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India is expected to surpass China as the world’s most populous nation in 2023. Both countries have more than 1.4 billion people, but where India’s population is relatively young, compared to the rest of the world, China’s birth rate is in decline and its population is getting older.
What does this mean for India?
By 2047, 1 in 5 people working in the world will be from India, according to India’s Century, a report charting a roadmap for India’s future, by McKinsey & Company and the Federation of Indian Chambers of Commerce & Industry.
Alok Khirsagar, India’s Century co-author, highlights the importance of leveraging on India’s digital infrastructure to generate jobs for India’s young population.
“It’s very important that we’re able to use technology to distribute manufacturing services into smaller towns and smaller cities, and not as dependent on the large cities to drive growth,” he said to CNBC.
He predicts that agriculture, education, logistics, transport, food and small consumer goods are industries that India will provide services for on a global scale.
How will India’s economy benefit?
Manufacturing remains a key industry for India, with companies looking to diversify production away from China due to worker disruptions in Chinese supply chains.
The supply chains of global brands such as Samsung, Apple, Oppo, Vivo, Xiaomi and Lenovo are also moving to India, Antara Ghosal Singh, an analyst from Indian think tank Observer Research Foundation told CNBC.
“Manufacturing, as a whole, is going to see a boost from the policies that have been taken by the government,” she said.
According to the country’s commerce and industry minister, Piyush Gopal, Apple hopes to manufacture 25% of all its iPhones in India, up from around 5% currently.
As of 2022, the country has inked 13 regional free trade agreements, which will ensure greater market access for its domestic goods while promoting exports.
