The World Bank has reported that during the past ten years, jobs in India that are directly or indirectly related to foreign commerce have decreased. The report also noted that China’s exit from labour-intensive manufacturing sectors has prevented India from taking advantage of this export opportunity.
Economists at the World Bank observed that India’s proportion of labour-intensive exports to the world market has decreased in areas including clothing, leather goods, textiles, and footwear. In the meantime, nations such as Bangladesh, Vietnam, Poland, Germany, and France have been able to raise their global export per centage in significant employment-generating industries by as much as 2 per cent between 2015 and 2022.
India’s US $ 35 billion in textile and apparel exports have stayed flat, while Bangladesh and Vietnam have increased their market share thanks to free trade agreements (FTAs) and their designation as least developed countries (LDCs), which exempts them from duties in Western nations by 10 to 15 per cent.
The Bank said that although India is the largest economy expanding at the fastest rate—8.2 per cent during the most recent fiscal year—urban youth unemployment is still quite high at 17 per cent. The Bank recommended that India should integrate itself more thoroughly into global value chains in order to increase trade-related employment. This would also open up new avenues for productivity growth and innovation.
According to the World Bank, although the global trade environment is complex and changing, India still has a lot of unrealised potential to use trade with other countries to further its development, even in spite of its growing services export industry.
The Bank pointed out that while Indian businesses stand to gain a great deal from joining GVCs, their proportion in GVCs has decreased as a result of “policy barriers and other limitations.”
India might gain from a new strategy plan to diversify exports, take advantage of the shifting geopolitical environment, lower trade costs, and enhance trade facilitation, according to World Bank analysts.
