Will India Pass China in Economic Growth?

I always enjoy reading contrarian perspectives, so as you can imagine, I found it fascinating to read this article from The Daily Yomiuri that argues India will surpass China in economic growth in the coming decade. According to the article, "China's gross domestic product will grow at 9.5 percent this year compared with India's 7.6 percent, according to the latest Asian Development Bank forecast. The gap will narrow next year with China posting an 8.8 percent growth rate and India 7.8 percent ... China currently is perhaps more than 10 years ahead of India in terms of economic development." For companies thinking about future sourcing and supply base localization efforts in the region -- especially for products which will ultimately be sold in local markets -- the future growth of India should not be underestimated. Sure, India has its own set of problems relative to China, but a common law legal foundation and a capitalist democracy are two major positives in its favor relative to its neighbor to the East, especially as it pertains to sustainable procurement strategies. Unless China addresses its IP, environmental, and wage inflation issues (especially in the East), the sourcing boom in the region will not be sustainable over the long haul.

Jason Busch

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