• Total prison population: 304,893 prisoners
• Crime trend: Down 3% in 1999

Crime rates

Interreligious violence is sporadic but serious. Attacks on Christians drew particular attention, but were overshadowed by Hindu–Muslim violence in Gujarat in 2002. Security forces gained increased powers that year under the Prevention of Terrorism Ordinance, passed in response to Kashmiri separatist attacks in Delhi and other cities.

Violent crime is increasing, especially in the big cities. Gangs have made vast profits from smuggling, prostitution, narcotics, and protection and extortion rackets. Theft has risen as consumer spending increases. The first execution for 13 years was carried out in 2004.

Dacoits still operate in large areas of central India. Modeled on the thugee gangs of the 19th century, they are outlaws who live by highway robbery and terrorizing small rural communities.

• Annual defense budget: $13.1bn

INDIAN ARMED FORCES

• Army: 3898 main battle tanks (700 T-55, 1900 T-72 M1, 1200 Vijayanta, 84 T-90S) (1.1m personnel)
• Navy: 19 submarines, 1 carrier, 8 destroyers, 16 frigates, 4 corvettes, 45 patrol boats (55,000 personnel)
• Air force: 744 combat aircraft (64 Jaguar S(I), 407 MiG-21/23/27/29, 40 Mirage 2000H/TH) (170,000 personnel)
• Nuclear capability: Capability undisclosed; weapons tested in 1998

India considers a nuclear deterrent to be vital, and publicly tested weapons in 1998. It has the world's third-largest military, and produces its own hardware. In 2001 the Agni-II intermediate-range missile, which is able to carry a nuclear warhead anywhere in Pakistan, went into production, while the long-delayed Light Combat Aircraft began flight tests. Virtual nuclear tests became possible in 2003 with the construction of the Param Padma supercomputer. India aims to send its own probe to the Moon in 2008.

• Gross National Product (GNP): $495bn

Score card

• World GNP ranking: 11th
• GNP per capita: $470
• Balance of payments: $4.66bn
• Inflation: 2.9%
• Unemployment: 9%

Exports

Imports

Economic performance indicator

Strengths

Massive home market of over one billion people. Cheap labor. Call centers outsourced from Western countries. Pool of highly skilled workers, encouraging high-tech industries such as software programming. Bollywood film industry. Highly efficient textile sector and garment manufacturers. Growing competitiveness in world market, reflected in strong export growth. Competition encouraging improvement in manufacturing standards. Despite strong objections from opposition parties, India ratified the GATT world trade agreement in 1995.

Since the economy was opened up to foreign competition in 1991, foreign direct investment has risen massively. Much of this has gone into the power sector. Large multinationals, such as Coca-Cola and IBM, are expanding, despite some hostility while the BJP was in government to the growing presence of foreign businesses.

Weaknesses

A large budget deficit dogs the economy. Governments have found it politically difficult to move away from the old system of widespread subsidies. The value of the rupee has declined sharply. Poor communications systems and power shortages hinder growth. The prestige of Bollywood has been damaged by allegations of underworld connections.

Profile

India has the fastest-growing economy in Asia after China. From a highly protectionist mixed economy, which succeeded in building the basis of a modern industrial state, India has to a large extent converted to a free-market economy and is entering the global marketplace. Wide-ranging reforms, from lowering trade barriers to attracting foreign investment, have been put in place. The left-wing governments in power from 1996 to 2004 did not undo these reforms, though they were criticized for not driving them forward wholeheartedly. Meanwhile, in the rural economy millions are grappling with the problems of subsistence farming. Recovery from the December 2004 tsunami will further tax resources.