World Bank urges India to boost labour-intensive exports for jobs
There was a lot of untapped demand for Indian goods, such as textiles and footwear in Africa and Latin America
INDIA should focus on labour-intensive exports to boost employment, The World Bank said on Tuesday (Sep 3), noting that the country’s manufacturing industry has not fully seized opportunities from China’s exit from these sectors.
“India should also try to conquer less advanced markets,” said Auguste Tano Kouame, World Bank country director, during the release of the “India Development Update” report.
He said there was a lot of untapped demand for Indian goods, such as textiles and footwear in Africa and Latin America. India’s high-tech exports, including mobiles and services, have grown significantly over the past decade, but the country has lost ground in low-skilled sectors such as apparel, leather, and textiles to Bangladesh and Vietnam, which benefited from China’s withdrawal from labour-intensive manufacturing, the report said.
“With rising costs of production and declining productivity, India’s share in global apparel exports has declined from 4 per cent in 2018 to 3 per cent in 2022,” the report said.
India has emerged as the world’s fastest-growing major economy, expanding 6.7 per cent year on year in the April-June quarter but faces a challenge in job creation and more inclusive growth.
The World Bank said the urban unemployment rate remains high at an average of 17 per cent.
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Kouame suggested that India could attract investors by offering concessions under its Production Linked Incentive policy, to boost low-skilled manufacturing exports, which have higher job potential for young workers.
The report also recommended that India reduce import tariffs and integrate into global value chains to help increase its exports.
India’s total goods and services exports for the fiscal year 2024, which ended in March, surpassed US$776 billion, government data showed. Imports for the same period were nearly US$855 billion.
The World Bank also raised its economic growth forecast for India to 7 per cent for the current fiscal year, from an earlier estimate of 6.6 per cent, helped by government spending on infrastructure.
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