China’s and India’s mirror development cases: Zooming into India’s way forward to address its job crisis

Despite strong GDP growth and a favourable demographic profile, India faces an impending jobs crisis. A large share of the workforce remains stuck in low-productivity agriculture, while many new entrants are absorbed into a persistently large informal sector. By contrast, China’s rapid ascent was driven by manufacturing-led, export-oriented industrialisation, underpinned by large inflows of foreign direct investment and sustained technology transfer. India’s manufacturing base, however, remains modest, and the bulk of well-paid formal employment continues to be generated by high-skill services.This paper contrasts the development trajectories of the two economies and identifies several underutilised growth levers in India: manufacturing, goods exports, manufacturing-oriented FDI, and innovation. Each of these remains underdeveloped, yet together they offer a pathway to more labour-absorbing and durable growth. Leveraging them effectively would be central to achieving India’s “Viksit Bharat 2047” ambition of attaining high-income status.The scale of India’s employment challenge implies that job creation must become an explicit policy priority. This calls for greater trade openness, particularly with Asia, to integrate India into Asia-centric global supply chains. Labour market reform is equally critical, making the effective implementation of the new labour codes essential. Strengthening innovation ecosystems and realigning education and skills policies to support industrialisation are also key. Absent these structural shifts, India’s current pattern of jobless growth risks transforming its demographic dividend into a long-term liability.