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I agree with 2. India would seem to have had the better chance -- ironically because of its associations with the British Empire. Continued connections with the Commonwealth (as the Empire became) would have given India much greater chances for trade, international influence, etc. Unfortunately, China adopted a system (communism) that has never really worked anywhere and that catastrophic consequences for China in particular.
I would have to go with India. In the 1920s, India seemed much better off. It was being ruled by Great Britain, which was very strong economically and which was helping upper class Indians to become educated in British ways. This would have seemed like a country that would be able to prosper when independent. China, by contrast, was dominated by multiple foreign countries and was torn by internal strife. It had no country to be its "mentor" and lead it toward prosperity and political stability.
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