In this month’s Doom, Gloom, and Boom report Marc Faber reminds us why India has a for more sustainable long-term growth story than China due to a population that will keep growing through 2050 and a far more developed political landscape (even if China has the more developed industrial one).
Sure China will likely be the dominant growth story for the next decade or more, but India will be rapidly growing as well.
Keep in mind Indian GDP just blew away expectations, accelerating to a 20 year high last week.
In the year to March 2009, India added 125 million mobile phone subscribers! And whereas Indian auto sales are tiny compared to China’s vehicle sales (running currently at an annual rate of over 12 million units and up over 90% year on year), they are nevertheless up 39% year on year, with an annual rate of 1.6 million sales.
India’s middle class is estimated at 170 million (half the population of the US), and the country has one of the lowest vehicle-penetration rates in the world. Given that India also has one of the youngest populations—half of its 1.1 billion-plus people are less than 25 years old, compared to 42% in Brazil, 36% in China, and less than 30% in the developed nations—car sales will undoubtedly continue to soar in the next few years. In this respect, we should also take into account that India’s population will continue to grow rapidly and will exceed China’s population before 2030.
McKinsey estimates that by 2025, India’s middle class (households with disposable incomes of from 200,000 to one million Rupees a year) will increase to close to 600 million people, or more than 40% of the population.