India and China had started a journey from the same point in 1990 in terms of economy, both were on the same page, in many aspects even India was ahead, but after almost 28 years, it has lagged far behind and it’s almost impossible to match. The leadership vacuum after the demise of PM Shree Rajeev Gandhi was experienced, the whole decade 1990-2000 was spoiled due to frequent leadership changes, that decade was proved to be the deciding factor which created a huge gap between India and China in terms of economy. China grows with an average 9 percentage in terms of GDP in comparison India was growing with an average 5 percentage, it put a huge effort in Infrastructure development and rebuilding, on the other hand, Indian leadership was busy in doing socialist reform and their priorities were to win the election.
The most disastrous mistake our government committed during 90’s that it didn’t pull out itself from the Russian bloc. India had a huge opportunity to grab the chances of being a democratic system to mend its relation with west to gain the investment and the technology. The withdrawal could have boosted the economy, in terms of FDI and technology transfer, it could have got the access of high wages economy for trade, China took great advantage of it even it was not a like country in west, Chinese acceptance in those nations were least, but thinking a big market they apparently accepted, which helped it to become world manufacturing hub and growth engine. India could have been there in place of China, had the Indian leadership competent enough, India had not invested in the infrastructure development and least bothered about the restructuring and rebuilding the nation, widespread infrastructure development has driven China to become manufacturing superpower.
India got a stable government in 2000 and thereafter the government started withdrawal from Russian camp and started looking into options in western world, although till that time we had already lost manufacturing industry to China but India heavily picked up in the service industry, Indian IT service alone reached beyond US $150 billion markets, 90 percent of export goes to Western Europe and the United States. Now the service industry which has become backbone for the Indian economy is facing serious threat as the government is not prepared enough for changes taking place, human resources are not getting up skilled, it has failed to evolve any mechanism for it, it has been facing strong competition with ASEAN, Chinese evolving service industry, the governments in the United States and Europe are also trying to stop the outsourcing the jobs as the unemployment is growing due to automation and other technology.
Chinese manufacturing industry has reached to trillions of dollar and has become the 2nd largest economy in the world, it has become the cash-rich economy unlike India, it has been aggressively investing in its neighborhood in Pakistan, Nepal, Bangladesh, Myanmar, Sri Lanka, Maldives, the growing presence of China in its neighbor posing serious national security threat to India, as India and China has conflict on almost 4 thousand long border. There are only a few options India has now first wait for Chinese collapse which is unlikely to happen and another one is to accept the Chinese growth and development and engage for the mutual benefit, the policy to contain China could not work for India, it could only increase uncertainty in the region.
