ON

PESTEL
ANALYSIS OF
INDIAN
ECONOMY
submitted by :-
amit,Nikhil,reshmee,Sushmita,shweta,
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What is pestel analysis???

A PESTEL analysis or PESTLE analysis is a framework or tool
used to analyse and monitor the macro-environmental factors
that may have a profound impact on an organisation’s
performance. This tool is especially useful when starting a
new business or entering a foreign market. 
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EXAMPLES OF PESTEL ANALYSIS

LET’S TAKE A EXAMPLE OF UBER :-
1. POLITICAL FACTORS :- 5

(a) Needs to make its stand clear about driver’s insurance.

(B) Have to follow minimum wage rules.
(c) Have to deal with bans

2. ECONOMIC FACTORS :-
(a) easily accessible
(b) affordable fare charges
(c) offers job opportunities , but payment may not convincing.

3. SOCIAL FACTORS :-
(d) User friendly
(e) Quick pick up
(f) Gives better ride than taxis
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4. TECH FACTORS :-
(a) excellent mobile app for users
(b) using social media and and other electronic apps for promotion
like pay via paytm …
5. LEGAL FACTORS :-
(a)Need to prevent ban in many countries.
(b)Need to follow labor and employee
Safety as well.
(c) Copy right laws need to be looked as
Well.

6. ENVIRONMENTAL FACTORS :- (a) fuel usage

( b) traffic congestion is a concern as well
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Application of pestel analysis in
Indian economy
As you may know that PESTEL analysis is usually conducted in the context of a particular
industry/company; however, you can also carry it out on a country. When conducted on a country, the
analysis becomes generic.

The country has put in place measures aimed at improving the environment for business to thrive.
Consequently, the Indian business environment has gained the competitiveness crucial to survive in today’s
business world. To gain a detailed understanding of India’s business environment it is important to analyze it
through application of parameters such as PESTEL analysis.
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✖ Polictical :-

Being one of the largest democracies in the world, India runs on a federal form of
government.
• The political environment is greatly influenced by factors such as government’s policies, politician’s
interests, and the ideologies of several political parties. As a result, the business environment in India is
affected by multivariate political factors. They include taxation which is well developed due to its three-
tier structure of governments: Union, state and Urban & Rural bodies.
• The Union government imposes income tax, custom duty as well as excise, sales and service tax. The
state government levies principal taxes including stamp duty, land revenue, state excise, entertainment
duty and professional and callings tax. Various taxes such as octroi, properties, markets as well as utilities
are charged by the local bodies.
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• in addition, political factors involve the question of government’s view and attitude towards
provision of subsidies as well as government priorities towards support of business .
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ECONOMICAL
1. The economy of India has been significantly stable, since the introduction of the industrial reform policies
in 1991. As per the policy, reductions in industrial licensing, liberalization of foreign capital, formation of
FIBP and so on, has resulted in a constant improvement of India’s economic environment. The country
registered a GDP of $5.07 trillion in 2013 following a further improved GDP growth rate of 5% in 2014 as
compared to 4.35% in 2013.
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2. According to the IMF 2017 economic forecast, India’s GDP is worth $2.4 trillion making it the 7thlargest
economy in the world by nominal GDP. The GDP will grow by 7.0% in FY18 which is expected to increase
to 7.4% by FY20 (The World Bank Group, 2018).

India is one of the top countries in many industries. For example, it is the 7th largest coffee producing
countries in the world (International Coffee Organisation, 2017). It is also one of the top agriculture
producing countries in the world.
✖ India’s key exports are petroleum products, jewellery, pharmaceutical products, transport equipment, 12
machinery and readymade garments to name but a few. On the other hand, India imports crude
petroleum, gold and silver, electronic good, pearls and precious stones and many other things. Some of
the top trading partners of India are China, UAE, Switzerland, Saudi Arabia, USA, and Qatar 
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SOCIAL

✖ The social factors refer to any changes in trends which would impact a business environment. For
instance, the rise in India’s ageing population is resulting in a considerable rise in pension costs and
increase in the employment of older workers. India has a population of more than 1.2 billion people
with about 70% between the ages of 15 and 65. Therefore, there are structures with percentages
according to age. These structures contain varying flexibility, in education, work attitudes, income
distribution, and so on.
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TECHNOLOGICAL

✖ Technological factors influence new product development as well as invention of fresh processes.
Technological has great impacts on cost reduction, quality, as well as innovation. India is now served
with the 4G technology steered by the installation of optic fibre cable. This has facilitated innumerable
projects in technology. Moreover, India boasts of a strong IT sector as well as being a very strong
market for mobile and communication provision.

FOR EXAMPLE :- BENGALURU IT HUB (silicon valley of india )

With an advanced IT infrastructure and highly skilled IT work force, India offer enormous opportunities for
entrepreneurs to embark upon technological projects such as software development and upgrades, e-
commerce, mobile apps, business solutions, and many more.
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ENVIRONMENTAL

✖ While India has made a lot of progress over the years, the country still faces a number of environmental
challenges e.g. air pollution, water pollution, floods, resource depletion such as water and forest, loss of
biodiversity, and diversion of consumer waste into rivers. Expatriates may sometimes find it difficult to
live under some of these environmental challenges
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LEGAL
✖ India is a famous destination for foreign direct investment. Depending on the scope and the business
needs, foreign investors can set up a company, branch, or a limited liability partnership in
India. Indian companies are governed by the Companies Act, 2013. 

✖ There are a number of labour laws that regulate employment relations in India e.g. Employees’ State
Insurance Act 1948 (ESI Act), Industrial Disputes Act 1947 (ID Act), Maternity Benefit Act 1961
(MBA) and the Payment of Bonus Act 1965 (PBA).
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