The Economies of Countries in the Indian Subcontinent


The Indian subcontinent is a very poor and undeveloped region of Asia made up of India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka, and the Maldives. Out of the seven countries that are in the region, six have under-average HDIs. All of the countries in the Indian subcontinent have a GDP per capita lower than $10,000.

But there is hope for the region. Out of the seven countries in the region, five are ranked in the top fifty in terms of real GDP growth. Let’s take a closer look at the economies of the countries in the region.


India’s real GDP growth rate for 2017 was 6.6%; the 23rd highest. In comparison, America’s growth rate was only 2.2%.

Although India is currently growing rapidly, it still faces many problems. India still has a very low GDP per capita, and the wealth gaps are rapidly increasing. Despite having a large GDP, India has a very low HDI. If India can sustain its growth, it could become a very powerful country like China. The country has a lot of potential for this century.


Pakistan, one of India’s biggest rivals, has an economy that is also growing. In 2017, its real GDP grew by 5.3%, making it the 32nd fastest growing economy. Pakistan’s GDP in 2017 was $305 billion, but this number is most likely inaccurate. It is estimated that around 36% of Pakistan’s economy is “undocumented”, meaning that it is not accounted for in the GDP.

Pakistan has a good economic and political relationship with China. The China-Pakistan Economic Corridor is an agreement between the two countries that attempts to modernize Pakistan by building infrastructure, which benefits Pakistan economically and will benefit China by giving it more political power.

Pakistan has the worst Human Development Index in the entire subcontinent, with a rank of 150th for best-developed country. Their biggest problems are poverty and corruption. We will see if Pakistan can overcome these problems.


Bangladesh is another country that has a rapidly growing economy. In 2017, their economy grew by 7.3%, the 10th fastest growing in the world. Bangladesh is known for exporting textiles, which makes up 80% of the country’s total exports. Many regions near Bangladesh, such as Nepal, Bhutan, North-eastern India, and Tibet, use the country’s seaports. This gives Bangladesh influence over the imports and exports of these places.

Bangladesh faces an overcrowding problem. Despite having a size similar to New York State, Bangladesh has a population of 164 million, which is half of the population of the United States; this high density leads to traffic and pollution, which will only get worse. The country’s population is expected to hit 200 million by 2050.

Sri Lanka

Compared to other countries in the subcontinent, Sri Lanka isn’t that poor. Sri Lanka has a GDP per capita of $4,065, which is the second highest in the region. Sri Lanka is also not that undeveloped compared to other countries in the region. The country ranks 76th in the Human Development Index, which makes it the most developed country in the sub-continent. The Sri Lankan economy has been growing rapidly over the past 10 years, but it has recently slowed down.

Sri Lanka has been a victim of China’s “Debt Trap”. The Sri Lankan President took loans from China to build a seaport in Hambantota. After it became clear that the loans could not be repaid, Sri Lanka leased the port to China for 99 years. This debt on the government could hinder the country’s economic growth.


Nepal is a very poor and isolated country. It has a low HDI ranking and has a GDP per capita of just $835. But the economy of Nepal is growing and has a promising future. Nepal’s real GDP growth rate for 2017 was 7.9%, the highest growth in the subcontinent.

Nepal has the potential to make a huge amount of electricity from hydropower dams, which it can then sell to its neighboring countries at a cheap price. Nepal’s neighbors are India and China, two countries with skyrocketing electricity consumption. Nepal’s biggest problem is that it needs money to build these dams. If the country can get the money to build them, we could see a Nepal that isn’t so poor and undeveloped.

The Maldives

The Maldives has the largest highest GDP per capita in the subcontinent, at $10,500. The country relies on tourism for 28% of their income. The Maldives’ real GDP growth rate is currently at 4.8%, which is the 47th highest in the world.

Climate change will be a massive threat to the country. According to the World Bank, the Maldives could be underwater by the end of the century as sea levels continue to rise. The government has actually started buying land in Australia to prepare.


Bhutan is a tiny country in the Himalayas, with a GDP per capita of $3,110. The country’s biggest industries are agriculture and forestry. Bhutan’s economy has been growing ever since it was hit with a recession from 2012 to 2013. Bhutan is known for its environmental friendliness. The country’s constitution requires 65% of the country to be forested; it also has very low carbon emissions.

The Future

Many countries in the Indian subcontinent have large potentials. While they face significant problems, including poverty, corruption, and pollution, these nations are still projected to become major players in the coming century. For example, India’s GDP is set to overtake the US in 2030, while Bangladesh’s manufacturing sector is already rivaling China. While the West faces an increasingly older population, these nations all a large population of young people that will be the foundation of these countries.

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