India on the brink of explosive growth - Parallels from China

If we compare India's per capita income trajectory against China we notice that India was ahead of China in terms of per capita Income until 1990. Fast forward to 2022, China's per capital income stands at USD 12,720 while India's per capital income stands at USD 2,389

Statistically, India stands at exactly where China was back in 2006-07 i.e at the cusp of exponential growth. Between 2007-22, China witnessed 10% compounded growth in per capital income. This growth of China's per capita income was witnessed through the expansion of China's middle class, their domination of global trade of several good and services, and their emergence as a potential super power.

Source: World Bank

India has several tail winds that can potentially support a similar sharp rise in per capital income over the next decade. Few such tail winds include a stable democratically elected government with a strong focus on development, healthy corporate balance sheets, favorable macro tailwinds supporting a China + 1 strategy on the supply chain and manufacturing front across sectors.

If India's per capital income were to grow at the same rate as China over the next decade, it would stand at close to USD 6,300, which would be 2.6x of 2022 levels.

No one can predict the future however the odds are clearly in India's favour to achieve this exponential growth.