Will India’s growth rate outpace China’s?

In the wake of the Mumbai bombings, concerns remain over the business environment in the commercial and entertainment capital of India. That said, India ranks among the largest and fastest-growing markets in the world, and it has weathered the economic downturn substantially better than Brazil and Russia. It also continues to attract investment due to its market size, economic diversity, and future growth potential.

  • India’s steady growth will place it neck and neck with China in 2013

o   India’s economy is expected to expand 8.0% this year and 8.4% next year. The country’s GDP growth is expected to continue rising through 2013 when it will begin to outpace China

o   India’s rapid economic expansion will be reflected in the growth of its people’s spending power. Personal disposable income per capita is set to rise by 13.2% this year and 12.4% next year.

  • Favorable demographics

o   India is the third-largest market in Asia, after China and Japan

o   More than 65% of its 1.2 billion people are under 35 years of age

  • Improving infrastructure

o   New Delhi is devoting more attention and resources to infrastructure development in an effort to eliminate bottlenecks and attract investment

o   The portion of India’s budget allocated to infrastructure increased by 23% this year to US$48 billion.

o   Improved infrastructure is attracting investment in automobile manufacturing, metals, chemicals, textiles, and food processing from multinationals which are increasingly looking to use India as a supplier to the rest of Asia.

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