India needs reform to make taking China’s title as most populous nation count

Demography is not necessarily destiny, and Indian policymakers must find a way to turn this new-found status into a boon for the people
To secure significant dividends, they need to enhance political governance, boost social spending and infrastructure and bolster regulatory regimes

Andrew Hammond

Published: 3:30am, 27 Apr 2023

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Recent world media headlines have been dominated by US President Joe Biden’s re-election campaign announcement plus Russia’s ongoing invasion of Ukraine. However, underneath the global radar is another key development in Asia which could shift the tectonic plates of world economics and politics.

As soon as this week, India is forecast to become the most populous nation in the world – a potentially big moment in human history as it takes over from China. The nation that has long been the world’s largest democracy becomes the world’s largest country of any political stripe, a position it could hold for centuries to come.

According to the United Nations, India’s population is expected to reach 1,425,775,850 people by the end of April. Moreover, the UN forecasts India will have about 2.9 million more people than China by the middle of 2023.

What this underlines is that, while China and India have accounted for more than a third of the global population for many years, there are key differences between their population trends. China’s birth rate has plunged recently, with its population shrinking last year for the first time since 1961, and could drop below 1 billion before the end of the century.

Meanwhile, India’s higher fertility rate means its population is forecast to continue growing for several decades and potentially peak around 1.7 billion in the second half of the century. India’s population aged 15 to 24 is the largest in the world, at more than 250 million people, and more than two-thirds of all Indians are between the ages of 15 and 59, so the country’s ratio of children and retirees to working-age adults is low.

A woman holds on her lap her grandchild at a hospital in Dehra, in Kangra district of Himachal Pradesh, on April 24. More than two-thirds of all Indians are between the ages of 15 and 59, so the country’s ratio of children and retirees to working-age adults is low. Photo: AFP

A key question for Indian policymakers is whether and how they will seek to leverage this new global population stature amid talk of a “Indian century”. The milestone comes at a time when New Delhi is trying to promote itself as a rising international player as the host of this year’s Group of 20 summit.

Demography is not necessarily destiny; it is by no means assured India will become the next global superpower. Its economy is growing, but it has not yet delivered the kind of huge export-driven manufacturing growth that made China into a global economic dynamo.

What will it take for India to copy China’s demographic dividend?

Specifically, the success of the nation in delivering a dividend from its population growth will depend on whether it can overcome the challenges that have constrained growth in recent decades. This includes scarcity of infrastructure, suboptimal political governance, insufficient social spending and subpar regulation in areas including the labour market.

Globally, India is one of just nine countries forecast to provide more than half the world’s population growth through 2050. This underlines how geographically unbalanced the next phase of demographic change will be as the overall world population grows from some 8 billion today to a peak of about 10.4 billion in the second half of this century.

Despite the growth spurt, however, the rate of population increase is slowing. This is true even in India, where the fertility rate has decreased from six births per woman in the early 1960s to about two births today.

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These world population dynamics are also driving another mega trend: urbanisation. Take the example of India, which is experiencing one of the largest rural-to-urban migrations in human history.

This is part of a bigger global story. Just 7 per cent of the world lived in cities in 1800, rising to more than 50 per cent in 2008. That rate is projected to hit 68 per cent by 2050.

Paralleling this trend is the rise of megacities – those with 10 million or more inhabitants. There were 26 such cities in 2008, but by 2025 Asia alone is expected to have at least 30 megacities, including Mumbai, Shanghai and New Delhi.

Despite the general economic success of megacities, governments are preparing for the growing risks these massive urban centres pose. Key questions include whether it is possible to keep meeting everyday needs of food, water and health while also dealing with the growing vulnerability to environmental stresses exacerbated by climate change.

While many in India might welcome the title of the world’s most populous nation, this will bring many challenges as well as opportunities. To secure significant dividends, policymakers need to enhance political governance, boost social spending and infrastructure and bolster regulatory regimes.

Andrew Hammond is an associate at LSE IDEAS at the London School of Economics