India's growth capped below China's historic levels, Morgan Stanley

According to Morgan Stanley’s chief Asia economist, Chetan Ahya, India is unlikely to achieve the remarkable 8%-10% economic growth rates that China accomplished over the long term. Ahya predicts India’s economy will likely grow steadily at a rate of 6.5%-7% in the long term.

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He attributes this projection to constraints such as inadequate infrastructure and a low-skilled workforce, which hinder India’s growth potential. Despite these challenges, Morgan Stanley remains optimistic about India’s prospects, comparing the current expansion to the mid-2000s boom fuelled by rising investment.

Ahya acknowledges India’s growing influence on the global stage, citing increased capital flows and a rising share of global foreign direct investment. However, he believes that India’s manufacturing sector is unlikely to compete significantly with China in the near future due to China’s advanced manufacturing capabilities and diversified industries.