When Indians talk about China, many fall back on what is essentially a tortoise-and-hare rendering of their relative performance. The story goes something like this: "Sure, China has its 30-year record of double-digit growth, its gleaming skyscrapers and its eight-lane superhighways. But India has the 'soft architecture', the democracy, the rule of law and the freedom of speech that provide shock absorbers and make its economic prospects more enduring." The implication is that, while authoritarian China may have raced out of the traps, sooner or later it will falter. India, playing the long game, will keep up a measured pace and one day surpass it.

If India is indeed the tortoise, its performance is all too convincing. In 1991, the year Indian reforms got going, its per capita income was roughly the same as China's. Today, China's is more than three times higher. It is not that India has been terribly slow. Indeed, in the 1990s, it finally sloughed off its lacklustre "Hindu rate" of growth and began to expand at a halfway decent clip of 5.5 per cent a year. From 2000, that notched up higher still - to about 7.5 per cent. The only problem - when it comes to comparisons - is that China has done even better, expanding at 10 per cent a year over the same period. By the magic of compound growth, it has streaked ahead.

One does not need to accept the tortoise-and-hare analogy to believe that India, too, has a reasonable shot at double-digit growth. This year, it is expected to grow at about 8.5 per cent. Even Manmohan Singh, the quietly spoken prime minister who - as finance minister in the early 1990s - helped dismantle some of the obstacles to rapid expansion, has said 10 per cent growth is a reasonable medium-term proposition. Last week, K.M. Chandrasekhar, the government's cabinet secretary, became the latest official to conjure up the double-digit genie, saying it would become reality if only the farming sector could be prodded into a modest 4 per cent growth.

Morgan Stanley's Stephen Roach, who has just returned to New York after three years in Asia, has long stressed India's potential. For years, he says, it has had a "better micro story" than China, with its world-class companies and entrepreneurs, its large English-speaking and IT-competent workforce, and its prudently regulated banking system.

David Fuller's view India's government almost certainly knows what it needs to do in terms of reforms which can speed up development and offer economic opportunities to a far larger proportion of its huge population. However it is not a command economy, for better or worse at this stage of its development, and the challenges of steering what is by far the world's largest democracy are daunting.

I commend the rest of David Pilling's article to subscribers because it covers most of the reasons why I remain happy for India to be the largest investment in my personal long-term investment portfolio. However, India is holding for those of us who like investments where the glass really can be accurately described as only half full.

If global stock markets saw a major low in early July, implying that the current rally is more than just another short-term bounce within the Nifty's gently rising trading range, then I think India could test its 2008 peak in 4Q 2010 - 1Q 2011. A positive indication of this potential would be a consolidation of recent gains which retains at least half of this month's rally, following by renewed strength. Meanwhile, the performance of India's Bombay Banks Index remain encouraging.