Apr 30, 2024
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| India’s growth rate is clearly higher than that of China, especially since 2022, and there is no expectation this trend will change any time soon. Photo: Bloomberg |
Had I asked this question ten years ago, the answer would have been clear cut: Impossible. But things are changing. The Chinese economy is five to six times bigger than that of India, but India’s growth rate is clearly higher than that of China, especially since 2022, and there is no expectation this trend will change any time soon. This means that, unless a major shock hits the Indian economy, it will continue to converge in size with that of China for at least 30 years until India completes its urbanization process. Whether this will make the Indian economy bigger than that of China is hard to tell since it will depend on how fast China will decelerate but also how long India will continue to benefit from its current long-hanging fruits to create growth, from urbanization, a growing population and a very favourable external environment as the most obvious hedge for the West against the rise of China.
