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India vs China: What Morgan Stanley said on comparison over infrastructure



A recent report by Morgan Stanley states that infrastructure in India has improved significantly in the past few years improvements in India’s infrastructure in recent years and when comparing infrastructure scale relative to GDP, it favors India over China, which is often considered a benchmark for large-scale infrastructure development.
Meanwhile, the report projects a steady increase in India’s infrastructure investment, rising from 5.3 per cent of GDP in the fiscal year 2024 (F24) to 6.5 per cent by fiscal year 2029 (F29), resulting in a robust compound annual growth rate (CAGR) of 15.3 per cent and cumulative spending of $1.45 trillion over the next five years.
As of the current fiscal year, India’s GDP is 19 per cent of China’s. However, the report indicates that India’s physical infrastructure is not significantly lagging behind China’s when considering the size of their respective economies despite China has long been recognized for its heavy investments in infrastructure.
The report further state that earlier, India’s infrastructure competitiveness has been hindered by poor infrastructure, however government initiatives like PM Gati Shakti (PMGS) show great potential for further progress.
“India’s infrastructure has materially improved in recent years – and there is significant scope for further improvements through recent government initiatives like PM Gati Shakti (PMGS),” the report stated.
India has increased its infrastructure spending over the last decade, focusing on scaling up and modernizing its physical assets.
Additionally, the report state that Government of India’s ministries have initiated long-term, sector-specific infrastructure plans to further improve various segments of the economy, including ‘Bharatmala’ for road development, ‘Sagarmala’ for port connectivity, Power for All, and the waterways development program, which are helping goods move faster and at more affordable costs than in the past.





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