Is India emerging as a global economic powerhouse equal to China?

Abstract

India has frequently been referred to as the country with the largest economic growth potential in the world after China.Many commentators seem to think its role in the world economy is already comparable to that of China.However, a closer look at merchandise trade, market share developments, and foreign investment figures reveals that India is still far behind China as far as international influence is concerned.An interesting exception is services trade, where India already plays an important global role due to recent fast growth of offshore outsourcing.Despite of the vitality of this sector, its weight in the Indian as well as in the global economy is relatively small.In general, India's economy and economic policy are still relatively inward looking and it seems unlikely that India will become a major driver of the world economy in the current decade.However, depending on India's economic policy and reforms, the situation in the next decade may already be quite different. Key words: India, China, economic growth, economic policy, foreign trade