A "huge shortage" of teachers and quality institutions means China may now have more people who speak English than India, says the study by the British Council, Britain's international cultural relations body.
The study estimates less than five per cent of the Indian population speaks English, which would mean that only about 55 million people in India will be fluent English speakers by 2010.
In comparison China adds 20 million English speakers each year as a result of new education policies that require English to be a compulsory subject in primary schools. According to an earlier British Council study, China had 200 million English users in 1995.
India's emergence as a major software and IT hub has in part been possible due to its English-educated workers, but the study says English is a "casualty of wider problems in Indian education".
"The rate of improvement in the English language skills of the Indian population is at present too slow to prevent India from falling behind other countries which have implemented the teaching of English in primary schools sooner, and more successfully,” says the study, English Next India, written by British author David Gradoll.
"China may already have more people who speak English than India," it said, adding India will need many more people speaking English to sustain its economic growth, according to the BBC.
“Poor English is one of the causes" of Indian universities falling far short of rival countries in the quality of teaching and research.
The study says a range of approaches is required to improve English proficiency in India, and no single method will help.