This document compares the economies, agriculture sectors, and foreign direct investment (FDI) levels of India and China. It notes that India has a market-based economy and is the world's second largest labor force, while China has transitioned to a more capitalist system from a centrally planned economy. Agriculture contributes a larger percentage to India's GDP and employs more people, but yields are lower than in China. China attracts significantly more FDI than India due to its rapid growth, infrastructure, market size, integration, and political stability. The document also lists ways India could increase its FDI, such as improving infrastructure, reducing corruption and bureaucracy, and accelerating reforms.

2. POPULATION

3. ECONOMY
INDIA
 Market based system
 Foreign trade and foreign
investment as integral part
of Indian economy
 Fastest growing economy
 World’s second largest labor
force
CHINA
 Centrally planned Economy
 Private businesses and
capitalism were suppressed
 Privatization of Farmland
 Promotion of foreign
investment
 Flourishing small scale
entrepreneurs

4. What are India & China famous for today ?

5. AGRICULTURE
INDIA
 India is an agricultural country.
 Growth of service sector is
pushing down the contribution
of agriculture.
 Contributing 13.2% of the GDP.
 Largely depends on monsoon.
 Provides employment to two-
thirds of the total population.
 15% of export earnings
 Rural women play a vital role,
50% of rural labor force.
 Yields per hectare of crops in
India are very low
CHINA
 Agriculture accounted for 10.6 %
of the GDP
 33o million- over 45% of labor
force still makes living from
farming.
 Farming methods have been
improved in China.
 China produces wheat, rice,
potatoes, peanuts, millet, cotton.
 Only 15 percent of the total land
available in China can be
cultivated.
 more than 75 percent of the
total cultivated land is used for
producing food crops.

6. COMPARISON

7. Comparing India and China’s Growth Stories
Indicators India China
Political System Multi-party
Democracy
One-party
authoritarian rule
Speed of Growth Economic reforms
started in 1991.
Average 6% growth
rate in past two
decades.
Economic reforms
started in 1978.
Average 9.5% growth
rate in past two
decades.
Areas of
Specialization
Rising power in
software, design,
services, and
precision industry.
Dominant in mass
manufacturing,
electronics and heavy
industrial plants

8. Comparing India and China’s Growth Stories
Indicators India China
Gini index
(standard measure
of inequality)
36.8
47.0 (up 10 points
from 15 yrs ago)
Foreign Direct
Investment
6.8% (up from 0.3%
in 2004)
17.8%
Future Areas of
growth
R&D, bio-
technology, high-
value IT enabled
services (legal,
medical, engineering
architecture),
manufacturing, agro-
based industry
IT business, services
and continued
manufacturing

9. Why India lags behind china in FDI
attraction?
The main reasons are:-
 Political structure
Infrastructure gap
Monetary and fiscal policies
Productivity
Bureaucracy
Availability of capital
Transport costs
Corruption

10. Why china is best FDI destination?
The main reasons are:-
Rapid economic growth since
reform period
Infrastructure availability
Abundance of labor and its low cost
Rapid expansion of china's domestic market
Role of overseas Chinese
Increased integration with the world
Labor laws
Political system and stability

11. HOW CAN INDIA ATTRACT MORE FDI ?
 Political restructuring
 Promote agro based export industries
 Remove corruption
 Increase infrastructure investment
 Accelerate privatization efforts
 Improve educational fitness
 Remove FDI hurdles
 Provide monetary and fiscal benefits
 Reduce delay in Approving FDI projects