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.
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 multilateral lender said in a report on Tuesday.
The country’s share in global exports of apparel, leather, textiles, and footwear grew from 0.9% in 2002 to a peak of 4.5% in 2013, but has since declined to 3.5% in 2022, according to the World Bank. In contrast, Bangladesh’s share in global exports of these goods reached 5.1%, while Vietnam’s stood at 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 pacts, the lender said.
“This is an area where India could focus on,” Nora Dihel, a senior economist at the World Bank, told reporters in New Delhi. “This is a call to action.”
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