India Positioned as Beneficiary in U.S.-China Trade War: Analyst Gary Shilling Cites Demographics and Governance

Market analyst Gary Shilling identifies India as a potential beneficiary of the U.S.-China trade war, citing its demographic strength, democratic governance, and English proficiency. In a CNBC interview, Shilling highlighted India's growing population, surpassing China, as a key advantage. India's democratic system and English language use attract foreign investors, while its digital growth and strategic positioning amid global trade shifts enhance its appeal. Companies like Apple are expanding in India, diversifying supply chains. The U.S. is increasingly engaging with India, viewing it as a viable alternative to China for manufacturing and trade partnerships.

India’s Demographic Dividend: A Workforce on the Rise

India has officially surpassed China as the world’s most populous country, with over 1.44 billion people, according to the United Nations Population Fund. This demographic milestone is more than symbolic—it represents a vast and growing labor force that could power India’s economic ascent in the coming decades.

Shilling emphasized the contrast between India’s population trajectory and China’s. While China faces a declining population and shrinking workforce due to decades of one-child policy and an aging society, India’s youthful population offers a long-term advantage. “India’s population is booming,” Shilling noted, “and that means a growing workforce and consumer base.”

This demographic edge is already influencing global corporate strategies. Companies like Apple are expanding production in India, seeking to diversify supply chains away from China. The country’s large, young, and increasingly urbanized population is also fueling domestic consumption, which is projected to drive nearly 60% of India’s GDP growth by 2030.

A Democratic Framework with Global Appeal

India’s political system also plays a significant role in its appeal to investors and global partners. As the world’s largest democracy, India has maintained a parliamentary system inspired by the British Westminster model since its first general elections in 1951–52. The country adopted universal adult suffrage from the outset, granting equal voting rights to all citizens.

Shilling pointed out that India’s democratic structure provides a level of political stability and transparency that is attractive to foreign investors. “India is a democracy that inherited its legal system from the British,” he said, highlighting the institutional familiarity that can ease business operations for Western companies.

While recent years have seen concerns about democratic backsliding, India remains a key partner for countries seeking to strengthen ties with like-minded governments. The U.S., in particular, has increasingly engaged with India as part of its Indo-Pacific strategy, aiming to counterbalance China’s influence in the region.

English Proficiency: A Strategic Communication Advantage

Another factor that sets India apart is its widespread use of the English language. As a legacy of British colonial rule, English is one of India’s official languages and is commonly used in business, education, and government.

Shilling described this as “pretty handy in today’s world,” especially for multinational corporations looking to establish operations in a country where communication barriers are minimal. India’s English-speaking population has already made it a global hub for information technology and business process outsourcing, earning it the moniker of the world’s “call center” in the early 2000s.

This linguistic advantage continues to support India’s integration into global markets, particularly in sectors like software development, customer service, and digital services.

Economic Transformation and Digital Growth

India’s economic evolution has been marked by significant structural changes since its independence in 1947. The 1991 economic reforms—centered on liberalization, privatization, and globalization—catalyzed a period of rapid growth. Since then, India has emerged as one of the world’s fastest-growing major economies.

The government’s push for digital transformation through initiatives like Digital India has further accelerated this momentum. With over 1.1 billion smartphone users and 840 million internet users, India is building a digitally native consumer ecosystem. E-commerce is projected to grow more than fivefold to $224 billion by 2030, with the direct-to-consumer segment alone expected to reach $119 billion.

This digital infrastructure not only supports domestic consumption but also enhances India’s attractiveness as a destination for foreign investment in technology and services.

Strategic Repositioning Amid Global Trade Shifts

The U.S.-China trade war has prompted a strategic recalibration among global businesses and policymakers. As tariffs and geopolitical tensions disrupt traditional supply chains, India is increasingly seen as a viable alternative to China for manufacturing and trade partnerships.

Washington’s growing engagement with New Delhi reflects this shift. India’s measured response to U.S. tariffs—unlike China’s retaliatory stance—has contributed to positive negotiations on a bilateral trade agreement. This diplomatic pragmatism, combined with India’s democratic credentials, makes it a preferred partner in the eyes of many Western governments.

Shilling’s investment outlook aligns with this broader trend. “As economies grow, more money proportionally is spent on services and less on goods,” he said, noting that India’s expanding middle class and service-oriented economy are well-positioned to benefit from global economic realignments.

References

• In U.S.-China trade war, India could be a winner: Market analyst Gary Shilling
• Democracy in India - Wikipedia
• "India's Path to Economic Power: The $5 Trillion Vision for 2025"
• India’s $7.3 trillion future: How aspirations are fueling a premium spending boom - ET Retail
• JD Vance didn’t just visit India — he sent Beijing a message
• Trump tariffs live updates: Trump says trade deals are coming, but he's not planning to speak with Xi
• Current indicators show India’s economy is doing well: CEA Nageswaran