WB: India lags behind Vietnam and Bangladesh in manufacturing sector

India's share in global exports of apparel, leather, textiles and footwear is expected to decline to 3.5% by 2022 while that of Bangladesh and Vietnam will be 5.1% and 5.9% respectively.

Garment production at Garment Corporation 10 in Sai Dong, Long Bien District, Hanoi . (Photo: Anh Tuan/ VNA)

The World Bank (WB) on September 3 assessed that India's global trade market share has not kept pace with the country's rapid economic growth and that India is lagging behind countries such as Vietnam and Bangladesh as a low-cost export manufacturing hub. In the report, the multilateral lender noted that India's trade in goods and services has declined as a percentage of its gross domestic product (GDP) over the past decade despite the South Asian country's economic strength. The World Bank pointed out that India's share of global exports of apparel, leather, textiles and footwear rose from 0.9% in 2002 to a peak of 4.5% in 2013, but then fell to 3.5% in 2022. In contrast, Bangladesh's share of global exports of these items reached 5.1%, while Vietnam's share was 5.9% in 2022. To boost exports and benefit from China's shift away from labor-intensive manufacturing, India will need to lower trade costs, reduce tariff and non-tariff barriers and revise trade agreements, the World Bank suggested. Prime Minister Narendra Modi's ambition is to make India a manufacturing hub as businesses diversify their supply chains away from China. The Indian government has spent billions of dollars in subsidies to attract investment in industries such as electronics and chipmaking. However, India’s export sectors are increasingly capital-intensive and unable to absorb millions of unemployed domestic workers. The World Bank estimates that employment directly linked to exports has fallen from a peak of 9.5% of total domestic employment in 2012 to 6.5% in 2020. The World Bank expects India’s economy to continue growing at a brisk 7% pace in the current fiscal year (ending March 2025) after growing more than 8% in the previous fiscal year. The World Bank forecasts that India’s economic growth is likely to average 6.7% in fiscal years 2025-26 and 2026-27.

Vietnamplus.vn

Source: https://www.vietnamplus.vn/wb-an-do-cham-hon-viet-nam-va-bangladesh-trong-linh-vuc-san-xuat-post974176.vnp