India and China have been economic powerhouses in Asia and are often seen as competitors and friends by many analysts across the globe (Gladun, 2017). The west is keenly looking at their performance as the US does not want to dethrone itself and replace the global superpower tag to China. Hence, the US is always critical about all the moves of China. India has been a sober partner and is growing lose to the US and Russia, despite its burgeoning trade relationship with China (Kiely, 2008). Although they are capable of growing to great superpower of the future, they are both facing internal and external challenges alike. A more specific and detailed analysis of their difficulties is required to sum up their future prospects.
Additionally, it is fighting an internal battle of trade deficits that is killing its domestic economy. For example, it has a trade deficit of almost $60 billion with China, which is killing the motivation of domestic players and private companies to reinvest in the economy. Private companies are less inclined to invest in an uncertain market, especially when there is dismal support from the government (Maddison, Prasada Rao and Ark, 2013).
Modi had promises 10 million new jobs in 2014 when he took over as the Prime Minister, but the scenario is not conducive to job growth (Maheshwari, 2017). The government has failed its promise and has gifted jobs to other nations by reserving reforms and remaining a listener and obedient nation to the hegemonic bodies of WTO, the World Bank and the IMF. Infrastructure growth is depressingly slow because international investments are taking a toll.
India is also facing the challenge of giving its farmers a substantial and lucrative policy. India has a Minimum Support Price (MSP) which is the fixed price for all farm produce. It is used when the prices go down steeply and the government comes in and purchases the produce at the fixed rates. This is not working across the country, because every state has a different climate pattern and pricing models. A nationwide fixed price fails to cheer markets. To its dismay, India farmers have remained broke under debt and unable to pay even paltry loans precisely because their income has remained stagnant due to political meddling (Yadav, 2017). With inflation and rise in minimum income, their incomes have remained low. One of the reasons is the India’s bilateral trade agreements with the western nations to import cheap farm products. This challenge shall turn into a revolt if not resolved.