India Faces Aging Population Shift as Birth Rates Fall Below Replacement Level

India will have a much older population later this century as its age structure shifts and fertility drops below the replacement level, according to Moody's Ratings. Population growth has historically supported economic growth and credit strength, but declining fertility is altering this trend. Fewer workers will restrict productive capacity, while fewer households and buyers will reduce demand, forcing nations to depend more on productivity to keep growing. Moody's reported that the global fertility rate fell from 4.9 children per woman in 1950 to about 2.2 today, which is just above the replacement rate of 2.1. Over 70 percent of the global population currently resides in countries where fertility rates sit at or below the replacement level. Fertility rates in Latin America now match those in Europe and Japan, while several East Asian nations report some of the lowest rates ever recorded. Japan currently holds the most top-heavy population structure globally, with nearly 30 percent of its residents aged over 65 and about 11 percent under 15. South Korea and China follow closely behind this trend, while emerging markets including Brazil, India, Thailand, and Türkiye progress along the same path.

Context

Demographic shifts of this scale take decades to unfold but fundamentally change how economies function by altering labor supply and consumer spending. Understanding these trends helps analysts project long-term economic health and plan for future healthcare and pension needs as societies age.