government to articulate an economic reform program that includes
developing basic infrastructure to improve the lives of the rural
poor and boost economic performance. The government has reduced
controls on foreign trade and investment. Tariffs averaged 12.5% on
non-agricultural items in 2006. Higher limits on foreign direct
investment were permitted in a few key sectors, such as
telecommunications. However, tariff spikes in sensitive categories,
including agriculture, and incremental progress on economic reforms
still hinder foreign access to India's vast and growing market.
Privatization of government-owned industries remained stalled in
2006, and continues to generate political debate; populist pressure
from within the UPA government and from its Left Front allies
continues to restrain needed initiatives. The economy has posted an
average growth rate of more than 7% in the decade since 1996,
reducing poverty by about 10 percentage points. India achieved 8.5%
GDP growth in 2006, significantly expanding manufacturing. India is
capitalizing on its large numbers of well-educated people skilled in
the English language to become a major exporter of software services
and software workers. Economic expansion has helped New Delhi
continue to make progress in reducing its federal fiscal deficit.
However, strong growth - more than 8 percent growth in each of the
last three years - combined with easy consumer credit and a real
estate boom is fueling inflation concerns. The huge and growing
population is the fundamental social, economic, and environmental
problem.

Indian Ocean
The Indian Ocean provides major sea routes connecting
the Middle East, Africa, and East Asia with Europe and the Americas.
It carries a particularly heavy traffic of petroleum and petroleum
products from the oilfields of the Persian Gulf and Indonesia. Its
fish are of great and growing importance to the bordering countries
for domestic consumption and export. Fishing fleets from Russia,
Japan, South Korea, and Taiwan also exploit the Indian Ocean, mainly
for shrimp and tuna. Large reserves of hydrocarbons are being tapped
in the offshore areas of Saudi Arabia, Iran, India, and western
Australia. An estimated 40% of the world's offshore oil production
comes from the Indian Ocean. Beach sands rich in heavy minerals and
offshore placer deposits are actively exploited by bordering
cou