The world’s two fastest-growing major economies are China and India. In 2019, China’s per capita GDP growth was 6.1 percent, and India’s 5 percent based on World Bank data. The two countries also have the most rapid rates of growth of household and total consumption. Both China and India are growing far more rapidly than Western economies.

India joined the global market mostly during the Cold War. Once established in the global market, India became a productive nation and developed several strong working relationships with other countries including the United States. India has created such a healthy relationship with the U.S. that the U.S. is amongst India’s most significant investment and trade partners.

Its relationship with the U.S has substantial benefits because the U.S. is the world’s largest consumer. On top of that, India is looking for investors to help fuel the growth of its economy. The U.S. can offer a significant helping hand by providing investor connections and increasing India’s

Besides trade and investment, the U.S.-India Strategic Dialogue, launched in 2009, provides opportunities to strengthen collaboration in areas including energy, climate change, trade, education, and counterterrorism. Indeed, President Obama has called India one of the defining partnerships of the 21st century, one which will be vital to U.S. strategic interests in Asia-Pacific and across the globe.

Continued growth over the last decade has provided confidence and energy to India’s economy.

Nevertheless, India faces and will continue to face economic obstacles that will need to be overcome, and which have decreased its GDP growth in the past years: Firstly, only 30 percent of its female workforce is employed. Secondly, 70 percent of India’s population, the rural poor, only account for 17 percent of Indian GDP. Thirdly, India has problems with its industrial strategy which currently has no direction.

A primary reason for that is that the strong global competition combined with India’s inferior socioeconomic infrastructure creates little appeal for foreign direct investors. India’s industrial growth has been in the Information Technology (IT) area. But, as the rapidly growing IT sector sets in, India will unable to keep up with the demand for skilled software engineers.

Although India faces significant red tape, corruption, and inefficient politics, Harvard economist Robert Barro agrees that India will grow quicker than China in the third “super-cycle.” A contributing factor to this is China’s decreasing working-age population — due to the Chinese government’s now rescinded one-child policy — and India’s extensive working-age population growth. In addition, many believe that India’s economy will see great success with Modi at the Helm.