New Delhi: The latest Economy Watch report from Ernst & Young Global Limited could hardly be clearer in its messaging: the world’s largest economies are greying fast, and India’s youth may prove to be its biggest differentiator in the decades ahead.
India’s young edge in an ageing world
Take the numbers. In 2025, India’s median age is just 28.8 years. Compare that to the United States at 38.5, China at 40.1, Germany at 45.5, and Japan at a striking 49.8. The story these figures tell is simple: India remains young while its competitors are rapidly ageing. By 2060, Japan’s median age will cross 53 years. Even China, once the poster child of the demographic dividend, will edge close to 55 years. India, by contrast, will still be relatively youthful at 41.3 years.
What does this mean in real terms? A younger population means more people of working age, a bigger base of consumers, and a labour force that can power manufacturing, services, and innovation. Ageing societies face the reverse—shrinking workforces, ballooning pension bills, and healthcare systems under pressure. This widening demographic gap could become one of the defining forces of the global economy over the next three decades.
The vulnerabilities haunting global giants
The Economy Watch is blunt in its framing: two key vulnerabilities haunt major economies—ageing populations and government debt. India is in a sweet spot on both counts. While Japan’s public debt is an eye-watering 236.7 per cent of GDP, and the US and China are weighed down at 120.8 per cent and 88.3 per cent respectively, India is heading in the opposite direction. Its debt ratio, at 81.3 per cent in 2024, is projected to fall to 75.8 per cent by 2030. Germany, the other low-debt economy in this group, does not have the advantage of youth.
India’s youth: blessing, or wasted chance?
For India, the implications are profound. The so-called demographic dividend is not automatic. A large, young population can be a strength only if it is healthy, skilled, and productively employed. If mismanaged, it could just as easily turn into a liability of joblessness and frustration. That is why policy choices today—on education, healthcare, infrastructure, and labour reforms—carry disproportionate weight. The window is open, but not forever.
Meanwhile, ageing economies will have to reckon with structural stagnation. Japan has been grappling with it for years. Europe is heading down the same path, with labour shortages already evident in Germany. Even the US, cushioned by immigration, is ageing steadily. China, which once loomed large as the workshop of the world, is facing a sharp demographic squeeze far earlier than expected.
The age gap that will shape the global economy
India’s challenge is to ensure that this advantage is not wasted in political churn or piecemeal reform. A young population can generate growth, but only if the economy provides opportunities to absorb its energies. If handled right, India could become the rare major economy where the momentum of demographics converges with structural reform, making it not just the fastest-growing large economy but also the most resilient.
In an ageing world, youth is a currency. India must spend it wisely.