India's Economic Growth and Challenges
India is on the path to becoming the world's third-largest economy, currently valued at $4.19 trillion, indicating a significant role in the global growth narrative. However, potential U.S. tariffs of up to 50% on Indian exports, targeting $40 billion in trade, could negatively impact India's GDP and labor-intensive sectors like textiles, gems, leather, and footwear, which employ a large number of women.
Impact on Female Employment
- The U.S. accounts for 18% of India's exports, and tariff increases could place Indian exporters at a 30%-35% cost disadvantage compared to competitors like Vietnam.
- The textiles, gems, leather, and footwear sectors, employing nearly 50 million people, face potential export declines of up to 50%.
- India's female labor force participation rate (FLFPR) is stuck between 37% and 41.7%, below the global average and China's 60%.
- Closing the gender gap could boost India's GDP by 27% in the long term, according to the International Monetary Fund.
Cultural and Policy Barriers
Cultural constraints, policy inertia, and systemic barriers hinder female employment. With India nearing its demographic dividend peak, it must act to integrate women into the workforce. Failing to do so risks a long-term drag on economic growth similar to Southern European economies.
Global Examples and Roadmaps
- The U.S. used women's labor during WWII with equal pay and childcare.
- China's post-1978 reforms boosted the FLFPR to 60% through state-backed care and education.
- Japan raised its FLFPR from 63% to 70%, increasing GDP per capita by 4%.
- The Netherlands' part-time work model provides equal benefits, suiting India's preference for such roles.
Structural Reforms Needed
- Karnataka's Shakti scheme, offering free public bus travel to women, increased female ridership by over 40% since its 2023 launch.
- Redirect spending from broad welfare to targeted programs like tax incentives for female entrepreneurs and digital inclusion drives.
- Formalizing gig and part-time work with updated labor codes can bring more women into the formal economy.
Case Studies and Programs
- Rajasthan's Indira Gandhi Urban Employment Guarantee Scheme created over four crore person-days of work, with nearly 65% of jobs going to women.
Conclusion: Empowering Women as a Growth Imperative
The need to empower women is not merely a social gesture but a growth imperative. Leveraging the potential of working-age women is crucial for utilizing the demographic dividend, maintaining export competitiveness, and achieving equitable development. India's path to becoming a global powerhouse hinges on investing in its women, leading to resilience and inclusive growth.