After the death of Mao Zedong the Chinese government adopted far-reaching market-oriented reforms and is now booming economically. However, the so-called People’s Republic of China is not yet free: The Communist Party resists political democratization and continues to interfere in economic matters. Indeed, China faces economic distortion, social instability, and political uncertainty.

Yet economic growth is still expected to hit 8.5 percent or even nine percent this year, while Chinese officials have reduced their predictions for the PRC to seven percent. If New Delhi systematically reformed its policies, India could consistently outgrow and eventually overtake China.

India’s widely dispersed Diaspora — apparently the world’s largest after Mexico — also could help spur future economic growth. Ethnic Indians have demonstrated their entrepreneurship around the globe, including in America. A more prosperous India already has begun to draw its sons and daughters back home. More reform would encourage more investment and trade from emigrants.

India has inked a free trade agreement with ASEAN and is discussing widening the pact to investment and services. New Delhi also has negotiated a free trade agreement with Japan. Moreover, India is active in Burma, heretofore almost a satellite of China.

The U.S. and New Delhi have improved their relationship. A formal alliance is not in America’s interest and Indian officials won’t act as Washington’s tool to contain the PRC. However, both nations have an incentive to cooperate in constraining China’s potentially aggressive tendencies. Washington’s best strategy would be to act as an off-shore balancer, ready to aid friendly states if necessary, but leaving most disputes to the latter. The rise of India makes such an approach much easier. The Asian nations increasingly are able to provide for their own security.

China is rising. But so is India. It has core strengths — competitive private companies, a vast cohort of competent engineers and managers, a growing middle class and the cushion of long-term stability provided by democracy. However, New Delhi needs to recommit itself to economic reform for its people to fulfill their enormous potential. If India does so, it will share in the leadership of the 21st century. And the world will likely be freer and more prosperous as a result.   Source: Forbes Magazine in 2011.

In 2010 United States and India signed an agreement of Framework for Cooperation on Trade and Investment. This agreement strengthens bilateral cooperation and seeks to build on recent rapid growth in US-India trade, which has more than doubled over the past few years. http://www.ustr.gov/webfm_send/1724

“There is almost limitless potential for growth in trade between our two countries, and that can contribute to economic recovery and job creation in the United States and continued economic growth in India. We can realize that potential by working together towards the goals set forth in the Framework agreement, such as developing and enforcing policies that encourage technological innovation, increasing agriculture, services, and industrial goods, and increasing investment flows. Closer collaboration with entrepreneurs and private sector leaders in both countries will enhance our work” : US Trade representative Ambassador Ron Kirk after signing the Framework for Co-operation on Trade & Investment with Indian Minister for Commerce and industry, Mr. Anand Sharma in 2010.

Over the past decade the Indian Economy has witnessed a paradigm shift and is on a robust growth trajectory. The Indian economy today boasts of a burgeoning annual growth rate, deep capital markets and liberalized foreign direct investment (FDI) regime. India is one of the few economies to have weathered the recent global financial crisis and its gross domestic product (GDP) has been growing and will continue to grow in excess of 8 per cent per year. The country's GDP has been growing at an average rate of 8.6 per cent for the last five years. India's GDP growth projection is 8.5 per cent for FY11.

India’s economy has strong fundamentals and is host to several eminent global corporate giants that are leaders in their respective fields. According to the Global Competitiveness report 2010-11, India ranks 51st among 139 countries. India ranks higher than many countries in key parameters such as market size (4th) and innovation (39th). It also has a sound financial market (17th). According to UNCTAD's World Investment Prospects Survey 2010-2012, India is the second-most attractive destination for FDI in the world. Indian markets have significant potential and offer prospects of high profitability and a favorable regulatory regime for investors.

However, as per the office of the United States Trade Representative (USTR) India was the United States' 17th largest goods export market and 14th largest supplier of goods imports in 2010. While China, Japan, South Korea and Taiwan have already been among the top 10 trading partners of the US;  With a population of more than 1 billion and being an emerging economy in today’s world with a consistent above 8% GDP growth rate for the last five years and a buoyant younger middle class  of a size that is equal to the total US population, the total US-India trade could easily be far better and much higher than what we have at present.