Just The Facts

Can India Surpass China’s Economy by 2050?

9 facts on the economic rise of India after a delayed start.

Credit: Niyazz - www.shutterstock.com

Takeaways


  • For several decades to come, China will almost certainly hold its new spot at the top of the global economic table.
  • By 2050, it is possible India’s economy will have edged out not only the US but also China for the top spot.
  • India’s economy is only a little over 40% as large as the U.S. and Chinese economies.
  • The Indian economy is expected to be 2% larger than the U.S. economy by 2050 — but 30% smaller than China’s.

1. For several decades to come, China will almost certainly hold its new spot at the top of the global economic table.

2. However, by 2050, it is possible India’s economy will have edged out not only the United States but also China, to take the top spot.

3. A little more than a decade after China launched its market-based reforms, India jumped into the growth game as well.

4. India’s economic liberalization policies of 1991 led to an increasing role for the private sector and opened the economy to foreign investment.

5. As of 2014, India’s $7.3 trillion economy was the world’s third-largest, measured in terms of purchasing power parity.

6. However, it is at present only a little over 40% as large as the U.S. and Chinese economies.

7. While India’s growth has not been as strong as China’s over the past two decades, its growth rate is expected to outpace China’s in the coming decades.

8. To realize its potential, India will need to sustain its reform policies and increase investment in infrastructure, education (especially women) and better governance.

9. The Indian economy is expected to be about 2% larger than the U.S. economy by mid-century — but about 30% smaller than China’s.

Sources: PricewaterhouseCoopers with additional analysis by The Globalist Research Center.

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  • criticalobserver

    This is ‘wishful prediction’ based on ‘wishful thinking’.

  • hhour

    Your GDP statement is very misleading to give a whole lot better picture of the size of India’s economy. Your GDP is the one based on PPP( purchasing power parity). When we compare GDP internationally, we use the one based on nominal exchange rate. On a nominal exchange rate basis, India’s GDP is still only one fifth of that of China. I don’t think on a nominal base, India will ever catch up with China.

  • bhumphreyTG

    Not sure who “we generally use” refers to in your statement. Certainly in my experience the convention is absolutely not to use nominal GDP comparisons but rather PPP GDP comparisons. This site, as well as many others, does indeed typically refer to China as the largest economy in the world. “Almost nobody” doesn’t ring true to me.

  • hhour

    You take a look at many newspaper or economic or current affairs magazine articles. ALMOST all of them call the Chinese economy the second biggest ( meaning the nominal GDP) not the biggest one ( meaning the PPP GDP). I find very RARELY any article calling the Chinese economy is the biggest in the world. If the Globalist uses the PPP GDP to determine the size of Chinese economy, then it’s the exception rather than the rule. Although PPP GDP is better to size up the domestic power of an economy, It’s a lot better to use the nominal GDP based on current exchange rate to assess the international heft of an economy.

  • I m possible

    Are we talking about only about handful few cities ? How India’s GDP can grow when Northeast cities like Agartala continues to remain economically backward ? Left ruled Agartala has become 3rd Internet gateway and with a lameduck leadership unwilling and having poor understanding of Industry and technology, Tripura and its Youth’s future have been continuously ruined leaving a record 25.2% (highest in India) unemployment.

    It has been a long wait for Tripura and its youths who have been suffering everyday from chronic unemployment and concerned folks are just happy to mint Govt salary month after month with an excuse of unemployment is throughout country or no infrastructure. At whose cost please ?

    With a record (highest in India) 25.2% of unemployment Left ruled Tripura continues to bite dust of under-development and non-performance due to state’s outdated policies of being anti development and industry without realizing world and India’s economy driven by Business and technology.

    So far it has been about Govt job, salary, subsidy – on tax payers money and mediocre plastic industry for name sake being the focus – which still fails to show hope to lakhs of educated unemployed youths!

    Urgent need is to bring high end industry and jobs at Agartala having follow up with Industry leaders and setting up required infrastructure on a war footing.

    With high speed internet and 24/7 power, Can capital Agartala look forward in 2016 to being an IT hub with high end IT jobs for 7 lakh educated unemployed youths of Trpiura ?.

  • Robotman

    I don’t see how India can catch up by 2050, only 34 years. India is at $2 trillion and China is at $11 trillion. China’s growth of 6.8% last year is way way more than India’s growth of 7.3% last year.

  • veria

    based on purchasing power parity,

  • veria

    Exactly, though China has the world largest economy based on purchasing power parity, and US has the world largest economy based on the exchange rate, the US in most articles and economic articles is still referred to as having the world largest economy. Occasionally, China is referred to as having the world largest economy .

  • Taizhi Lu

    Exactly

  • Taizhi Lu

    I don’t get how can India surpass……In the history, India was more advanced like 60 years ago. Indian system does not support this wishful thinking.

  • JonnyG

    Actually, it is not impossible, but improbable. As you’ve noted of the PWH prediction, even using PPP, India will still fall well short of China’s GDP in 2050. Btw, just because China can accomplished it, does not mean India will do the same, since differences in political system will garner different results.