Harvard University’s Centre of International Development (CID) growth projections conclude that, "India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics."
China's economic expansion rate dropped from 6.7 per cent (2016) to 4.4 per cent and will continue for the coming decade making India the fastest growing economy till 2025 with an average annual growth of 7.7 per cent, says a new study by Harvard University.
There are various reasons behind this. Countries are divided into three basic categories:
i) Countries with too few productive capabilities to easily diversify into related products
ii) Countries that have enough capabilities that make diversification and growth easier, which include India, Indonesia and Turkey
iii) Advanced countries such as Japan, Germany and the US that already produce nearly all existing products
Thus, any major progress will require pushing the world's technological frontier by inventing new products -- a process that implies slower growth.
Factors affecting the growth rate of China
The growth rate of China which was rapid earlier has now decreased because of the decline in its exports. According to the Harvard University's Center for International Development (CID), China's rapid growth rate over the past decade has narrowed the gap between its complexity and its income. China's economic complexity ranking also falls four spots for the first time since the global financial crisis.
India on the rise
Elaborating further, Ricardo Hausmann, Director of Centre for International Development (CID) and Professor at the Harvard Kennedy School (HKS), said, "The major oil economies are experiencing the pitfalls of their reliance on one resource. India, Indonesia, and Vietnam have accumulated new capabilities that allow for more diverse and more complex production that predicts faster growth in the coming years."
The CID is a university-wide centre that works to advance the understanding of development challenges and offer viable solutions to problems of global poverty.