The Demographic Changes Threatening India’s Future

Following China’s example, India seeks to take advantage of its “demographic dividend” and improve its socioeconomic indicators before its population ages. However, significant asymmetries cast doubt on the state’s ability to cope with the gradual aging of society and to sustain the Gross Domestic Product (GDP) growth of recent decades.

How China Leveraged the “Demographic Dividend”

The economic growth of countries such as China was underpinned by the “demographic dividend” (Joe, Dash and Agrawal 2017; Misra 2015; Cai and Wang 2005; Feng and Mason 2005). For this to occur, a country must transition from having a population with high mortality and predominantly young people (Gribble and Brenner 2012) to one in which birth and death rates decline and the economically active population predominates (generally between 18 and 60 years old). At the same time, the population segment over sixty must grow at a relatively moderate pace (Bhagat 2014). This dynamic makes it possible to increase economic growth by allowing the state to adopt the necessary measures to strengthen the productive apparatus before society begins to age as a result of the global rise in life expectancy (UNICEF 2024).

Therefore, the “demographic dividend” is not only a consequence of population changes, but also of the capacity of the state and the market to effectively utilize “extra” workers (ADB 2011; Ghosh 2015). According to some authors (Bhagat 2014; Misra 2015), it is important to stress that this stage is temporary; hence the need for states to take advantage of it to improve their socioeconomic indicators and thus be better prepared to face the multiple challenges generated by declining birth rates. This is a multidimensional phenomenon that threatens to reshape the future of societies and has not yet been reversed despite the various pro-natalist policies implemented over recent decades, both in developed countries and in the “Global South.”

China is often described as an example of a successful “demographic dividend.” While controlling population growth through policies such as the one-child policy, implemented between 1979 and 2015, the Chinese government gradually liberalized its economy, enabling sustained growth and allowing it to capitalize on an expanding labor force. The data behind the “Chinese economic miracle” are well known: according to World Bank statistics, between 1990 and 2020 some 817 million people — equivalent to 65.5% of the world’s poor — were lifted out of poverty (UNICEF 2024).

From 2000 onward, the “demographic dividend” came to an end and a gradual aging process began in Chinese society, which Xi Jinping’s government has been unable to reverse despite implementing policies aimed at boosting the birth rate. Since 1991, the birth rate has remained below the generational replacement level of 2.1 children per woman (United Nations 2024), the minimum level required for a population to replace itself from one generation to the next, provided that mortality rates remain low, migration flows are not significant, and the sex ratio at birth has not been distorted (UNFPA 2025).

This scenario, combined with the increase in the population over sixty — which in 2023 represented 21.1% of China’s population (UNICEF 2023) — has increased pressure on the social security system. It also compelled Xi Jinping’s government in early 2025 to gradually raise the retirement age: from 60 to 63 for men and from 55 to 58 for women (Euronews 2024). Nevertheless, China still has one of the lowest retirement ages among developed economies (Ng 2024).

Can India Benefit from the “Demographic Dividend”?

Following in China’s footsteps, India also seeks to benefit from the “demographic dividend,” given its young population. Sixty-five percent of its inhabitants are currently under 35, and it is expected that within four years one in five working-age people in the world will be Indian.

To capitalize on the “demographic dividend,” the country will first need to create new jobs for the millions of people entering the labor market each year. According to estimates, until 2030 Narendra Modi’s government would need to create 7.85 million jobs annually to absorb the available labor force and “simultaneously address the drastic skill shortages of the workforce and the perverse problem of women’s exclusion from the labor market” (Kumar 2025).

India’s challenge is not only the persistent socioeconomic asymmetries it must resolve if it wants to take advantage of the “demographic dividend,” but also the rapid aging of its population. “The speed and magnitude of aging is a global concern, but in a country like India it is a race against time, as it will have to grow rich before it grows old. The population over sixty, which represents nearly ten percent of the total population, is expected to double by 2050” (Kumar 2025). This population group also displays significant vulnerability, as evidenced by the fact that 40% of Indians over 60 belong to the poorest wealth quintile — that is, the bottom 20% of the population in terms of wealth distribution (Biswas 2024).

By Way of Conclusion

Although the “demographic dividend” may appear to offer a pathway for Global South countries to achieve accelerated economic growth by following China’s example, this model generates a series of imbalances and creates new social problems as a consequence of the sharp decline in birth rates that it itself promotes.

The phenomenon tends to be more evident in regions with better socioeconomic indicators. For example, in India the birth rate in southern states is well below the population replacement level of 2.1 children per woman, while in the less developed northern states birth rates remain higher (Rukmini 2025). Consider the case of Andhra Pradesh, a state with a birth rate of 1.5 children per woman — similar to Sweden’s — but with a per capita GDP 28 times lower. The question is whether regional governments, burdened by rising debt levels and limited financial resources, will be able to face the challenges arising from population aging (Biswas 2024), especially in terms of social security.

Although increasingly frequent forecasts suggest that India may lose its “race against time” by aging before becoming a fully developed country (The Indian Express 2024; The Times of India 2026; Biswas 2024b), decision-makers must not succumb to growing “demographic anxiety” (UNFPA 2025). It is important to note that India is at a less advanced stage of aging than China, since by 2050 the population over sixty will account for just over 20% in India, while in China it will exceed 30% (UNICEF 2024). Although it has more time, Modi’s government must adopt the necessary measures to confront the inexorable demographic shift already underway in some regions of the country — a situation that will bring countless challenges for the social security system, the economy, and society as a whole.