HSBC economists Frederic Neumann and Justin Feng stated in a report on Friday that although India's economic growth in recent years has been impressive, it is unlikely that India will replace China as the main growth engine of the world economy in the short term. They stated that India has "too little growth momentum", while China is "too big and its importance to the world economy will not be easily overshadowed".
HSBC expects that the gap between these two economies will continue to widen in the foreseeable future. According to the International Monetary Fund (IMF) forecast, by 2028, China's economy will be $17.5 trillion larger than India's, which is equivalent to the current size of the EU's economy. Last year, the economic size gap between the two was approximately $15 trillion.
Frederic Neumann and Justin Feng stated that even assuming China's investment expenditure growth is zero and India's investment expenditure growth is three times the average in recent years, it will take 18 years for India's investment expenditure to catch up with China.
However, HSBC economists also expect India to make a significant contribution to global demand for commodities, consumption, and capital goods. They stated that India may become a "larger participant in global trade, possibly playing a key role in service exports similar to China's role in the commodity supply chain today".