India more capital efficient than China: Nath

India, often compared with China in terms of attracting FDI or exporting goods, may have lagged behind on both counts but is more "capital efficient" as is evident from the narrow gap between the economic growth rates of the two countries, Commerce Minister Kamal Nath feels.

"We often compare India with China... It (China) gets 10 times more FDI, has four-six times more exports (than India). But look at the GDP growth rate, its only 1.5% more than that of India," he said here today.

"This means capital efficiency in India is higher. I am not saying its the highest, but India has a reasonably higher capital efficiency," Nath said at the launch of the India operations of private equity fund Apax Partners.

While India received foreign direct investment of about $6.5 billion in 2005, China attracted about $72.4 billion, according to UNCTAD figures.

Similarly, India exported goods worth $95 billion last year, but China was far ahead with more than $760 billion in 2005, as per WTO trade statistics.

The two countries are among the world's fastest growing economies, with China's GDP increasing 9-10% and India registering a growth of 7-8% in the last 3-4 years.

Nath also said India's economic engagement (in terms of trade in goods and services as well as investments) with the world would increase to more than $500 billion in two years from about $400 billion now.

"As India signs new trade agreements, we must gear up to face competition from emerging economies such as Thailand and Vietnam and become globally competitive," he said, adding besides regional trade pacts, India was also committed to a rule-based multilateral agreement under the WTO.