By Greg Peel

The three big "headline" influences in current global financial markets are Europe, China and the US. Will Europe fall apart? Will China come in for a hard landing? Will the US recovery stall again? India is oft included alongside China and as a member of the BRIC quartet, but is rarely mentioned in dispatches.

Indeed from Australia's more localised perspective, India seems to be an ever present addendum in discussions about resource export opportunities and Australia's economic future. It's always China (and India). But while we pour over every piece of periodic data coming out of Beijing as if our lives depended on it, even though we know most of it is totally spurious, hands up anyone who can tell me just what's going on in India right now?

I thought so. Tyler Cowen thinks so too, which is why he opened his weekend New York Times piece with this observation:

"The economic slowdown in India is one of the world's biggest economic stories, but it is commanding only a modicum of attention in the United States."

We know that China's GDP growth has been slowing, on a combination of Beijing's policy tightening and lower export demand from Europe. Cowen suggests the economies of both China and Russia have been slowing, but "to an unknown extent and duration". I can't speak for Russia but presumably Cowen is not trusting of data out of Beijing, otherwise he would suggest that after the March quarter China's GDP was growing at an annualised rate of 8.1% to mark its slowest rate since the GFC. Beijing's new target growth rate is nevertheless 7%.

Cowen does trust that Brazil saw only 2.7% growth in 2011, down from 7.5% in 2010.

The IMF estimates that India's economy will grow by 6.9% in 2012. That's strong growth by anyone's standards, but the figure has been revised down from an earlier 8%. And the December 2011 quarter produced only 6.1% growth.

It should be noted at this point that large, rapidly growing populations in countries undergoing "industrialisation and urbanisation" require a greater level of GDP growth than, say, Australia, in which a mature economy is comfortable with relatively "full" employment. An economy must first grow sufficiently to "beat" population growth and provide enough jobs for those reaching working age. In Australia we are currently trying to bring in skilled migrants and our workforce will shortly be retiring faster than it's being replaced, if that hasn't started already. A "recession" in Australia largely means negative growth.

In China and India however, a strong positive GDP growth number is required just to get over the working population growth hurdle. And in these countries in particular, not only do youths provide "new" workers but so too do adults who were previously subsistence farmers but have now migrated to the cities for a new chance in life. On this basis it has been suggested that while Australia's line between recession and growth might be a flat GDP, China's line is more like plus 6%. You could thus say China's March quarter result showed only 2.1% growth. And assuming India's situation is roughly equivalent, India's December quarter growth would be 0.1%.

What is disturbing to Cowen is that the slowdown in India's growth rate is unevenly distributed, such that the greater burden is falling on the already poor. If the slow rate continues or declines further, another generation of Indians is unlikely to rise above poverty. "The problems of the eurozone," suggests Cowen, "are a pittance by comparison".

It is suggested that China's population is likely to peak relatively soon while India's will continue to grow, which implies that by next century India's will be the world's largest economy. It is also suggested a strong Indian economy potentially energizes the neighbouring economies of Bangladesh and Nepal and, maybe even one day, Pakistan and Burma. A wealthy India would provide an impetus for regional democracy.