The crouching tiger pounces
India pips China for second spot in GDP ranking
It’s official, India is now the second largest global economy. Having joined the club of economic giants in 2025 in third spot, India had a long way to go to catch China, which had four times the GDP. But India’s rise in the economic ranks has been nothing short of meteoric.
A combination of liberal democratic reforms, slashing red tape, and awakening India’s natural bent for entrepreneurship, has seen the country soar like its space agency ISRO. With the internet’s biggest English-speaking community and the world’s largest workforce, India was perfectly poised to dominate the global services economy birthed by the ‘information age’ and capitalize on the demand for virtual workers.
But it was China’s rivalry with the United States that really fueled India’s growth spurt. As the US decoupled from China, they found Indian suppliers more than willing to provide anything from auto parts to custom electronics – at Asian prices. A longtime ally of America, India benefited from technology transfers and free trade agreements.
For its part, China floundered as India flourished. The triple whammy of population decline, consumer retreat, and the US trade war turned rampant growth of previous decades into economic stagnation. Faced with a declining birth rate and aging workforce, China’s leaders desperately tried to rebalance their economy. But the heavy hand of state planning didn’t sit well with the new world order, and getting closer to Russia and Iran has not brought China much benefit other than cheap oil.
Now India has surpassed China in purchasing parity terms, according to the IMF, and the United States remains the world’s largest economy, since 1871.
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