India and China will witness steady high growth rates of 8.8 and 10 per cent respectively in 2010, and Asia will continue to lead global recovery, according to the latest communication by International Monetary Fund (IMF) officials in April 2010.

Furthermore, India and China continue to attract high rates of investment. At 35 per cent and 42 per cent of gross domestic product (GDP) respectively in 2008-09, the levels of gross domestic fixed capital formation in India and China are the highest in the world. The rising rates of investment in India and China, as opposed to declining rates in Japan and South Korea, have led to the former replacing the later as Asia's powerhouses.

Moreover, according to the global management consulting firm, Boston Consulting Group's (BCG), in its10th annual Global Wealth Report released in June 2010, India and China will generate triple the growth of other countries from 2009-end to 2014.

Furthermore, Moody's Analytics predict that led by India and China, most of the Asian economies will expand in 2010 and 2011. As per the report released in June 2010, "China will lead (growth in Asia this year), expanding around 10 per cent followed by India and Vietnam at around 8.5 per cent".

According to PricewaterhouseCoopers (PwC), Indian and Chinese firms will lead a host of new multinational firms from emerging economies over the next 15 years. India and China will account for 42 per cent of the new multinationals over the next 15 years, with India overtaking China in producing multinationals from 2018. More than 2,200 Indian companies are expected to open operations overseas over the next 15 years, overtaking China because of easing foreign investment rules.

Trade

Trade has been the vital part of strengthening the bilateral economic relationship between the two countries. In 2008-09, China was India's second largest trading partner after the UAE. Bilateral trade engagement between India and China stood at US$ 41.85 billion in 2008-09, an increase of nearly 10 per cent over US$ 38.02 billion in the year ago period, according to data available with the Ministry of Commerce and Industry.

Imports from China expanded 19 per cent and stood at US$ 32.5 billion in 2008-09, while exports were at US$ 9.35 billion. During April-December 2009, exports to China have been US$ 7.3 billion, while imports from China have been US$ 22.57 billion. During April-December 2009, China has overtaken the UAE to become India's largest trading partner.

Investments

With increased mergers and acquisitions (M&A) both India and China are aggressively redrawing the global landscape through their M&A deals.

According to UK-based Chartered Management Institute's study released in March 2008, India and China (along with Brazil and Russia) would exert a greater influence on business markets and transform the business landscape by 2018.

In addition, India and China are expected to see the highest-ever rise in private equity (PE) investments from new and existing investors over the next two years, according to a survey by global PE firm Coller Capital, titled "the Global PE Barometer" report, which was released in June 2010. As per the bi-annual survey of trends PE, investors — mainly from Europe — plan to boost their exposure to the Asia-Pacific region over the next three years. "Of those, China and India will see by far the largest increase in PE investment from new and existing investors ....over the next two years," the report stated. The survey further revealed that 44 per cent of the global PE investors studied, want to either expand or invest in India, while 53 per cent plan to do the same in China.