With the rupee hitting an all-time high, the Indian economy joins the elite trillion dollar club.

India has emerged as the 12th country in the world with a trillion dollar economy. This was boosted by growth in the services and manufacturing sectors, coupled with an appreciating rupee against the US dollar. This milestone could prove to be a mixed blessing for the economy and could create both opportunities and obstacles. The Indian currency is trading around 40-41 to the dollar, and has appreciated by about 8.4% this year. India's GDP was less than $500 bn in 2000-01, but has grown more than twice the size in the past six years due to consistent 8-9% growth.

Now the Indian economy is one of the fastest growing markets in the world. It is witnessing the highest international remittances compared to any other country (worth $25 bn a year and growing at 25% annually). Global Economic Prospects for 2006 by the World Bank reveal "India for the first time overtook China as the nation whose workforce remits the highest amounts, an indication that Indians have emerged as the top `alien' workforce." Foreign exchange reserves crossed $200 bn for the first time in the country's economic history. A report by JP Morgan says, "Indian Diaspora can be a `powerful catalyst' in helping India realize its aspiration of 10% annual GDP growth." Swiss Investment firm, Credit Suisse's latest report states that eight of the previous 10 economies to pass the trillion dollar mark saw their stock markets rally for a full year afterwards. The report further adds, "While the figure doesn't change the fundamentals of an economy, it does seem to boost investor confidence.

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