World Bank Warns India on Losing Ground in Manufacturing Amid Global Trade Changes

World Bank Report Highlights Decline in India's Manufacturing Sector

The latest business news from the World Bank stresses that India is falling behind in low-cost manufacturing against countries like Bangladesh and Vietnam, which are becoming significant export hubs. Despite India's rapid economic growth, its global trade share has stagnated, particularly in sectors including apparel, leather, and textiles.

Decline in Trade Share

India's involvement in global exports for essential goods has declined from a peak of 4.5% in 2013 to just 3.5% in 2022, while Bangladesh and Vietnam's exports have grown substantially. The World Bank highlights that India must reduce trade costs and redefine its trade agreements to regain competitiveness.

Call to Action for Policy Changes

• Focus on Lowering Trade Costs: Reducing tariff and non-tariff barriers is crucial.
• Revise Trade Pacts: Updating and renegotiating trade agreements with global partners will aid recovery.
• Employment Challenges: The capital-intensive nature of current export sectors is not addressing India's job market needs.

Nora Dihel, a senior economist at the World Bank, states: This is an area where India could focus on. This is a call to action. The report signifies the urgent need for strategies that align with the changing global landscape, especially as nations reconsider their supply chains.