As India's economic growth surpasses that of the United Kingdom, it has sparked rampant discussions about its potential to outpace ChinaOver the past few years, Prime Minister Modi has certainly gained significant attention on the international stageThe two leading developed countries, the United States and Russia, have expressed keen interest in forging closer ties with IndiaHowever, amidst this backdrop of geopolitical maneuvering, can India realistically expected to surpass China?

On February 16, a surprising article from Indian media took an unprecedented stance, recognizing that in a span of a decade, India has not only failed to catch up to China but has actually fallen significantly behindThis revelation marks a notable shift in the narrative often led by Indian nationalists, who have long basked in the idea of India's impending economic ascendancy.

The recent breakthroughs in military technology, specifically the unveiling of the sixth-generation fighter jets and the cutting-edge DeepSeek technology, have only exacerbated feelings of anxiety within IndiaObservers are left questioning how China, which has faced relentless sanctions and restrictions from the West, can achieve such milestones in military science when India's highly skilled intellectuals, who are largely integrated into American corporate giants like Wall Street and Silicon Valley, seem unable to replicate this level of advancement.

So, is it fair to say that the allure of India has waned?

DeepSeek, with its reputation for delivering high-performance solutions at relatively low costs, has caught global investors' attention and renewed interest in China's technological capabilitiesUnlike American tech companies that heavily advertise their achievements and build expectations among stakeholders, Chinese firms prefer a more understated approach, focusing instead on delivering results.

DeepSeek is no exception—it hasn't necessarily redefined technological boundaries, yet its influence was significant enough to lead to the largest single-day drop in American tech stocks, prompting Western nations to impose bans and restrictions

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The success of DeepSeek can largely be attributed to its ability to leverage algorithms in the face of hardware deficits, defying conventional methods where American tech firms focused heavily on massive cash inflows to enhance computational power.

According to Bloomberg, the artificial intelligence wave ignited by DeepSeek has led to a remarkable rise in China's total market value—over $1.3 trillion—over the last month in both onshore and offshore markets, amidst renewed expectation for economic stimulus by Chinese authoritiesIn stark contrast, the previously celebrated Indian capital markets have diminished by more than $720 billion.

Recent reports highlight that emerging markets in Asia, excluding the Chinese A-shares and Hong Kong stocks, witnessed a net outflow of foreign capital amounting to $1.7 billion in just one week, with India and ASEAN countries accounting for $600 million of this total.

On February 12, India’s benchmark SENSEX index experienced a sharp decline, plummeting over 900 points, marking its sixth consecutive day of lossesIn a similar vein, the Nifty 50 index faltered, falling by more than 1% to around 22,798 points.

The combination of shrinking corporate profits and decreasing economic growth rates in India has driven investors to distance themselves from the Indian stock market, while assets in China appear increasingly attractive due to the surge of emerging companies like DeepSeek.

This shift in capital market dynamics reflects, in some measure, the respective state of economic development in each country.

As a country with a population comparable to China's, Modi has harbored ambitions of India becoming a global powerDuring a time when China faces significant external pressures from the West, India has managed to navigate its relations with both the United States and RussiaDespite the influx of Indian intellectuals into influential positions within Western companies, recent publications in Indian media have begun to accept the harsh reality that India has significantly lagged behind China.

Since embarking on economic reforms in 1990, India and China were initially on similar footing

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However, today China's economy is six times larger than India'sTake, for instance, the fact that two sixth-generation aircraft prototypes from China were successfully tested in December, a feat that positioned China as the first nation globally to achieve this milestone, while India remains stuck in the conceptual and design phases of its own sixth-generation fighter program.

The IMF's projections for 2024 indicate that China will still occupy the second spot in the global GDP rankings, with India firmly in fifth placeChina's total economic output is projected to be 4.78 times that of India, and its per capita GDP is 4.81 times greater.

Despite facing numerous sanctions, China's rise in the artificial intelligence sector continues unabated, as exemplified by the emergence of DeepSeek, which has substantially shaken the tech landscape.

As capital exits the Indian stock market while Chinese assets are being reassessed, it raises an important question: why has a sanctioned China not only resisted stagnation but has also continued to achieve remarkable successes?

Several factors may shed light on this phenomenon.

In contrast to Modi's reliance on foreign powers, China has committed to a path of independent development for quite some timeIt has heavily invested in talent, resources, and effortsWhile India might seek shortcuts to quickly harvest Western advancements, Chinese firms continue to strive to overcome challenges through original innovation.

In addition to their focus on independent innovation, China boasts a robust industrial infrastructure and formidable manufacturing capabilities, which serve as a solid foundation for high-tech projects such as sixth-generation fighters and DeepSeekMeanwhile, India continues to struggle with efforts aimed at securing foreign companies' supply chains within its borders.

Moreover, Chinese government support for technological advancements, investment in new productivity, and policy backing offers a distinctive advantage over India.

When it comes to talent development and recruitment, Chinese firms are increasingly willing to invest heavily.

Conversely, India suffers from inadequate funding, technological bottlenecks, and lagging infrastructure—all of which hinder its growth prospects.

Interestingly, India and China, as neighbors with similar demographic bases, could certainly learn from each other's developmental experiences

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However, India seems determined to forgo collaboration with its 'close kin' in favor of forming ties with 'distant neighbors.'

In an alarming twist, the U.S. has ramped up its trade sanctions against China, initially imposing a 10% tariff and then later announcing a remarkable 25% tariff on imported steelSuch tariffs pose significant implications for export-oriented economies.

Following suit, Indian Steel Minister announced on February 13 that India would impose a maximum of 25% tariffs on Chinese steel within six months—a move primarily aimed at protecting domestic industriesHowever, if implemented, these tariffs could last for two years, potentially creating a tense atmosphere between India and China.

Furthermore, India imports one-third of its steel from China, and such tariffs could exacerbate the already high inflation rates, placing significant pressure on Indian firms.

The potential repercussions of these tariffs may be considerable, raising questions about whether India is prioritizing the protection of its industries or inadvertently harming themOnly time will tell whether the local enterprises recognize the implications of these tariffs.

Ultimately, if Modi continues to navigate India-China relations in this manner, he may unintentionally set back the fragile détente that had once developedThe more pressing question remains: can Modi truly achieve his objectives amidst the evolving tides of international relations?