surpassing China.[49][50] Economy of the Indian subcontinent was the largest in the world for most of the recorded history up until the onset of colonialism in early 19th century. Share of Indian economy is 7.5% of world economy by PPP terms.

India has diplomatic relations with 201 states/dependencies around the globe, having 199 missions and posts operating globally while plans to open new missions in 2020–21 hosted by 11 UN Member States.

The Ministry of External Affairs (MEA), also known as the Foreign Ministry, is the government agency responsible for the conduct of foreign relations of India.

With the world’s third largest military expenditure, second largest armed force, fifth largest economy by GDP nominal rates and third largest economy in terms of purchasing power parity, India is a prominent regional power, a nuclear power, an emerging global power and a potential superpower. India assumes a growing international influence and a prominent voice in global affairs.

As a former British colony, India is a member of the Commonwealth of Nations and continues to maintain relationships with other Commonwealth countries. Since gaining independence from Britain in 1947, however, India is now classified as a newly industrialized country and has cultivated an extensive network of foreign relations with other states. As a member state of BRICS – a repertoire of emerging major economies that also encompasses Brazil, Russia, China and South Africa, India also exerts a salient influence as the founding member of the Non-Aligned Movement. In recent decades, India has pursued a more expansive foreign policy that encompasses the neighborhood first policy embodied by SAARC as well as the Look East policy to forge more extensive economic and strategic relationships with other East Asian countries. Moreover, India was one of the founding members of several international organizations—the United Nations, the Asian Development Bank, New Development BRICS Bank, and G-20, widely considered the main economic locus of emerging and developed nations.

India has also played an important and influential role in other international organizations like East Asia Summit, World Trade Organization, International Monetary Fund (IMF), G8+5 and IBSA Dialogue Forum. India is also a member of the Asian Infrastructure Investment Bank and the Shanghai Cooperation Organization.

Regionally, India is a part of SAARC and BIMSTEC. India has taken part in several UN peacekeeping missions, and as of June 2020, is the fifth-largest troop contributor. India is currently seeking a permanent seat in the UN Security Council, along with the other G4 nations.

India wields enormous influence in global affairs and can be classified as an emerging superpower.

The environment of India comprises some of the world’s most biodiverse eco zones. The Deccan Traps, Gangetic Plains and the Himalayas are the major geographical features. The country faces different forms of pollution as its major environmental issue and is more vulnerable to the effects of climate change being a developing nation. India has laws protecting the environment and is one of the countries that signed the Convention on Biological Diversity (CBD) treaty. The Ministry of Environment, Forest and Climate Change and each particular state forest departments plan and implement environmental policies throughout the country.

Corruption in India is an issue which affects economy of central, state and local government agencies in many ways. Corruption is blamed for stunting the economy of India. A study conducted by Transparency International in 2005 recorded that more than 62% of Indians had at some point or another paid a bribe to a public official to get a job done. In 2008, another report showed that about 50% of Indians had first hand experience of paying bribes or using contacts to get services performed by public offices.

In 2021 their Corruption Perceptions Index ranked the country in 85th place out of 180, on a scale where the lowest-ranked countries are perceived to have the most honest public sector. Various factors contribute to corruption, including officials siphoning money from government social welfare schemes. Examples include the Mahatma Gandhi National Rural Employment Guarantee Act and the National Rural Health Mission. Other areas of corruption include India’s trucking industry which is forced to pay billions of rupees in bribes annually to numerous regulatory and police stops on interstate highways.

India has a multi-payer universal health care model that is paid for by a combination of public and private health insurance funds along with the element of almost entirely tax-funded public hospitals. The public hospital system is essentially free for all Indian residents except for small, often symbolic co-payments in some services. At the federal level, a national publicly funded health insurance program was launched in 2018 by the Government of India, called Ayushman Bharat. This aimed to cover the bottom 50% (500 million people) of the country’s population working in the unorganized sector (enterprises having less than 10 employees) and offers them free treatment at both public and private hospitals.

For people working in the organized sector (enterprises with more than 10 employees) and earning a monthly salary of up to ₹21,000 are covered by the social insurance scheme of Employees’ State Insurance which entirely funds their healthcare (along with unemployment benefits), both in public and private hospitals. People earning more than that amount are provided health insurance coverage by their employers through either one of the four main public health insurance funds which are the National Insurance Company, The Oriental Insurance Company, United India Insurance Company and New India Assurance or a private insurance provider. All employers in India are legally mandated to provide health insurance coverage to their employees and dependents as part of Social Security in India.