Asian Mail
The World Bank has revealed that India has failed to capitalize on the export opportunity presented by China’s withdrawal from labour-intensive manufacturing sectors, resulting in a decline in jobs directly and indirectly connected to international trade.
A Decade of Decline
Over the last decade, India’s share in global exports of labour-intensive sectors such as apparel, leather, textiles, and footwear has decreased. In contrast, countries like Bangladesh, Vietnam, Poland, Germany, and France have successfully increased their global export share in major job-creating sectors by up to 2% between 2015 and 2022.
Labour-Intensive Sectors in Decline
India’s labour-intensive sectors, including textiles, leather, gems and jewellery, and marine products, are experiencing a sharp decline. Shipments from these four high job-generating sectors have dropped nearly 12% compared to pre-pandemic levels five years ago.
Missed Opportunities
India’s textile and garment exports have remained stagnant at around $35 billion, while Vietnam and Bangladesh have gained market share, bolstered by free trade agreements (FTAs) and Least Developed Country (LDC) status. This has resulted in a 10-15% duty concession in Western countries.
Urban Youth Unemployment Remains High
Despite being the fastest-growing major economy, with an 8.2% growth rate in the last fiscal year, urban youth unemployment remains high at 17%.
Creating Trade-Related Jobs
To create more trade-related jobs, the World Bank suggests that India should integrate more deeply into global value chains, which would also create opportunities for innovation and productivity growth.
India’s Untapped Potential
The World Bank notes that India has considerable untapped potential to leverage international trade for development, despite dynamic services exports. However, policy barriers and other limitations have led to a decline in India’s share in Global Value Chains (GVCs).
Strategic Plan Needed
The World Bank recommends that India should develop a new strategic plan to diversify exports, leverage the changing geopolitical landscape, reduce trade costs, and improve trade facilitation. Additionally, recent free trade agreements that exclude key areas like digital trade limit their potential.
(Courtesy Indian Express)
