That’s more than double the GDP it had when the country first joined the group of emerging economies in 2009 (alongside Brazil, Russia, China and later South Africa), at $1.3 trillion. What are the major industries and companies driving this growth in GDP, and rising alongside it? This time we’re highlighting the top 10 biggest companies in India, the world’s most populous democracy.
What Are the Biggest Public Companies in India?
India’s growth to one of the world’s most powerful economies came extremely quickly, considering it only became a federal republic in 1950. In 1951, the country was considered relatively impoverished compared to the Western world, with 361 million people, a per-capita income of just $64, and a literacy rate of 17%. By 2021, the population had surged to 1.2 billion, income rose to $1,498, and literacy climbed to 74%. And most of that growth was fueled internally, as the Indian government was largely protectionist until the 1990s. Today, its free market policies and wide cultural reach help bolster the country’s massive industrial, agricultural, and telecommunications industries. Here are India’s biggest public companies by market capitalization in October 2021: Topping the charts are two massive conglomerates, Reliance Industries with a market cap of $231 billion and Tata Group with a market cap of $187 billion. Reliance started in textile production before a string of oil discoveries and purchases saw it overtake state-owned oil enterprises in revenue. Now the conglomerate also has holdings in petrochemicals, retail, telecom, and mass media, making chairman and largest shareholder Mukesh Ambani the richest person in Asia with a net worth of $100 billion. But India’s largest conglomerate is Tata Group, with more than 25 subsidiaries in IT (its largest income source), airplanes, food and beverages, and industrials. Tata Motors is India’s largest vehicle manufacturer, and the owner of South Korea’s Daewoo and the UK’s Jaguar Land Rover.
India’s Top 10 Biggest Companies Mainly in Financials
Outside of major conglomerates and a well-known subsidiary, India’s top 10 biggest companies are concentrated in the financial sector. One of those is HDFC Bank with a market cap of $135.1 billion. An offshoot of the #6 ranked company Housing Development Finance Corporation, HDFC Bank is India’s largest private sector bank by assets. In total, financials make up six of India’s 10 biggest companies. In addition to HDFC, they include banking provider ICICI Bank (which also has subsidiaries in the UK and Canada), commercial lending company Bajaj Finance, and banks Kotak Mahindra Bank and State Bank of India (the country’s first national bank and its largest). But there were two non-financial companies bigger than most of India’s banks; Financial software developer and consultant Infosys and personal products company Hindustan Unilever, a subsidiary of British consumer goods giant Unilever. India is also an agricultural powerhouse—the world’s largest producer of milk and second largest of tea—but most of it is consumed internally by its sizable population. Agriculture accounts for 18.1% of the country’s GDP, behind services at 55.6% and the industrial sector at 26.3%. With more rapid economic growth on the horizon, India’s biggest companies list might shift over time. What other companies or industries do you associate with India? on Both figures surpassed analyst expectations by a wide margin, and in January, the unemployment rate hit a 53-year low of 3.4%. With the recent release of February’s numbers, unemployment is now reported at a slightly higher 3.6%. A low unemployment rate is a classic sign of a strong economy. However, as this visualization shows, unemployment often reaches a cyclical low point right before a recession materializes.
Reasons for the Trend
In an interview regarding the January jobs data, U.S. Treasury Secretary Janet Yellen made a bold statement: While there’s nothing wrong with this assessment, the trend we’ve highlighted suggests that Yellen may need to backtrack in the near future. So why do recessions tend to begin after unemployment bottoms out?
The Economic Cycle
The economic cycle refers to the economy’s natural tendency to fluctuate between periods of growth and recession. This can be thought of similarly to the four seasons in a year. An economy expands (spring), reaches a peak (summer), begins to contract (fall), then hits a trough (winter). With this in mind, it’s reasonable to assume that a cyclical low in the unemployment rate (peak employment) is simply a sign that the economy has reached a high point.
Monetary Policy
During periods of low unemployment, employers may have a harder time finding workers. This forces them to offer higher wages, which can contribute to inflation. For context, consider the labor shortage that emerged following the COVID-19 pandemic. We can see that U.S. wage growth (represented by a three-month moving average) has climbed substantially, and has held above 6% since March 2022. The Federal Reserve, whose mandate is to ensure price stability, will take measures to prevent inflation from climbing too far. In practice, this involves raising interest rates, which makes borrowing more expensive and dampens economic activity. Companies are less likely to expand, reducing investment and cutting jobs. Consumers, on the other hand, reduce the amount of large purchases they make. Because of these reactions, some believe that aggressive rate hikes by the Fed can either cause a recession, or make them worse. This is supported by recent research, which found that since 1950, central banks have been unable to slow inflation without a recession occurring shortly after.
Politicians Clash With Economists
The Fed has raised interest rates at an unprecedented pace since March 2022 to combat high inflation. More recently, Fed Chairman Jerome Powell warned that interest rates could be raised even higher than originally expected if inflation continues above target. Senator Elizabeth Warren expressed concern that this would cost Americans their jobs, and ultimately, cause a recession. Powell remains committed to bringing down inflation, but with the recent failures of Silicon Valley Bank and Signature Bank, some analysts believe there could be a pause coming in interest rate hikes. Editor’s note: just after publication of this article, it was confirmed that U.S. interest rates were hiked by 25 basis points (bps) by the Federal Reserve.
