PESTEL analysis of India (Country Profile) (2024)

PESTEL analysis of India (Country Profile)

By: M Rahman | Tags: Global Business Issues

PESTEL analysis of India (Country Profile)

This detailed ‘PESTEL analysis of India (Country Profile)’ aims to address some of the political, economic, social, technological, environmental, and legal issues that shape India today. India is the second largest country in the world by population, and it is on course to become the No. 1 soon. It certainly plays a very important role in global trade and politics.

Political factors that affect India

India is one of the most powerful countries in the world. New Delhi is its capital. It neighbours two powerful countries i.e. China and Pakistan. Other neighbouring countries are Bangladesh, Myanmar, Nepal, Bhutan, & Sri Lanka.

India is the largest democracy in the world and enjoys a relatively stable political environment. However, its dispute with Pakistan over Kashmir has been an issue of grave political uncertainty. Likewise, the recent Citizenship (Amendment) Act has led to mass protests and violence in many states of the country.

Democratic will of the people reflected in the local and national elections is mostly respected and accepted by the political parties and people in general. This political culture of tolerance contributes immensely to maintain a stable political climate which is in fact a very important factor to attract foreign direct investment (FDI).

A major area of concern in India is corruption. It badly affects the business and political environment, posing a challenge to the country’s economic growth. It increases the cost of business operations and often negatively affects foreign direct investment. However, a growing public awareness and government initiatives are combating the challenges of corruption.

Economic factors that affect India

A key element of this ‘PESTEL analysis of India (Country Profile)’ is the economic environment. India is one of largest economies in the world in terms of nominal GDP. Its GDP in 2021 was worth around $3.17 trillion (O’Neill, 2022). However, the consumer demand has weakened recently. Consequently, the economy is slowing down causing people a lot of concern. The recent lockdowns were also devastating for the country with a job loss of around 122 million people.

The corporate tax rate in India is 25.17%; however, it is forecast to increase soon. It is worth noting that the country witnessed frequent corporate tax rate changes over the years (Trading Economics, 2022).

India is one of the largest coffee producing countries in the world. It is also one of the top agriculture producing countries. It has over 100 unicorns with a total valuation of $332.7 billion (IBEF, 2022). It has recently signed several free trade and other agreements with some of its trading partners.

India’s key exports are petroleum products, jewellery, pharmaceutical products, transport equipment, 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.

India’s domestic market offers numerous opportunities for both local and international organisations. The main sectors that are booming currently are information technology, telecommunications, healthcare, retail, and infrastructure.

Social factors that affect India

India has a gigantic consumer market with a total population of over 1.4 billion (Worldometer, 2022). Such a huge market is a great opportunity for multinational companies. No wonder why so many multinationals are operating in India!

India offers cheap labour and is likely to become one of the top three global economic giants over the next 10-15 years (IBEF, 2022). Accessible and affordable labour force has encouraged many multinational companies to outsource some of their business operations to the country.

India is a multi-ethnic, multi-lingual, and multi-religious country. Communal harmony is a great strength; however, it sometimes witnesses tensions in ethnic lines. It has a world-renowned film industry. It is also world renowned for some of the sports e.g. Cricket and Hockey. IPL (Indian Premier League) attracts cricket legends and talents to the country.

India is a very attractive market for multinational companies. Standard of living is gradually improving, and the country has a growing middle class with good disposable income. However, it is worth noting that it still suffers from poverty with millions of people live on less than $2 a day. Likewise, poor wealth distribution is also another massive problem.

Technological factors that affect India

An important element of this ‘PESTEL analysis of India (Country Profile)’ is the technological environment. India is very advanced technologically. No wonder why more and more tech giants including but not limited to Facebook, Microsoft, Amazon, and Apple are investing billions of dollars in the country!

India is a key destination for outsourcing work in IT. With an advanced IT infrastructure and highly skilled IT work force, it offers enormous opportunities for entrepreneurs to embark upon technological projects such as software development and upgrades, e-commerce, mobile apps, business solutions, and many more.

However, prestigious Indian Institutes of Technologies (IITs) need to carry out more research on areas such as 5G, artificial intelligence (AI), and biotechnology to prepare graduates for future employment opportunities and challenges.

Environmental factors that affect India

While India has made a lot of progress over the years, it 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.

However, it is worth mentioning that India has some of the greatest tourist attractions on earth that attract millions of tourists each year. Attractions such as Taj Mahal, Char Dham, Red Fort, Qutub Minar, the Golden Temple of Amritsar, and the Gateway of India mesmerise people with their stunning looks.

Likewise, affordable hotel price, delicious food, incredible wildlife, and wonderful rail journeys are some other factors that many tourists consider while selecting India as their holiday destination.

Legal factors that affect India

The last element to address in the ‘PESTEL analysis of India (Country Profile)’ is the legal landscape. As mentioned above, 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 the country.

The Constitution of India protects people from discrimination. Likewise, people’s sensitive personal data is protected by the Sensitive Information Rules. However, a report by Outlook India (2022) has questioned about the rampant corruption in the lower courts of the country.

Summary of PESTEL analysis of India (Country Profile)

India is one the most powerful countries in the world in terms of GDP and political might. It has very good foreign relations with both the USA, and Russia. However, its relations with both China and Pakistan need to improve for the future stability and progress of the region.

We hope you like this PESTEL analysis of India (Country Profile). Please share the article link on social media to support our academic work. You may also like readingSWOT analysis of India (Indian National SWOT). Other relevant articles for you are as follows:

PESTEL analysis of the UK.

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PESTEL analysis of the USA

PEST analysis

Last update: 17 July 2022


IBEF (2022) About Indian Economy Growth Rate & Statistics, available at: (Accessed 16 July 2022)

O’Neill, A (2022) India: Gross domestic product (GDP) in current prices from 1984 to 2024, available at: (accessed 17 July 2022)

Outlook India (2022) ‘Corruption Is Rampant In The Lower Courts’, available at: (accessed 15 July 2022)

Trading Economics (2022) India Corporate Tax Rate, available at: (Accessed 17 July 2022)

Worldometer (2022) India Population, available at: (accessed 17 July 2022)

PESTEL analysis of India (Country Profile) (1)

Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.

PESTEL analysis of India (Country Profile) (2024)


What is PESTLE analysis in India? ›

There are factors in the macro-environment that companies cannot influence. These factors may be political, economic, social, legal or environmental. To identify these risks promptly, companies should perform an analysis of these factors – the PESTEL analysis.

Can you do a PESTEL analysis on a country? ›

Unlike other business analysis tools, PESTLE analysis works just as well for countries as it does businesses. Thats right: you can analyze the standings of an entire country with the PESTLE model!

Where can I find PESTLE information? ›

Country Reports, on the right side tool bar, links to extensive current reports providing information on the PESTEL factors in a country.
Resources for a PESTEL Analysis
  • Wall Street Journal. ...
  • New York Times. ...
  • US Newsstream. ...
  • Pew Research Center. ...
  • Pew Research Center Global Indicators Database.
25 Aug 2022

What is the political environment like in India? ›

India is a parliamentary democratic secular republic in which the president of India is the head of state & first citizen of India and the prime minister of India is the head of government. It is based on the federal structure of government, although the word is not used in the Constitution itself.

What are the factors which influence business environment in India? ›

Demographic Factors. Economic Factors. Political and Legal Factors. Social and Cultural Factors.

What is PESTLE analysis example? ›

PESTLE is an acronym that stands for six external factors affecting your business: political, economic, sociological, technological, legal and environmental. Each of these can have a profound effect on your business and varying implications, for example, in terms of: duration of impact - short term or long term.

How do you do a country analysis? ›

How to Write a Country Analysis
  1. I. Political/legal aspects:
  2. II. Economic aspects.
  3. III. Socioeconomic and cultural aspects.
  4. IV. Conclusion of Country Analysis.

What are the 6 elements of PESTLE? ›

In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal.

Why is PESTEL important for international business? ›

A PESTEL analysis helps managers gain a better understanding of the opportunities and threats they face; consequently, the analysis aids in building a better vision of the future business landscape and how the firm might compete profitably.

Why do companies use PESTLE analysis? ›

A PESTLE analysis is often used as a broad fact-finding activity. It helps an organization establish the external factors that could impact decisions made inside the organization. By understanding the impact these external factors can have on an organization, it becomes handy for organizations to plan better.

Is PESTEL analysis for company or industry? ›

A PESTLE analysis is a tool used to gain a macro picture of an industry environment. PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental factors. It allows a company to form an impression of the factors that might impact a new business or industry.

What type of society is India? ›

India is a hierarchical society. Whether in north India or south India, Hindu or Muslim, urban or village, virtually all things, people, and social groups are ranked according to various essential qualities. Although India is a political democracy, notions of complete equality are seldom evident in daily life.

What is the economic environment of India? ›

A mixed economic system operates where both public and private sectors exist, and India is an example of a mixed economy. Economic Planning: Economic planning gives direction to the changes in the economic environment. It includes five years plan, an annual budget, etc.

What are the current economic issues in Indian economy? ›

Problems Facing Indian Economy
  • Unemployment. ...
  • Poor educational standards. ...
  • Poor Infrastructure. ...
  • Balance of Payments deterioration. ...
  • High levels of private debt. ...
  • Inequality has risen rather than decreased. ...
  • Large Budget Deficit. ...
  • Rigid labour Laws.
25 Feb 2022

What is the business environment in India? ›

Indian business environment is characterized by the co-existence of both public and private sector in respect of its participation in various economic activities in the country. Accordingly, the various economic policies of the country can promote the development of both the sectors in different spheres of activities.

What factors affect the success of a business? ›

10 factors that contribute to business success
  • Set a business goal. ...
  • Understand Your Customer Needs. ...
  • Research your competition. ...
  • Attract and retain the right talent. ...
  • Be transparent with your team. ...
  • Become a decisive leader. ...
  • Learn to be patient. ...
  • Keep business documents.
5 Oct 2021

How does pestle affect a business? ›

A PESTLE analysis provides contextual information about the business direction, its brand positioning, growth targets, and risks (such as another pandemic) to productivity. It can help determine the validity of existing products and services and define new product development.

Which company uses PESTLE? ›

The PESTLE analysis of the companies has been done in this context for multinational companies such as Samsung, Starbucks, and Pfizer. Samsung operates its business in the field of electronic goods and it is one of the leading brands of the world.

What are political factors in PESTLE? ›

Political factors in PESTLE Analysis

Political factors include tax policies, Fiscal policy, trade tariffs, etc. that a government may levy around the fiscal year and it may affect the business environment (economic environment) to a great extent.

What is environmental threat and opportunity profile? ›

ETOP analysis (environmental threat and opportunity profile) is the process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business for the purpose of taking strategic decisions.

What is the first step in a country analysis? ›

The first step in country analysis is the identification of the strategy of the company. A country's strategy is reflected in the goals and policies of decision makers.

What is common country analysis? ›

The United Nations Common Country Analysis (CCA) examines the development challenges and drivers for sustainable development in Mozambique, at a time when the country faces an increased number of complex challenges.

Why is country analysis required? ›

Country Analysis offers a variety of data which allows for profound assessments of a target country. In this regard, Country Analysis includes not only the economic data as an indicator for economic growth, but also the political and social aspects.

Which PESTEL factor is most important? ›

There is no single most important factor in the PESTEL framework. Depending on the subject to be analyzed, different factors may be supportive or detrimental. There is something that is most important in strategy formulation - knowing your company, knowing your competition, and knowing your customer.

What are economic factors in PESTLE? ›

Economic factors include inflation rate, interest rates, foreign exchange rates, economic growth patterns etc. It also accounts for the FDI (foreign direct investment) depending on certain specific industries who're undergoing this analysis. Example Index Terms – Ownership Changes, Bankruptcy, Company Relocations.

What is PESTLE analysis PDF? ›

Doing a PESTEL analysis helps you to look at all important factors. that might affect the success or failure of your project. PESTEL is an acronym for the following factors (Political, Economic, Social and cultural, Technological, Environment and Legal)

How the PESTEL framework affects global business? ›

Globalisation has Political, Economic, Socio-cultural, Technological, Environmental, and Legal (PESTEL) factors that influence it and result from it. These affect performance of firms and therefore influence strategic directions of firms.

What are the components of PESTLE analysis? ›

There are six elements to a PESTLE analysis: Political, Economic, Sociological, Technological, Legal, and Environmental.

Who invented PESTLE analysis? ›

Who invented PESTLE? The first concept of PESTLE, initially just PEST, is commonly cited to be Francis Aguilar who published a book in 1967 referring to ETPS.

How do you write a Pestel Analysis Report? ›

Put together six sections for the core content

Make use of one section for each category and then include all the important factors within each section. If necessary, divide the sections into subsections that cover bulkier topics. Include an introduction as well as a conclusion.

How does political factors affect business? ›

Governments can raise or lower corporation tax , which will impact on profits. They can also affect businesses by increasing value-added tax on products or business rates. They can bring in new laws like the National Minimum Wage , which impacts on profits and employment rights.

What is Pestel analysis essay? ›

What is a PESTEL analysis? A PESTEL analysis is an acronym for a tool used to identify the macro (external) forces facing an organisation. The letters stand for Political, Economic, Social, Technological, Environmental and Legal.

Why is PEST Analysis important? ›

The main purpose of PEST analysis is to understand what external forces may affect your organization and how those factors could create opportunities or threats to your business. PEST analysis helps you: Understand current external influences on the business so you can work on facts rather than assumptions.

What is legal factor in PESTLE analysis? ›

Legal factors include laws involving issues such as employment, health and safety, discrimination, and antitrust.

Which is better SWOT or PESTLE? ›

Unlike SWOT, which is tied to analyzing a specific company's internal capabilities, PESTLE is designed examine a company's external environment. Sometimes referred to as “scanning the business environment,” a PESTLE is meant to be a macro or “big picture” look at the market in which your business operates.

Is PESTEL a marketing theory? ›

A PESTEL analysis or more recently named PESTELE is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organisation. The result of which is used to identify threats and weaknesses which are used in a SWOT analysis.

Are all six elements of PESTEL important to every organization? ›

The PESTLE environment contains six key elements that can impact organizational activities. PESTLE analysis explains about Political, Economic, Sociological, Technological, Legal and Environmental factors and their impact to the business organizations. These elements are non-controllable to the organization.

What are social factors in PESTLE? ›

Social factors have to do with the demographic within a country or region and with cultural aspects. Important demographical statistics are age distribution, education levels, population growth rate, ratio of males to females, etc. Cultural aspects consist of the attitudes, beliefs or values of the population.

What are the political factors affecting business? ›

Governments can raise or lower corporation tax , which will impact on profits. They can also affect businesses by increasing value-added tax on products or business rates. They can bring in new laws like the National Minimum Wage , which impacts on profits and employment rights.

What are the macro environmental factors affecting Netflix in India? ›

Unemployment, wage rates, taxation, inflation and interest rates are economic factors that affect the viewership of Netflix. Demographic trends, gender, equality roles and societal norms are important to keep in mind for Netflix.

What do you mean by macro environment? ›

What Is a Macro Environment? A macro environment refers to the set of conditions that exist in the economy as a whole, rather than in a particular sector or region. In general, the macro environment includes trends in the gross domestic product (GDP), inflation, employment, spending, and monetary and fiscal policy.

What do you understand by the term environmental diagnosis? ›

A Environmental Diagnosis consists in a systematic identification of all environmental factors related with the activities of a given organization. The main goal is to verify the environmental performance of the organization.

How does political environment affect business in India? ›

Your government might increase taxes for some companies and lower it for others. The decision will have a direct effect on your businesses. So, you must always stay up-to-date with such political factors. Government interventions like shifts in interest rate can have an effect on the demand patterns of company.

What are economic factors in pestle? ›

ECONOMIC: Economic factors will include exchange rates, economic growth or decline, globalisation, inflation, interest rates and the cost of living, labour costs and consumer spending.

What economic factors can affect a business? ›

Let's have a closer look at the main economic factors that affect business success.
  • Consumer confidence. Consumer confidence measures the overall consumer optimism about the state of the economy. ...
  • Economic growth and development. ...
  • Inflation. ...
  • Interest rates. ...
  • Unemployment.
24 Feb 2021

Who is Netflix target market? ›

Netflix is distinctly more popular with younger consumers in the United States than with older generations. According to the findings of a recent survey, around 75 percent of respondents aged 18 to 34 subscribed to Netflix as of mid-2021, compared to just 44 percent of those aged 65 or above.

Why is Netflix not available in China? ›

Netflix currently doesn't offer any video streaming service in China due to a challenging regulatory environment in the country. The Chinese government is sensitive when it comes to the content being made available to its citizens. However, in many cases, VPN users can access the service.

What are economic factors? ›

Economic factors include economic growth, percentage of unemployment, inflation, interest and exchange rates, and commodity (oil, steel, gold, etc) prices. These affect the discretionary income and purchasing power of households and organisations alike.

Is SWOT analysis micro or macro? ›

SWOT Analysis: An Overview. Each of the models seeks to define the company's position in the market. Porter's 5 Forces are generally more of a micro tool, while SWOT analysis is comparatively macro.

What are the economic factors of environment? ›

Economic environment
  • Employment/unemployment.
  • Income.
  • Inflation.
  • Interest rates.
  • Tax rates.
  • Currency exchange rate.
  • Saving rates.
  • Consumer confidence levels.

What are the benefits of environmental analysis? ›

An environmental analysis helps organizations identify internal and external elements that can either negatively or positively impact their business. By looking at factors, such as the economy and technology, businesses can anticipate potential opportunities and threats.

What is the purpose of environmental analysis? ›

An environmental analysis, also called an environmental scan, is a strategic tool used to identify and assess all external and internal elements in a business environment. It examines organizational and industry factors that can positively or negatively affect the business.

What are the steps in PEST analysis? ›

4 steps of PEST analysis
  1. Step 1: Brainstorm potential factors. In this first step, you'll want to think about all of the environmental factors that affect your business as a whole. ...
  2. Step 2: Brainstorm opportunities. ...
  3. Step 3: Brainstorm threats. ...
  4. Step 4: Take action.
10 May 2022

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