India emerged as the world's fastest growing major economy, with March quarter GDP growing at fastest pace in five years.

Highlights China is world's second largest economy, with GDP of $10 trillion

In comparison, India is a $2 trillion economy

India has to boost its investment rate, HSBC report said

Today, China is the world's second largest economy, with a GDP of over $10 trillion, five times bigger than India's $2 trillion economy.

China's staggering growth - an average of 10 per cent between 2002 and 2012 according to World Bank - not only helped raise living standards in the country, but also paved the way for the emergence of China as an engine of global growth.

It is not therefore surprising that the current slowdown in China has unnerved global investors. In the first quarter, China's GDP grew 6.7 per cent, the slowest in seven years.

India, in contrast, has quietly emerged as the world's fastest growing major economy, with GDP growing at fastest pace in five years at 7.9 per cent in the March quarter.

The pick-up in economic growth in India has led investors to ask whether the country can replace China as the main engine of global growth.

"India is the obvious candidate. After all, it's the only other country with over a billion people and its economy, according to official data, has increased a tad faster than China's of late," says a report by HSBC.

According to the report, India's economy isn't currently large enough to make up for a slowdown in China, but if growth picks up, India will account for the same share of world GDP by the middle of the next decade as China did in 2005.

2005 was an important landmark in China's economic growth because it was then that the country really started to make itself felt globally, HSBC said. China's economy tripled over the subsequent 10 years, the report noted.

"If India continues to grow at around 7 per cent, it would have the same global punch as China about a decade ago only in 2029," HSBC said. If India's growth rate picks up to double digits, it can achieve China's 2005 status by 2023, it added.

So what are the chances of India achieving this feat? HSBC said it will be "tough" for India to match China's boom-time growth rates. However, it added that India can come close to China if it manages to boost investments.

"China's investment rate has always been higher than India's (although by a relatively narrow margin in the late 2000s). To achieve China's growth rate of the last decade, India would have to boost its investment rate by 10 percentage points or so of GDP," HSBC said, adding that it is not impossible.

When it came to economic development, India and China were similarly placed for much of the 20th century. But economic reforms initiated under Deng Xiaoping in 1978 helped China take a substantial lead over India.