India’s global trade share hasn’t kept pace with its fast growing economy, and the country is losing out to rivals like Bangladesh and Vietnam as low-cost manufacturing export hubs, the World Bank said according to a media report.
India’s trade in goods and services has been declining as a percentage of gross domestic product over the past decade despite its economic heft, the World Bank said in a report on Tuesday.
India’s share in global exports of apparel, leather, textiles, and footwear has declined from 4.5 percent in 2013 to 3.5 percent in 2022. In contrast, Bangladesh’s share in global exports of these goods reached 5.1 percent, while Vietnam’s stood at 5.9 percent in 2022, the report noted.
India’s export sectors, are increasingly capital intensive, though, and unable to absorb millions of jobless people in the country. The World Bank estimated that direct employment related to exports fell from a peak of 9.5 percent of total domestic employment in 2012 to 6.5 percent in 2020.
According to the report, the World Bank expects India’s economy to continue growing at a rapid pace of 7 per cent in the current fiscal year through March 2025 after expanding more than 8 percent in the past year. Growth will probably average 6.7 per cent in 2025-26 and 2026-27, the lender said.