Is India the Next China?

With Apple having just opened two stores in India and plans to ramp up manufacturing, we can ask why. What might they expect from the Indian econmy?

The Daily, WEF, and Brookings had some answers. Together they give us a snapshot of what we might expect from the Indian economy.

The Indian Economy

The Daily Podcast

The NY Times Daily Podcast told us to keep an eye on manufacturing, women, and politics: Asking whether manufacturing will grow, they told listeners that India had the wrong kinds of jobs. Compared to services and agriculture, jobs in manufacturing had been stuck at a relatively small proportion of the economy. As a springboatrd for consumer incomes and exports, their small manufacturing sector could be problematic. While the population demographic is ideal, the jobs are not. And, exacerbating the situation, unlike countries like Banladesh, they are not committed to a specific sector and one focused strategy. Then, to all of this the NY Times report adds that women are underutilized and the nation’s politics could retard economic development

The conclusion? India is probably not the next China. But, even if it will not replace China as the world’s manufacturing hub, it has a class of aspiring entrepreneurs and a services sector that could be more impoirtant in the future.

The World Economic Forum

Looking at India in 2019, the WEF focused on the Indian consumer and a growing middle class. With a younger population than any other major economy, India (potentially) has the supply and demand sides–the work force and the buyers. However, as you read onward, the buoyancy diminishes as they allude to the need for labor force skills development and rural inclusion:

Still, citing urbaniztion, demographics, and technology, they conveyed optimism:

Meanwhile, a changing demographic will compose the benficiaries and the drivers of an increasingly prosperous India:

Brookings

Then, moving us to a third lens, Brookings started by reminding us that more than one half of the world’s consumers live in Asia. With China, India has more than a third of the global consumer class and a quarter of the world’s consumer spending (in PPPs).

But younger and more rural than China, India is different:

Our Bottom Line: India’s Future

As Yogi Berra reputedly said, “It’s tough to make predictions, especially about the future.” We do know though that we are talking about an economy that will probably not become the next China. However, what is distinctly India could take them to economic growth that is appropriate for the next decade.

Returning to where we began, I would suspect that Apple sees more than a billion people that are becoming increasingly affluent.

My sources and more: Having listened to the NY Times Daily podcast on India, I was curious about other perspectives. Although a bit dated, the ideal counterpoint was from the World Economic Forum. Then, from there, Brookings had yet a third spin on the data.