India’s Spatial Development

Should developing countries focus on the development of urban infrastructure and in general facilitate the location of employment in its large cities to exploit the still important agglomeration economies? Or should they develop infrastructure in medium-density locations to remove some of the growth impediments present in these areas? This note examines the recent spatial development of India.1 Services, and to a lesser extent manufacturing, are increasingly concentrating in high-density clusters. This stands in contrast with the United States, where in the last decades services have tended to grow fastest in medium-density locations, such as Silicon Valley. India’s experience is not common to all fast-growing developing economies. The spatial growth pattern of China looks more similar to that of the United States than to that of India. What is preventing India's medium-density cities from growing and taking full advantage of agglomeration forces? Future research should focus on identifying the barriers to growth in medium-density places.