India vs China in 40 years: TRUST MF CIO Mihir Vora - 'India compounded GDP growth at 7.3%; China broke out at 11.3%'

India's economy expanded 15.7-fold over four decades, compared with a 65.1-fold expansion in China, according to a Credit Lyonnais Securities Asia (CSLA) data shared by Mihir Vora, chief investment officer at TRUST Mutual Fund.

In a post on X – titled "40 years of Asia" -- Vora highlighted how a difference in annualised growth rates can dramatically alter the relative size of economies over time while comparing India with China and other major Asian economies.

He compared the nominal gross domestic product (GDP) of India and China in 1986 with estimates for 2025, using figures from CLSA.

According to the data shared by Vora, India's GDP rose from $249 billion in 1986 to an estimated $3.916 trillion in 2025, while China's increased from $301 billion to $19.626 trillion in the same period.

India's GDP compounded at an annualised rate of 7.3% over the four decades, compared with 11.3% for China, as per the CLSA data.

China's economic expansion outpaces India

The comparison also shows that India and China had broadly comparable nominal GDPs in 1986, with China's economy only moderately larger than India's. By 2025, however, China's estimated GDP was about five times India's.

China's GDP expanded 65.1 times over the period, compared with 15.7 times for India.

"Compounding an extra 4% per year for 40 years has made China grow its GDP 4 times more than India - starting from similar sizes in 1986," Vora said.

The comparison also placed India alongside other Asian economies. South Korea's GDP expanded 19.1 times between 1986 and 2025, while Malaysia's grew 17.5 times. Singapore recorded a 30.2-fold expansion, according to the chart shared by Vora.

Japan, by contrast, recorded a 2.1-fold expansion over the period, with its GDP rising from $2.12 trillion in 1986 to an estimated $4.435 trillion in 2025.

Why compounding matters

Vora's argument centres on the long-term effect of compounding. When an economy grows at a higher rate year after year, the gains accumulate, creating large difference in economic output over several decades.

A gap of four percentage points in annualised growth can have a significant impact even in a single year. Sustained over 40 years, the difference can compound dramatically, result in a significantly different economic outcome.

Vora said that every percentage point of annual growth matters and argued that factors working against ease of doing business should be addressed immediately.

"So each % of growth per year is important and anything that is anti - 'ease of doing business' should be addressed immediately," he said.

The figures of the CLSA data are nominal GDP measured in current US dollars.