Investment

Is India the next China?

BY ,   |  TUESDAY, 14 NOV 2023    4:10PM

India is one of the world's  largest countries by population, on par with China at 1.4 billion people, and on a similar growth path to China- but some 20 years behind. India's economy is expected to trace the growth shown by China, and this will manifest in infrastructure and building development and other expansion that is rich in commodity demand, and investment opportunities.

Prior to the 1990s, China and India were seen as relative equals on the global stage. Both fell into the category of emerging market economies, characterised by stagnant low levels of GDP, a lack of foreign direct investment (FDI), and with minimal investment in critical infrastructure. Many issues plagued the two nations and hindered economic progress. However, in the early 1990s, China turned its focus to the manufacturing sector where it became a major centre for global manufacturing, subsequently seeing it reach heights that significantly outpaced India.

China received significant FDI after the 1990s which saw its growth opportunities outpace that of India's (see Figure 1). Increased investment led to infrastructure spend and a noticeable uptick in the Chinese economy, one that can be replicated in India as the rest of the word looks to decouple from a relatively sole reliance on China.

There is particular focus from the international community on an internalisation of critical operations and a desire to diversify risk. India could be a clear beneficiary of this trend.