fast the indian financial system allocates capital better than the chinese financial system this gives india an edge in translating the flow of investment into increased gdp third indias exports are grounded on the true competitive advantages of operating in indiahowever the study also shines a light on three critical challenges that india faces which it describes as a the increased tendency towards government micromanaging the economy b the expanding administrative state and c a growing erosion of the rule of lawthousands of global firms the authors observe are presently in the process of reviewing the extent of their exposure to china this has created an opportunity for greater fdi into india the barriers that inhibit fdi into india consist of capital controls taxation regulation and rule of law fundamental reforms to these areas based on root cause analysis will simultaneously help the domestic economy and influence the decisions of global firmsthe report flags a growing dimension of the indiachina relationship cyber crime led by state actors china is one of the countries which have created cybercrime and cyber warfare capabilities which are termed advanced persistent threats in the field of computer securitythis creates danger of attacks by state actors upon systems in india government or private as vehicles for inflicting harm upon india second there are linkages between this problem and the greatest indian export software and processing servicesultimately the study recommends that india should adopt a progressive less china approach by taking adequate security precautions and yet staying away from myopic jingoism and realising that china is a major source of new technologies which will be necessary inputs to our growth in the short term