The world economy is changing fast — and two countries everyone is watching closely are India and China. For a long time, China has been known as the world’s factory and one of the fastest-growing economies. But now, its growth is starting to slow down. In 2025, China’s economy is expected to grow by just 4%.

On the other hand, India is growing much faster — with a growth rate of 6.2% expected in 2025. That’s a big difference.

India has a young population, strong tech growth, and rising local demand. All of this is helping its economy rise steadily. So the big question now is: Can India really catch up with China? And maybe even overtake it in the future?

India vs China: A Tale of Two Growing Giants

When we look at the numbers for 2025, it’s easy to see a big difference between how fast India and China are growing.

According to the latest data:
India’s economy is expected to grow by 6.2% in 2025
China’s economy is expected to grow by only 4%

That means India is growing faster than China, even though China still has a bigger economy overall.

Why India Has an Advantage

India has a younger population than China, with more than 50% of its people under 30^[1]. A younger population means:

1. More people ready to work
2. More demand for goods and services
3. A strong, energetic workforce for future industries

China, in contrast, is facing an aging population crisis, which may slow down its productivity and increase healthcare and retirement costs over time.

What’s Helping India Grow?
India’s recent progress is driven by multiple factors:
A fast-growing digital economy with over 800 million internet users^[2].
Government investments in infrastructure and manufacturing^[3].
Major companies shifting supply chains to India to reduce dependence on China^[4].
According to OECD, A booming startup ecosystem, especially in fintech, edtech, and health tech.

What Is Slowing China Down?
Although China remains a powerful economy, its growth is slowing due to:
* An aging workforce^[5].
* Decreasing exports due to global tensions and supply chain shifts^[6].
* According to CNBC, A real estate crisis that is affecting banks and households.
* Less foreign investment compared to past decades^[7].

Can India Really Overtake China?
In total GDP, China is still far ahead of India. But if India keeps growing faster, it will gradually close the gap over the next 10–20 years^[8]. Many analysts believe India could become the third-largest economy by 2030. With consistent policy support, tech innovation, and global interest, India has a strong chance to reshape the world economy.

India’s economy is expected to grow by 6.2% in 2025, which is a little lower than earlier estimates of 6.5%, mainly due to global problems and trade tensions, says the IMF. Still, India’s growth is stronger than most other countries in the region, thanks to rising spending in rural areas. In comparison, growth in emerging Asian countries like the ASEAN group is falling and expected to be only 4.5% in 2025 and 4.6% in 2026.

Last year, China’s economy grew by 5.0%, which matched the government’s goal. But new trade tariffs have started to slow things down. These tariffs reduced the benefits of strong growth at the end of 2024 and more government spending. As a result, the IMF has lowered China’s growth forecast for 2026 to 4.0%, down from 4.5%, mainly because of ongoing trade tensions and policy uncertainty.

India is no longer just an emerging country — it is becoming a key global player. With faster growth, a younger population, and growing foreign interest, it is possible that India could one day catch up or even overtake China economically.The journey won’t be easy. But the signs are clear — India is rising, and the world is watching closely.

Remittances — money sent by people working abroad to their families back home — are a lifeline for millions. In 2024, these money flows reached record levels in some countries, showing how strong family bonds remain across borders.

In 2024, India became the top country in the world for receiving remittances, with around $129 billion^[9] sent home by Indians living and working abroad. This shows how important family support is across borders. Mexico received $66 billion, while the Philippines got $39 billion, both ranking high on the list.

But it’s not just about the total amount for some smaller countries, remittances make up a large part of their economy. For example, Tajikistan gets 38% of its total income from money sent by its citizens working abroad. Nepal also depends heavily on remittances, which make up 25% of its GDP.

These money transfers help families buy food, pay school fees, and cover daily expenses. Remittances play a big role in reducing poverty and supporting economic growth in many countries. Even developed countries like France and Germany are on the list, showing how global and connected our world really is.

At the top of the list is India, which received an incredible $129 billion, the highest in the world. Mexico comes second with $66 billion, followed by the Philippines with $39 billion. These countries have large populations working overseas, especially in the U.S., Gulf nations, and Europe.

Other countries in the top 10 include France ($36.9B), Pakistan ($34.1B), China ($29.1B), and Bangladesh ($22.1B). Interestingly, some smaller countries like Guatemala and Egypt also make the list due to the strong support from their citizens abroad. These funds help families with education, healthcare, and daily needs and in some nations, remittances are a key part of the national economy.

Here are the top 10 countries where remittances make the biggest share of the national income in 2024.

Leading the list is Tajikistan, where remittances are an amazing 38.4% of its GDP! Close behind is Tonga, with nearly 42%, showing how vital this money is for their daily life. Other countries with high shares include Lebanon (30.7%), Nicaragua (26.1%), and Honduras (26%).

Countries like Nepal (25.4%), El Salvador (24%), and Lebanon show how important remittances are for supporting families and boosting local economies. Even small islands like Bermuda (21.5%) and Comoros (22.6%) rely on remittances for a big part of their GDP.

In these places, remittances don’t just help families—they’re key to the country’s survival and growth.

Remittances form a small fraction of GDP in several major economies. Leading the list, Kuwait and Angola both have an extremely low remittance share of 0.01%, reflecting minimal dependence on money sent from abroad. The United States follows with only 0.03%, while Chile and Papua New Guinea register similarly low shares of 0.02% and 0.03%, respectively. Other countries with low remittance shares include Japan (0.11%), China (0.16%), Uruguay (0.17%), Cayman Islands (0.18%), and Israel (0.19%). These figures highlight limited reliance on remittances compared to countries where they play a vital economic role.

Here is the comprehensive data listing all countries and the remittances they have received^[10][11]. This dataset provides valuable insights into the flow of remittance funds across the globe, highlighting the economic impact of money sent home by migrant workers. It covers remittance amounts and their share as a percentage of each country’s GDP, offering a detailed overview of how significant remittances are to different national economies.

Dataset of remittance-receiving countries

India, the most populous country in the world, is also the fourth-largest economy globally, with a GDP(nominal) of approximately $4.2 trillion surpassed Japan’s economy in 2025^[12].

According to the International Monetary Fund (IMF), India is on track to surpass Germany and become the world’s third-largest economy by 2027. The IMF projects that India’s nominal GDP will exceed that of Germany by the second quarter of that year^[13]. This outlook was also confirmed by Union Minister Piyush Goyal, who stated that India is expected to achieve this significant milestone by 2027^[14].

Factors behind Indian Economy growth

1. Young population: Over 65% of Indians are under 35.
2. India has a growing working-age population (~900 million by 2030), creating a large labor force and consumption base. According to EY, by 2030, India is projected to have 1.04 billion working-age individuals, with a dependency ratio of 31.2%, the lowest in its history^[15]. It’s estimated that by 2030, one in five working-age individuals worldwide will be Indian^[16].
3. Rising urbanization and middle-class growth will further boost demand.
4. Digital Public Infrastructure: India has developed a comprehensive digital infrastructure known as India Stack, which includes components like Aadhaar for digital identification and UPI for real-time payments^[17]. In May 2025, UPI transactions reached a record 600 million per day, highlighting the rapid adoption of digital payments^[18].

5. Manufacturing & Export Initiatives: The Production Linked Incentive (PLI) schemes aim to boost manufacturing in sectors like electronics, pharmaceuticals, and textiles^[19]. India announced a $2.7 billion PLI scheme to enhance its electronics manufacturing sector, aiming to attract $7 billion in investments and create 91,000 jobs over five years^[20].

6. Economic Reforms & FDI Inflows: Between 2014 and 2024, India received over $500 billion in FDI, with $300 billion coming in between 2019 and 2024, indicating accelerated growth^[21]. Reforms like the implementation of GST have streamlined taxation, enhancing efficiency and attracting more foreign investment^[22].

Challenges India Must Overcome

While India is on a strong trajectory to become the world’s third-largest economy, sustaining this momentum will require addressing several critical challenges:

1. Jobs Creation: India needs to create 8 to 12 million good-quality jobs every year, especially in areas like manufacturing, IT, and clean energy. These jobs should be in the formal sector and require higher skills^[23]. Right now, more than 80% of jobs in India are informal, which means most workers have low income security and poor working conditions.

2. Skilling the Workforce: There is a gap between what students learn and what companies need. India produces around 900,000 engineers every year, but there aren’t enough skilled workers for jobs in areas like AI, semiconductors, and advanced technologies^[24]. Programs like Skill India, training through ITIs, and job-focused courses are important to help fill this gap^[25].

3. Climate Resilience & Energy Transition: India aims to achieve net-zero carbon emissions by 2070. To do this, it needs to balance its fast economic growth with a shift to clean energy and modern power systems^[26]. Some key challenges include fixing electricity pricing issues, improving the power distribution network, and reducing its heavy use of coal^[27].

4. Bureaucratic Efficiency & Corruption Reduction: Even with government efforts like Make in India and the PLI scheme, slow approvals, complex rules, and corruption still make it hard for businesses and investors^[28]. To attract more investment and support manufacturing, India needs to simplify processes and make the system more transparent.

5. Healthcare & Education Reform: To make the most of its large young population, India needs to improve public healthcare and education, especially in rural areas. Building a stronger, healthier, and better-educated workforce will help boost the country’s productivity and long-term stability.

GDP current prices (Billions of U.S. dollars)