Separated from the rest of Asia by the Himalaya mountain range, India forms a subcontinent. As well as the Himalayas, there are two other main geographic regions, the Indo-Gangetic plain, which lies between the foothills of the Himalayas and the Vindhya Mountains, and the central–southern plateau. India is the world's largest democracy and second most populous country after China. The birthrate has recently been falling, but even at its current level India's population will probably overtake China's by 2030. After years of protectionism, India is opening up its economy to the outside world. The hope is that the free market will go some way to alleviating one of the country's major problems, poverty.

India is the world's second most populous country after China, officially passing the one billion mark in 2000. Despite a major birth control program, the decrease in population growth has been marginal. Nationwide awareness campaigns aim to promote the idea of smaller families. India's planners consider the rise in the population the most significant brake on development. Cultural and religious pressures encourage large families, however, and the extended family is seen as an essential security for old age.

The fertile rice-growing areas of the Gangetic plain and delta are very densely populated. The northern state of Uttar Pradesh has the largest population, followed by neighboring Bihar and the western state of Maharashtra. Maharashtra is also the most urbanized state, with more than half of its people living in towns or cities. Elsewhere, most Indians live in rural areas, although poverty continues to drive many to the swelling cities.

The overwhelming majority of the population are Hindus, who belong to thousands of castes and subcastes, which largely determine status, occupation, and whom they marry. Tension between Hindus and Muslims has grown in recent years and escalated sharply in 2002 following violent clashes in Gujarat.

Strengths

Massive home market of over one billion people. Cheap labor. Some of the workforce possess skills for new high-tech industries such as software programming, a major boom area of the economy. Vibrant film industry: "Bollywood." Highly efficient textile sector and garment manufacturers. Growing competitiveness in world market, reflected in strong export growth. Competition is encouraging firms to manufacture to international 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 went into the power sector. Large multinationals, such as Coca-Cola and IBM, are expanding, despite protests from some sections of the ruling BJP hostile to the growing presence of foreign businesses.

Weaknesses

Large budget deficit dogs the economy. Governments have found it politically difficult to move away from the old system of widespread subsidies. Value of rupee has declined sharply. Inflation compounded by rise in wholesale food prices. Poor communications systems and power shortages hinder growth.

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 United Front and BJP-led governments since 1996 have not undone these reforms, though they have been criticized for not being whole-hearted about driving them forward. Meanwhile, in the rural economy millions of people grapple with the problems of subsistence farming.

India is a multiparty democracy. The Lok Sabha (lower house) is directly elected by universal adult suffrage, while the Rajya Sabha (upper house) is indirectly elected by the state assemblies. There are 28 self-governing states. Of the seven union territories, Delhi and Pondicherry have their own assemblies.

Profile

The ascendancy of the Hindu nationalist BJP, in government since 1998, has relegated the C(I) to an unprecedented period of opposition at union level. The C(I) was founded in 1978 as successor to the historic Congress Party which led India to independence in 1947. Under P. V. Narasimha Rao's leadership in 1991–1996, a bold program of economic liberalization broke with the C(I)'s traditionally left-of-center policies. However, allegations of corruption undermined the party, resulting in heavy electoral defeats in 1996 and 1998. After April 1998 hopes for C(I)'s political revival rested on its president Sonia Gandhi, who, as the widow of the assassinated former prime minister Rajiv Gandhi, restored the influence of the Nehru family over the party.

In 1996 regional parties formed the core of a C(I) center-left United Front coalition government in power until 1997. However, the 1998 election established the BJP with a strong enough mandate to lead a coalition government headed by its leader, A. B. Vajpayee. Elections held in October 1999 returned the coalition to power with an overall majority.

Main Political Issues

Hindu militancy

The right-wing Hindu BJP has emerged as a credible alternative to the C(I). In 1996 it won the most seats in parliament, despite being tainted by corruption allegations. Although it failed on that occasion to form a viable administration, the BJP was returned to power in 1998 and 1999. Its rise has encouraged the spread of Hindu nationalism and raised fears about the future of India's secular constitution. In 2002 the BJP state government in Gujarat was accused by its critics of sanctioning mob attacks against the minority Muslim community in Ahmadabad during communal riots in the state.

Political corruption

Allegations of political corruption have dominated Indian politics. In 1989, the C(I) prime minister Rajiv Gandhi was accused of accepting bribes from a Swedish arms company. The C(I) was also implicated in a financial scandal in 1992. In 1996 corruption forced the resignations of several C(I) government ministers and the leader of the opposition BJP. The issue resurfaced in 2001 when the BJP government was implicated in a bribery scandal over arms sales, which led to the resignation of the defense minister.

The free market

The introduction of the free-market economy has been vigorously resisted. Critics contend that free trade will undermine local production, and that participation by foreign companies will damage the national economy. In the mid-1990s governments increased spending on rural development programs in order to soften the impact of economic liberalization. The BJP-led coalition, although more sympathetic to urban interests, is generally opposed to competition from foreign businesses.

The overriding preoccupation in foreign policy is the dispute with Pakistan over Kashmir, which has sparked two wars, in 1948 and 1965, and intensified the nuclear race between the two countries. In 1998 India carried out nuclear weapons tests, prompting Pakistan to follow suit and sparking international condemnation. Although the USA imposed sanctions against India for ignoring the ban on nuclear weapons testing, India has not yet signed the Comprehensive Test Ban Treaty. US sanctions were lifted in 2001 following India's support for the "war on terrorism."

High-level talks occasionally raise hopes of better relations with Pakistan, but border clashes stoke tensions. In 2002 a series of attacks across the line of control in Kashmir by Muslim militants, allegedly sponsored by Pakistan, pushed the two countries to the brink of war.

India considers the possession of a nuclear deterrent to be vital, and tested its own weapons in 1998. It has the world's fourth-largest army, and produces its own Arjun battle tank. The Agni-II intermediate-range missile, capable of carrying a nuclear warhead to all parts of Pakistan, was tested in 2001. Also that year a much-delayed jet fighter program reached test flight stages. However, the replacement of India's outdated foreign weaponry was disrupted by US sanctions between 1998 and 2001. Russia signed a $10 billion air defense deal in 2001.

India's most significant mineral exports are iron ore and cut diamonds. In addition, there are large coal reserves; India is the world's third-largest coal producer. The steel industry has been privatized. Steel imports are now subject to lower duties, but the industry has so far withstood external competition, and exports have increased. However, steel production, which consumes up to twice as much energy as the method used by some foreign competitors, is inefficient by international standards.

The state is currently unable to meet the country's demand for electricity. Petroleum and coal are the main sources of energy generation, although these are imported. A scheme in Maharashtra to increase output by attracting investment from the US-led consortium Enron was mired in controversy in the mid-1990s when the BJP state government temporarily suspended negotiations in response to nationalist groups opposed to foreign businesses.

Deforestation is one of India's most pressing environmental problems. Industrial and agricultural pressures have felled almost 90% of original forest cover. This results in major soil erosion, the silting up of dams, and landslides. Serious flooding in eastern states in 2000 was largely attributed to deforestation. On the other hand, dealing with water scarcities, such as the drought which affected much of the northwest in 2000, has become a major public policy issue.

India's state-owned railroad system, the largest in Asia, spans all the major cities. Rail carries 40% of passenger traffic and 65% of freight. Strict controls on diesel emissions from cars and buses to check pollution were enforced in 2001. Cycle and scooter rickshaws are common in urban centers. Kolkata (Calcutta) still has rickshaws pulled by hand.

Malnutrition is extremely common, increasing infant mortality, much of which is due to preventable diseases. Air pollution from the domestic use of solid fuel kills half a million children every year. AIDS has accelerated and HIV infection rates are rising. State governments are responsible for most health programs, but there are various national health projects, including a massive polio eradication program. The government announced plans in 2000 to subsidize health insurance for the poorest of the poor.

Education is primarily the responsibility of the individual state governments. There is now a primary school in every village across the subcontinent, but many children drop out of school to provide supplementary income for their families. There are more than 50 million students at secondary level, and an estimated 10 million graduates from more than 200 universities. Women make up almost 10% of those enrolled in higher education; this is a good percentage for a low-income economy. Although the high level of illiteracy is a brake on development, India has one of the largest pools of science graduates anywhere in the world.

Interreligious violence is sporadic but serious. Attacks on Christians drew particular attention but were overshadowed by Hindu–Muslim violence in Gujarat in 2002, when security forces gained increased powers 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, protection and extortion rackets. Theft has risen sharplyas consumer spending increases, and Internet crimes are a problem.

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.

According to the government, 240 million people (30% of the population), mostly in rural areas, were living below the poverty line in the late 1980s. Recent studies dispute whether this figure is rising or falling. Extremes of wealth, particularly with the opening up of the economy, are frequently seen alongside extremes of poverty. The middle classes, who number some 150–200 million, have an exceedingly comfortable lifestyle, with servants and plush housing. Many of the slums in cities such as Mumbai (Bombay) and Kolkata (Calcutta) have five to nine people living in one room; few slum houses have sanitation. In Mumbai alone, over 100,000 people live on the sidewalks.

Tourism is India's sixth-largest foreign exchange earner. More luxury hotels are being built, and wildlife and adventure tourism are being promoted. However, India has only a small share of the world tourism market, and has suffered recently from security worries over the repercussions of the US-led "war on terrorism" and acute tensions with Pakistan, particularly over Kashmir.

The origins of an Indus valley civilization may be traced back to the third millennium B.C.E. By the 3rd century B.C.E., the Mauryan kingdom under Ashoka encompassed most of modern India. Following the Battle of Plassey in 1757, British rule – through the East India Company – was consolidated.

• 1885 Formation of Indian National Congress.
• 1919 Act of parliament introduces "responsible government."
• 1920–1922 Mahatma Gandhi's first civil disobedience campaign.
• 1935 Government of India Act grants autonomy to provinces.
• 1936 First elections under new constitution.
• 1942–1943 "Quit India" movement.
• 1947 August, independence and partition into India and Pakistan. Jawarhalal Nehru becomes first prime minister.
• 1948 Assassination of Mahatma Gandhi. War with Pakistan over Kashmir. India becomes a republic.
• 1951–1952 First general election won by Congress party.
• 1957 Congress party reelected. First elected communist state government installed in Kerala.
• 1960 Bombay divided into states of Gujarat and Maharashtra.
• 1962 Congress party reelected. Border war with China.
• 1964 Death of Nehru. Lal Bahadur Shastri becomes prime minister.
• 1965 Second war with Pakistan over Kashmir.
• 1966 Shastri dies; Indira Gandhi (daughter of Jawarhalal Nehru) becomes prime minister.
• 1969 Congress party splits into two factions; larger faction led by Indira Gandhi.
• 1971 Indira Gandhi's Congress party wins elections. Third war with Pakistan, over creation of Bangladesh.
• 1972 Simla (peace) Agreement signed with Pakistan.
• 1974 Explosion of first nuclear device in underground test.
• 1975–1977 Imposition of state of emergency.
• 1977 Congress loses general election. People's Party (JD) takes power at the center.
• 1978 New political group, Congress (Indira) – Congress (I) – formally established.
• 1980 Indira Gandhi's C(I) wins general election.
• 1984 Indian troops storm Sikh Golden Temple in Amritsar. Assassination of Indira Gandhi by Sikh bodyguard; her son Rajiv becomes prime minister and C(I) leader. Gas explosion at US-owned Union Carbide Corporation plant in Bhopal kills 2000 people in India's worst industrial disaster.
• 1985 Peace accords with militant separatists in Assam and Punjab.
• 1987 Deployment of Indian peacekeeping force in Sri Lanka to combat Tamil Tigers.
• 1989 General election; National Front forms minority government with BJP support. C(I) implicated in Bofors scandal.
• 1990 Withdrawal of troops from Sri Lanka.
• 1991 Rajiv Gandhi assassinated. Narasimha Rao becomes prime minister of a C(I) minority government and initiates economic liberalization.
• 1992 Demolition of the Babri Masjid mosque at Ayodhya by Hindu extremists triggers widespread violence; 1200 people die.
• 1993 Resurgence of Hindu–Muslim riots. Bomb explosions in Bombay (Mumbai). Border troop agreement with China.
• 1994 Rupee made fully convertible. Outbreak of pneumonic plague.
• 1995 Punjab chief minister assassinated by Sikh extremists.
• 1996 Corruption scandal triggers political crisis. C(I) suffers its worst electoral defeat. Leftist United Front coalition government takes office.
• 1997 Successive governments fall as C(I) withdraws support.
• 1998 General election; BJP led by Atal Bihari Vajpayee forms coalition government. Sonia Gandhi, widow of Rajiv Gandhi, becomes president of C(I). India tests nuclear bomb.
• 1999 India and Pakistan test nuclear missiles, and engage in violent confrontation in Kashmir. BJP returned to power after elections triggered by vote of no confidence.
• 2001 Earthquake kills more than 25,000 people in Gujarat. BJP government implicated in major bribery scandal.
• 2001–2002 Terrorist attacks by Kashmiri separatists precipitate crisis with Pakistan.
• 2002 More than 2000, mainly Muslmis, killed in Gujarat following worst intercommunal riots since independence. Heatwave kills over 600 people.