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India Could Surpass China October 14, 2010

Posted by tkcollier in Economy & Business, Geopolitics.

Chetan Ahya and Tanvee Gupta of Morgan Stanley, an investment bank, predict that India’s growth will start to outpace China’s within three to five years. China will rumble along at 8% rather than double digits; India will rack up successive years of 9-10%. For the next 20-25 years, India will grow faster than any other large country, they expect. Other long-range forecasters paint a similar picture.Several factors weigh in India’s favour. The first is demography. Indians are young see chart . “An ageing world needs workers; a young country has workers,” says Mr Nilekani. Previous Asian booms have been powered by a surge in the working-age population. Now it is India’s turn.

Indian firms export a lot of services, but their primary focus is on the needs of domestic consumers. Indian shoppers demand goods that are cheap, rather than fancy. Indian “frugal innovators” oblige. Tata Chemicals makes a filter that requires no power and can give a family of five safe drinking water for a month for 30 rupees ($0.65). Researchers at the Indian Institute of Technology and the Indian Institute of Science produced a prototype for a $35 laptop in July. A firm called Ayas Shilpa makes suspension bridges for a tenth of the price of conventional ones. In a country where countless villages are connected to the outside world only by perilous rope bridges across raging rivers, this is a colossal boon.

via Business in India: A bumpier but freer road | The Economist.


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