India could benefit more than China from the next phase of globalization. That's according to Arvind Subramanian, a senior fellow at Brown University's Watson Institute for International and Public Affairs.

But that may not be enough to replace China.

David Dollar, a senior fellow at the Brookings Institute, has argued that globalization is shifting in favor of India, not China.

"China has been doing so well for such a long time that it's kind of closer to the frontier than India," Dollar said.

"Let's say China is roughly about one-third the per capita GDP of the U.S. India is kind of probably, you know, 11 or 12% of that. So it's just the fact that China has done so much better for so much longer by definition means that it's going to slow down because, you know, as you get closer to the frontier, your wages rise, capital is not as productive, and unless you make certain shifts, there's a natural tendency for the economy to not stop converging, but certainly to converge at a slower rate."

Simply put, India has plenty of slack resources, and therefore, it can grow its economy by deploying these resources efficiently rather than by developing new technologies.

But Udayan Roy, an economics professor at Long Island University, doesn't subscribe to this thesis.

"We have heard this thesis before many times," Roy said. "India's market inefficiencies are very deep in the commodities and resource markets, and I don't see any improvement in the near future. For instance, take the labor market, where companies with more than ten people cannot lay off workers. That's a disincentive for companies growing bigger and achieving economies of scale."

In addition, there are cozy relations between government and big businesses (crony capitalism) in several sectors of the economy like utilities, telecom, transportation, energy, and banking, limiting competition and wasting resources.

"For instance, banks allocate resources to businesses according to political rather than economic criteria," said Roy.

Dr. Guo Yu, lead analyst for Asia-Pacific at Sibylline, takes a middle approach, seeing both countries playing a vital role in the next stage of globalization.

"As major economies, both China and India are important clogs in the globalization of commerce and supply chains," he said. "And both economies have reaped significant benefits from globalization. India and China are at different stages in their development, therefore it is not conducive (or helpful) to consider the notion of one replacing the other."

Still, Dr. Yu sees India capitalizing on its young labor force and democratic institutions while China faces an increasingly hostile geopolitical environment.

"India enjoys increasing advantages in mass, labor-intensive manufacturing with its large young population, and its democratic political system often makes it a preferred partner with many Western economies," Yu said. "In contrast, Beijing has been facing a challenging, if not hostile, geopolitical climate in the past few years, underpinned by the intensifying strategic rivalry between China and the US. Many Western governments have taken a hardline stance on China and tighter scrutiny on Chinese trade and investment."

But that doesn't mean that India will be the winner of the next phase of globalization.

"China's insistence on upholding the zero-Covid strategy has caused significant disruption to business operations and supply chains and is seen as the antithesis of globalization," Dr. Yu said. "While India may be able to take some advantages from lost production in China, it does not have the capacity to replace China. Indeed, China's relatively well-developed infrastructure, highly skilled workforce and vast market with a rapidly expanding middle class continue to make it an attractive economy for international businesses, despite political and geopolitical challenges. "

Meanwhile, Dr. Yu sees the two countries playing a leading role in the next phase of globalization, at least in the Asian region.

"It is no surprise then to see new trade agreements such as RCEP and CPTPP to foster further regional economic integration," he said. "In addition to manufacturing and trade, the digital economy will also help shape future globalization."

All of this may hinge on whether globalization survives the consequences of the Russia-Ukraine war.