World Bank Suggests India Promote Labor-Intensive
Exports to Enhance Employment

Los Angeles/Sep 03, 2024
NRIpress.club/Ramesh/ A.Gary Singh

The World Bank has urged India to enhance its focus on labor-intensive exports to drive job creation, noting that the country has yet to fully capitalize on opportunities arising from China's exit from these industries. In the release of the "India Development Update" report, Auguste Tano Kouame, the World Bank’s country director, highlighted significant untapped demand for Indian products like textiles and footwear in regions such as Africa and Latin America.

While India has seen robust growth in high-tech sectors, including mobile phones and services, it has fallen behind in low-skilled sectors like apparel, leather, and textiles, which have been dominated by Bangladesh and Vietnam due to China's withdrawal. The report revealed a decline in India's global share of apparel exports from 4% in 2018 to 3% in 2022, driven by increasing production costs and decreasing productivity.

India, despite being the world's fastest-growing major economy with a 6.7% expansion in the April-June quarter, struggles with job creation and inclusive growth, with urban unemployment averaging 17%. The World Bank recommends that India attract investment by enhancing its Production Linked Incentive policy to boost low-skilled manufacturing exports, which hold high job potential for youth.

The report also suggests India lower import tariffs and better integrate into global value chains to strengthen export growth. For the fiscal year 2023/24, India's total goods and services exports surpassed $776 billion, while imports approached $855 billion. The World Bank has updated its economic growth forecast for India to 7% for the current fiscal year, an increase from the previous 6.6% estimate, driven by government infrastructure spending.

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