26 Apr 2019

By Yash Choudhary. (ASC Solicitors & Advocates)

As India takeover China in FDI inflows for the first time in 20 years, in 2018, India saw more than $38 billion of inbound deals compared with China’s $32. The question arise is this the time to invest in India and take the full advantages India gives with a constant GDP growth 0f over 7%?

Why is India a better investment bet then China?

  1. China may be the largest up-and-coming economy, pasting India in many economic and financial indicators. But India is Beating China in the Indicators that matters the most to emerging investing: financial market development. This means India is less prone to a financial crisis than china, therefore, a better investment than china. In Financial market development, where India beats China. India ranks 38, while China ranks 56.
Ranking China India
Population (millions) 1374.62 1254.02
Per Capita GDP ($, Dec2015) 6416 1806
Human Development Index (2015) 90 130
Entrepreneurship Index (2016) 60 98
Economic Freedom Index (2016) 144 123

India’s Competitive Performance in world ranking

Country China India
Overall 28 39
Institutions 45 42
Infrastructure 42 68
Macroeconomic environment 8 75
Health and primary education 41 85
Higher Education and Training 54 81
Goods market efficiency 56 60
Labor market efficiency 39 84
Financial market development 56 38
Technological readiness 74 110
Market size 1 3
Business Sophistication 34 35
Innovation 30 29

Source: World Competitiveness Index, World Economic Forum.

  1. India is a stable democracy, the fundamental rights of humanity and equal opportunity for development of a person are not suppressed in India and if in any case it is done so, people have full right to dissent against it and we have a free and intellectually strong media to strengthen the protest unlike in China.
  •  India has more “SOFT POWER” than China. “SOFT POWER” is defined as the ability to influence the thoughts and decision of other countries .China’s rise is seen by its neighbouring and contemporary countries as alarming and they view it with caution .Whereas India’s rise is viewed as a rise of all the peace loving countries of the world because of the Indian that the world is my family. Not only do Indians have this philosophy but their actions prove it true. In USA and almost all countries where Indians have settled they have only made a difference positively.
  • India has the advantage of demographics and democratic stability. More than 65% of India’s population is below 35. The young and skillful labor is a key growth factor which is driving Indian economy and the present government is focusing on this with the successful government program called “SKILL INDIA”.

Conclusion with the statistics market in recent time.

…Last 5 years

India – Sensex up 84.19 percent

China – Shanghai Composite Index up only 40.70 percent

Annual FDI inflows in the country are expected to rise to US$ 75 billion over the next five years, as per a report by UBS.

India has become the most attractive emerging market for global partners (GP) investment for the coming 12 months, as per a recent market attractiveness survey conducted by Emerging Market Private Equity Association (EMPEA).

The Government of India is aiming to achieve US$ 100 billion worth of FDI inflows in the next two years.

The World Bank has stated that private investments in India is expected to grow by 8.8 per cent in FY 2018-19 to overtake private consumption growth of 7.4 per cent, and thereby drive the growth in India’s gross domestic product (GDP) in FY 2018-19. That’s why I’d rather bet on Indian rather than Chinese equities at this point and it is the right time to come invest in India.

Bibliography

Online resources only used and sited for educational purpose.<犀利士 /strong>