How has the recent surpassing of the population of China by India shown the potential changes in the world order? How will this affect the world economy?

India has officially surpassed China as the world’s most populous country, according to demographic prospects from the United Nations Population Fund’s “State of World Population Report.” The report predicts India’s rapidly growing population to reach and surpass China by mid-2023, and recent data indicates that this estimation has come to pass. The Indian population is expected to reach 1.428 billion, outnumbering China’s 1.425 billion by 2.9 million. Due to this fluctuation, India is gaining more potential and is on the verge of acquiring significant influence in the global economic order.
India’s population surge is expected to make the country a more appealing destination for investors and companies around the world. With a larger workforce and an increased focus on innovation, global companies will have access to expand operations at a greater scale.
The country is already witnessing massive improvements across various sectors, notably in its service and manufacturing industries. Rising demand for new residential properties and falling input prices contribute to this progress. This availability of diverse skills and talents – capable of stimulating rapid developments in financial services, industries, technology, and infrastructure – has substantial potential for improvement and reform. This makes India an attractive and tempting bay for investors seeking opportunities with promising returns.
Starting in the early days of the Internet, companies around the world have attempted to outsource services such as software development, customer service, and business processes to India. More recently, with tighter global labor markets and the emergence of distributed work models, there has been renewed momentum around positioning India as the world's back office.
Economists view India as a country with compelling growth potential in the years ahead, especially as China's economy faces decline. Similarities are being drawn between China's development from 2007 to 2012, including investment themes, customer service, and business processes. Investment trends that proved successful in China, particularly in businesses and consumer goods, are now gaining traction in India.
Global perception is shifting, with many investors and economists envisioning India as the worldwide center for investment, gradually overtaking China’s position. This shift expects India’s buoyant economy to replace China’s declining one in the upcoming years.
Ultimately, this leap in investment is expected to set off a positive economic cycle for the country, resulting in job creation, increased income and savings, and more investment. Statistics show that from this cycle, manufacturing’s contribution to India's GDP could rise from the current 15.6% to 21% by 2031, potentially doubling the country's export market share.
Beyond surpassing China as the world's most populous country, India’s abundant human resources may even lead to its surpassing China as the most powerful economy in Asia.