India’s Reform Strengths

Why does China receive so much more international attention than India? China is the world’s most populous nation, but the gap is shrinking. For a long time, China’s economy was growing much faster than India’s, but that gap too has closed substantially. In recent years, China has received vastly more foreign direct investment (FDI) than India, but India does almost as well with nonethnic Chinese investors. Indian imports still lag behind China’s, but have begun to increase as China’s did after the first few years of its economic reforms. While China struggles with political liberalization and decentralization, India has long had a resilient democracy, a federal system and—since 1993—a somewhat more decentralized political system. This chapter explains why India was taken less seriously by the outside world and why that situation has begun to change.