India’s firms get far less government backing than Chinese peers, OECD says
- Nishadil
- June 08, 2026
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OECD report finds Indian companies receive about one‑third the state support China gave its firms between 2005‑2024
A new OECD study shows that Indian firms got roughly 1 % of GDP in state aid, while Chinese companies enjoyed about 2.5 % – a gap that may shape future policy debates.
When the OECD crunched the numbers on state aid to businesses from 2005 to 2024, the contrast between India and China was hard to miss. Indian firms, on average, received assistance worth just around 1 % of the country’s gross domestic product, whereas their Chinese counterparts were buoyed by support totalling close to 2.5 % of GDP.
That’s not a typo. The gap is almost three‑fold, and it shows up in the form of subsidies, cheap loans, tax holidays and other fiscal perks that China handed out more generously. In plain English, Chinese companies had a bigger safety net.
India’s numbers aren’t terrible by global standards – the OECD notes that many emerging economies lag even further behind – but the shortfall relative to China is striking, especially given the two nations’ competing ambitions on the world stage.
Analysts say the data could fuel fresh calls for reform in New Delhi. More targeted credit lines, clearer tax incentives and a smoother regulatory environment might help close the gap, they argue. The report also flags that, despite the lower aid, India’s private‑sector growth has been relatively robust, hinting that other factors – like a younger workforce and a growing consumer base – are at play.
In short, the numbers paint a picture of two different playbooks. China leaned heavily on state‑driven support, while India has taken a lighter touch. Whether that will change in the coming years remains to be seen, but the OECD’s findings have certainly given policymakers something to chew on.
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