Demographic Edge: India’s working age population to exceed China’s by 2030

Economists at S&P Global Market Intelligence wrote that female labour participation will be crucial. (Photo by Andrea Piacquadio/Pexels)

India’s working-age population will exceed China’s over the next five years, going by various estimates. This will prove to be a significant competitive advantage in attracting global manufacturers.

The working-age population of India has been rising steadily since 1990 while that of China has been falling since 2010.

As Morgan Stanley’s analysts note about the working-age population in India and China, “India is seeing a favourable demographic trend while China has seen a decline in working-age population since the early part of the last decade”. As their graphic illustrates, the number of people in their working age in India is expected to cross the number in China in 2024.

Some analysts believe that India’s working-age population will exceed China’s number a little later, closer to 2030.

Given this trend and looking at various parameters, including GDP per capita income and debt/GDP ratio, analysts at Morgan Stanley wrote, “India's future looks to a significant extent like China's past.”

While the size of India’s workforce is a “major competitive advantage", according to S&P Global Market Intelligence’s economists, they wrote that the ability to harness this advantage will depend on upskilling the workforce and in boosting female employment.

“Labor dynamics will be pivotal in achieving India’s domestic growth targets and its global ambitions,” wrote S&P Global’s Sophie Malin, Senior Economist, and Ashima Tyagi, Economics Associate Director.

“A key impediment to overcome will be public perception that upskilling is a last resort for those who have opted out of the formal academic system… Consolidating and streamlining upskilling schemes may also improve their effectiveness. MSDE (Ministry of Skill Development and Entrepreneurship) has a challenging task in coordinating skill-development programmes spread across multiple ministries and associated departments within the central and state governments,” they added.

They also noted that increasing female labour participation will partly depend on improving the perception of women’s role in society. They wrote, “This will reduce barriers for women entering the workforce and diminish gender discrimination more broadly.”