A new Bloomberg report claims that India can replace China as the main driver of global growth by 2028 if the country meets certain conditions linked to infrastructure development and education.
This is the time when Asia is becoming more and more important in the world economy. Asia is a large continent with many different countries. Although not all the countries in Asia are the same, the term “Asian age” could mean that there is a lot of competition among these countries. At the start of this century, China was the main country helping the world economy to grow.
However, now there are signs that India might become the new leader in helping the world economy grow. A recent report suggests that by 2028, India economy could play a bigger role in global economic growth than China. This doesn’t mean that India will have a larger economy than China in the next four years, but it does mean that India will be more important for helping the world economy grow during this time.
Factors Affecting Economic Shift from China to India
China’s economy is not doing as well as before, and India’s economy is getting stronger. Experts think this change is because China’s economy is not growing as fast as it used to. A group called Fitch has said that China’s money situation is not looking good. This is because China owes more money now compared to before, and its growth is slowing down.
In 2019, China owed money equal to 38% of all the money it made (GDP), but now it’s gone up to about 56%, and it might reach 61% by the end of this year. China’s growth rate has also slowed down, with only a 5.4% increase last year and a predicted 4.6% this year. On the other hand, India’s economy is expected to grow by 7% this year. Some companies are deciding to make their products in India instead of China because they are worried about China’s rules and punishments. For example, Apple is starting to make 14% of its iPhones in India, which is about $4 billion worth of phones.
India’s Strategy and Economy.
To keep making progress and get even better, India should keep improving its buildings and investing in its people. The Modi government has made infrastructure a top priority, putting around $132 billion into it this year. That’s three times more money than five years ago. This money is meant to make better roads, highways, railways, airports, seaports, and waterways, which are really important for growing the economy.
When infrastructure is better, trading goods happens more quickly, which saves time and money. Also, in India, different states try to do better than each other, which can sometimes cause problems. But most of the time, it helps each state do its best. Experts think that by 2048, eight states in India could have economies worth a trillion dollars, with states like Maharashtra, Gujarat, and Karnataka leading the pack.
Challenges in Economic Planning
Even though things look good in the future, there are still some problems to deal with. It’s important to keep investors feeling good about the stock market and new businesses in India. While there have been many successful Indian startups worth over $1 billion, the number of these successful startups has recently gone down. In 2024, there were only 67 of these successful startups in India. What’s even more worrying is that more than 130 successful startups started by Indians were set up in other countries, not in India. This makes people wonder about how good it is to do business in India, the rules that businesses have to follow, and the skilled workers available.
These problems show how we shouldn’t just believe that the economy will always do well. We need to always check and change our plans. Things can change a lot because of unexpected events, like the virus outbreak in Wuhan in 2020, or because of bad government decisions. That’s why India needs to stay alert, keep checking how well its economic plans are working, and learn from what has happened before, like how China made smart economic moves in the 1970s. This will help India keep growing and getting better.
