India V China – Comparing the Market and these two Bric Partners

Experts in Growth Markets and the Bric's region are always trying to draw a comparison between Bric Partners and neighbors India and China. India and China are very different markets economically and even more so politically but there is enough similarity’s to compare these two Bric Partners. As the Bric region is currently the world’s engine room for growth, China and India would be considered as two of the most important gears for the World’s economic growth and development.

India is considered quite a way behind its Bric Partner China, both are growing at nearly 10% so they share similar growth but India has a lot of catching up to do to be on a par with China’s rapid development over the last 20 years. When India’s economy started growing in 1991 China already had a big head start.  Some market analysis predict that India has every chance of leapfrogging China as the number one world economy by 2050, China is currently the world's 2nd largest Economy and India is the world’s 5th. China is expected to be the world’s largest Economy by 2020 if not before and India could be the world’s 3rd largest economy by 2013. One of the main reasons why some analysis believes India could surpass China is because of the different demographics in terms of the age of the populations. China has a declining birth rate and an ageing population and India has the biggest educated youth population in the world.

China and India have 40% of the world’s population which equates to 2.5 Billion people and means they have a combined workforce of over 750 million people. China is the world’s 2nd fastest growing economy and India the 5th and in 2010 trade between these two Bric Partners was worth $ 60 billion dollars which was 30 times higher than 10 years earlier. China has an edge over India with its trade surplus of $ 16 Billion dollars and India’s of $ 6 Billion. China is now able to manufacture pretty much everything but India still has its limitations to being a complete Manufacturer but its improving fast and the rapid Automotive sector in India is testimony to this. China’s strength in manufacturing is that it can make cheaply, quickly and deliver to your store shelves through a well-developed supply chain quicker than any other developing economy.  With the discipline and experienced management of Chinese manufactures China is a very attractive place to do Business. India has a larger population of working age people and more importantly India has 20 times the amount of English speakers compare to China which is why India is a very favored destination for companies to outsource their back office functions and Service centers to India. India’s larger well educated English speaking workforce is one of the main reasons India is considered a challenge to China as the world number one Economy.

Politicians’ from China and India are now putting a lot of effort in forging bilateral trade partner links between each other and a lot of this is done through its Bric Partner agreements. There are Hugh opportunities in China and India to invest in each other and a lot of this is now happening in the manufacturing sector.  At the moment India has under capacity and China over capacity, it will take India 2 – 3 years to build the factories it now needs to meet its current domestic  demand and in 2-3 years it will need even more factories to further catch up. This capacity problem in India is why Indian companies are now turning to China to manufacture the products it now needs. One of the areas that India finds hard to manufacturer is in the heavy industries such as the power industry and renewable energy industry, BricPartner sees the cooperation with Chinese manufacturers producing most of India’s Wind Turbines. In General what takes China 6 months to produce in Heavy industry will take India 2 to 3 years.   

Between the four key Bric Partners of Brazil, Russia, India and China the future trade Partnership between India and China will potentially be the most beneficial between any of the Bric Partners.

BricPartner feels that as Bric Partners China and India should work together closer than compete directly against each other, as Partners there different strengths and weakness complement each other well.