China has had a capitalist economy for a decade or two, but India has had a capitalist economy since 1947.....

There are a few reasons: 1. China has much more control over the population than India. This enables the government to institute universal economic policy. 2. India is much more politically unstable than India. The country has much sharper ethnic and cultural divides than China, and the Indian government has not shown that it can rise above corruption and do what is best for the country as a whole. 3. China, as a result of this stability and its large population, has been able to attract a lot more foreign investment. India has done a good job of attracting service jobs, but manufacturing is the real key in gaining new technologies for an emerging economy.

Your question makes an incorrect assumption -- India's major push toward liberalization began around the same time as China's, and is still continuing today. China has somewhat higher per-capita GDP, but their growth rates are comparable (10% per China, 8.4% for India). I don't think the economic differences are as extreme as you are implying.

China directs economic policy from the top, and thier no dissent of offical policy in china unless you like slave prison camps for a job. India may be curropt, and bureaucratic but the politcal system will evolve to deal with them better than China. Culutre plays a big part having the british in India for a hunderd plus years as master makes likely the legal systems, and banking, services will in the long run be better than China. Still, China will outproduce goods, but India will be the place for technical, legal, knowhow for China someday. India will grow the economy no matter how curropt the leaders are because cronies know a small elite makes it hard keep tensions at bay. India will be the place of more intreaction with the west than China ever will. India will hold some to account better than China ever will.

KevinStud is correct. India's bureaucracy was a hamper on economic development. It took years to leagally start a business, get utilities, etc., all because of the various permits and approvals you had to get.