An easy but instructive way to bait an Indian economist is to credit the Chinese economy with coming to Asia’s rescue and arguably the world’s. It is, claims the economist, an example of anti-India bias. Why does India not get equal credit for robust growth? In all the frothy coverage about Asia’s amazing rebound, including in The Economist, where is India? “You’d think”, the economist complains, “that India isn’t even part of Asia.”

To what degree India’s economy is part of a vibrant Asian whole has long been a preoccupation among Indian policymakers. Now the global slowdown has given the debate a keener edge, for it has disproportionately hit the commercial markets in America and Europe to which India traditionally looks. “Look East”, long an avowed tenet of government policy, is in vogue.

There is something to the economist’s complaints. For all the credit that it gets for its recovery, China’s near double-digit show this year is mainly a command-economy extravaganza involving massive state-directed spending. When that show is over, the skew in China’s economy—an undervalued currency, a mercantilist bias in favour of manufactured exports and an obsession with accumulating foreign reserves—remains less the solution to global imbalances than one of the fundamental causes.

By contrast, though India’s annualised growth rate of around 6 per cent this year is below China’s heady levels, it is impressive against a backdrop of global turmoil. What is more, government stimulus plays only a small part in the growth. Levels of capital and infrastructure investment compare favourably with China’s. And, much more than in China, the hot story in India is domestic demand. India is no mercantilist adding to global imbalances. It imports more than it exports, creating much needed global demand. India’s long-run growth will overtake even China’s.

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