‘Focus less on tariffs’: World Bank’s Ajay Banga lists 5 sectors that can drive job creation in India

Banga told reporters in Bhubaneswar, “All trade deals are important. If you look at the way the trade has changed over the last 20 years, global trade has quadrupled, but the share of the emerging markets has also doubled from 20% to 40%. Emerging markets like India are now a key component in global trade.”

However, he cautioned that the deal needs to be rolled out in the right phases so that it does not damage the domestic market on either side.

Banga at CTTC, a unit of the Union Ministry of MSME. Speaking to reporters, Banga cautioned that trade deal needs to be rolled out in the right phases so that it does not damage the domestic market on either side. (Express Photo)

On Tuesday, India and the EU announced the conclusion of negotiations for a Free Trade Agreement (FTA). Prime Minister Narendra Modi said the deal would boost manufacturing in India and expand service-related sectors in the country.

On heightened uncertainty in global trade and regarding US tariff pressure, Banga said India should think less about tariffs and more about opportunities.

“In the India-EU deal, the conversation is not about tariffs; it’s about opportunity. In the Indian economy, exports are a small percentage, while domestic consumption and capital formation are the major strengths. In other countries, exports constitute a much higher percentage. So, focus less on tariffs and more on the opportunities, that’s the way to think about it,” Banga said.

Regarding India’s growth rate projection of 6.8-7.2% as estimated in the Economic Survey, Banga said the country has demonstrated that it can have exceptional growth.

He emphasised skilling the youth and making them ready for jobs every year to achieve the goal of Viksit Bharat (Developed India) by 2047.

“The real thing is not the percentage of growth. Skilling our population in India is going to be very important. You have 12 million young people becoming ready for a job every year. If you skill them the right way, then you can get them the opportunity to work in a state, in a city, in a village, in another town and in countries overseas,” he said.

To create job opportunities, he stressed the need for creating both physical and human capital, business-friendly policies, and financing the private sector.

According to officials, the WBG-India strategic partnership will be announced in New Delhi on Friday.