Why India Won’t and Shouldn’t Be the ‘Next China’

Charriot Zhai, The China Academy, July 2, 2025 —

On June 21, we sat down in Beijing with Jyotishman Mudiar, host of the YouTube channel India & Global Left, and explored question “Will India be the ‘next China’?” The following is a lightly edited transcript of our interview, revised for clarity and readability.

Question:

In Western countries, people often ask questions like, “Is India the next China?” What’s your take on this question?

Mr. Jyotishman Mudiar:

I think this is actually a misleading way to think about the future. There won’t be a “next China” in the same sense that there was a China, because history doesn’t repeat itself.

Take, for instance, the Chinese revolution. The conditions under which the Communist Party emerged as the national leadership—whether it was in the context of imperialism or the struggle for land rights—those conditions no longer exist. We can’t simply bring them back. They might reappear in different forms, but countries have to create their own historical moments. Today, we don’t live in a world where, for a socialist revolution to occur, every country can expect a Communist Party to emerge out of a warlike situation, leading both anti-imperial struggles and agrarian land reforms simultaneously. That specific context was unique.

No country today is reproducing those same conditions. And if you think about China’s success after its economic reforms, it was also a very particular moment. Chinese industrial labor was competing against much more expensive labor in the U.S., Germany, and other Western countries. Even labor in other developing regions was relatively more expensive than China’s at the time. So it was a different situation.

Now, if India wants to industrialize, it still faces competition from China. And here’s the remarkable thing about Chinese industrialization: because of China’s sheer size and internal regional disparities, it has never moved up the value chain in the traditional way that smaller countries do.

In smaller countries, when you move up the value chain, you begin to offshore the lower-end production. But China still has a vast hinterland where per capita income is two to three times lower than in coastal regions. As wages have risen in coastal China, many assembly and production lines have moved inland. We’re now seeing new factories and industrial hubs emerge in western China. I don’t think those are going away anytime soon. So here’s the key: China is simultaneously producing airplanes, fighter jets, AI, and biotechnology and still making toys, leather goods, and textiles. It has not abandoned the low-end sectors. And it’s not planning to evacuate them anytime soon. For African and South Asian countries rethinking their industrial policies, the option of export-led growth—the way China did it—is becoming more difficult.

Secondly, we’re not living in the same globalized world anymore. Trade and global investment are no longer encouraged as they were in the 1990s and early 2000s. President Trump has run roughshod over the global trade order, and that disruption has had a major impact on investment flows. With growing uncertainty, we know capital tends to flee emerging markets and flow into safe havens in the Global North.

So the way China attracted FDI, and the way China could export at scale, may not be replicable for other countries in the next decade or so.

Also, the West is now very stagnant. When China rose in the 1980s, ’90s, and 2000s, the western economies were not in their ventilator. But now, Europe has stopped growing, and I don’t see it recovering anytime soon. There’s a persistent slump in global demand, significantly exacerbated since the 2008 global financial crisis. Even U.S. growth rates post-crisis are far below previous levels.

China has managed to add demand, but interestingly, much of that demand now feeds its own supply chains. As China faces backlash from Europe and the West, it is pivoting some of its export-led growth toward domestic consumption. This shift is notable because China’s share of domestic consumption, relative to total investment, has traditionally been low. Now, there’s more room, and increasing discussion about boosting domestic demand through various mechanisms. So a lot of the new demand generated in China will likely be consumed by Chinese industries themselves.

So, overall, I would say it’s futile to imagine India becoming the next China—if by that you mean replicating China’s path. Those paths can’t simply be retraced. However, if by “next China” you mean a country that becomes globally significant in its own way, then that’s a different question. And even there, I’m not overly optimistic about India. Not because India’s aggregate power won’t grow—it definitely will. India is growing at 7%, and will likely continue to grow for a while. It also has a large population. So in aggregate terms, India’s influence will certainly rise.

But the reality is more complex. India ranks around 111th in the Global Hunger Index. It still hosts the largest number of malnourished, stunted, and undernourished people. Literacy is still in the low 70s for males and high 60s for females.

Indian cities desperately lack basic infrastructure. When you have this kind of crisis in your own backyard, even if you show real GDP growth and increasing aggregate power, India still won’t look like China. Just walk into Indian cities—you see people begging, broken infrastructure, waste disposal systems that barely function, and inadequate public transport systems.

I do believe India can fix these problems. And if it does, and continues to grow, then yes—India will certainly be one of the major global players in the next 50 years, alongside China and the United States.