This year, India is expected to become the world's most populous country. According to the UN, the best estimate is that this demographic shift will occur on 14 April 2023, with India’s population expected to reach 1,425,775,850 the following day. This is a historic global demographic shift, since China has had the largest population since the UN started keeping records of nations’ populations in 1950.
The immediate tipping point for this change has been China’s population stagnating at about 1.43 billion since 2021 while India’s population has kept increasing. However, the demographic trends leading to this shift have been playing out for many decades.
One of the key demographic drivers of this change is India's fertility rate remaining higher than China’s, particularly since the 1970s.
In India, the fertility rate - which is the average number of children born to a woman over her lifetime - has been in continuous decline since 1965. However, this decline has been at a much slower rate than in China (see Chart 1).
Currently, India’s fertility rate is 2.0. This is just below the ‘replacement rate’ of 2.1 and means the next generation will have fewer people than the previous. However, there are differences in this rate when looking at different segments of the population. According to the Indian Government’s latest National Family Health Survey (2019-21), women in urban areas are having 1.6 children, the same rate as in Australia and the OECD average, while the fertility rate for women in rural areas is considerably higher.
Chart 1: Fertility rate of China and India (1960 – 2020)
Source: United Nations, Department of Economic and Social Affairs, Population Division (2022). World Population Prospects: The 2022 Revision.
The decline in China’s fertility rate between 1970 and 2000 was so rapid that some researchers have called it ‘one of the most significant events in world demographic history’. China’s former one child policy is a major factor behind this decline, along with socioeconomic development, and shifts in family structure norms.
In contrast to India, China’s fertility rate is currently 1.08, based on data from the country’s National Bureau of Statistics, which sits significantly below the replacement rate. Last year, the country recorded its first population decline in six decades, reflecting the rapid decline in the number of babies being born in China over many decades.
As a result, the shift of title from China to India has been reflected in migration and demographic changes in Australia, particularly over the last decade. Due to strong migration, the number of Australians who were born in India increased 56% between the 2016 and 2021 census. India is now the third largest country of birth for Australian residents, overtaking New Zealand and China since the 2016 Census, while Australia and England remain the top two countries of birth for Australians. The Indian diaspora (which refers to the movement of people away from one nation or group to another) is also the fastest growing large diaspora in Australia (DFAT, 2022). India had the largest number of student visa applications to Australia last year, shown in Department of Home Affairs data.
Migration from India to Australia is expected to remain strong for a couple of reasons. The first is that India’s population is relatively young compared to other developed economies. India has a median age of 28, compared to 37 in Australia and 38 in China and the United States. The country has what is referred to as a ‘youth bulge’, with 43% of Indians under the age of 25 currently. The country will therefore house a growing proportion of the world’s working population (aged 15-64 years) over the next few decades.
The second factor is the close ties between India and Australia. This was seen in Prime Minister Albanese’s recent trip to India, which focused on national security, the economy and cultural ties. India’s latest milestone might further encourage the connection between the two countries.
This blog was co-authored by Sara Agostino, a Senior Analyst in the Deloitte Access Economics team.