Of course demographics have an impact because it reduces the amount of youngster that may eventually choose to pursuit a football career but that can't be a reason (or excuse) to open the border to more immigrants. Otherwise how come small countries with very little immigration like Croatia and Uruguay are so good and they only have a few million citizens?
Let me share my perspective about this matter, where football is considered as best sport and gives the opportunity to make money for a player then where more people will be interested in doing it. You said why India and China can't able to find 11 good players is because in India cricket is where money rains so every youngster from their childhood dream of becoming a cricketer than a football or javelin throw player but ofcourse India is also now focusing on improving their football participation by replicating something called ISL after the success of IPL (for cricket).
India has been investing a lot of money in cricket for a long time, but they do not invest that much money in football, which is why every generation of Indians dreams of becoming a cricketer when they grow up. I think if 10 young people in India are asked about their future plans, then maybe eight out of these ten will say that they want to be cricketers, and out of these 10, maybe not even one will say that they want to be a footballer. The situation of India's football ranking is not good, due to which the youth do not see a good future here, that is why they try to take cricket as their career instead of football. Even if India invests a lot of money to form a good football team in their country from now on, it will still take many more years for India to build a good team. So I think that for a good footballer to come out of a country, that country needs to have a good football background.
I think you right about building a stronger football team takes time to build a strong football team effort and investment, pulse a good football background, which include infrastructure, coaching and support, can help nurture talented players and improve the sports over all standards. And aslo India football team face challenges in terms of ranking and development, which it making it looks harder for the young player's to see a future in football and in sports in total.