Leveraging Trade and Digitalisation to Boost Women’s Labour Force Participation

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Most economic outlooks for the near-term — from the International Monetary Fund (IMF) to Morgan Stanley — peg India as a bright spot in an otherwise gloomy economic milieu. The country’s economy is growing, and it is only a matter of time before India surpasses Japan and Germany to become the world’s third-largest economy — one of the early estimates for that to happen is 2027.

With this momentum coming as it takes over the Presidency of the G20, many believe India has a very real opportunity to emerge as the new factory to the world — a position China has held for years. India is already a leader in services exports (often dubbed as the world’s “back office”), and its new wave of digitalisation has allowed it to further consolidate that position, while also facilitating merchandise trade.

Meanwhile, The Economist thinks India’s likely ascent to surpass China as the world’s most-populous country is one of five key stories to watch for in 2023. Some analysts suggest that feat may have already been achieved.

But despite these developments, India’s growing potential will not be fully realised if women’s participation in the economy fails to increase — or worse still, falls.



Addressing India’s Low Female Labour Force Participation Rate
Today, the labour force participation rate (LFPR) for women age 15 and over in India is around 24%. This compares poorly with most countries, no matter which part of the world we look at. For instance, women’s LFPR (15+) is roughly 55% and 57% in the ASEAN region and the United States respectively. This highlights the under-tapped potential for millions of women workers to fill the growing number of factories and offices in India that can produce goods and services for the world.

As production gets deconcentrated and diversified around the world, countries with vastly smaller populations than India’s have much higher female LFPRs: For instance Vietnam — another contender to attract global manufacturing supply chains — benefits from a female LFPR (15+) of 69%, and its consistent success in this area has been lauded by the IMF. India’s Chief Economic Advisor, along with two Indian Economic Service officers, wrote a very well-argued piece on why the country’s female LFPR may not be as low as we think, given methodological issues in measuring women’s participation in the economy. But even if that’s the case, it’s likely that australia whatsapp number data a corrected LFPR would still not demonstrate that the country is taking full advantage of women workers’ potential.

In response to this issue, Prime Minister Narendra Modi has called attention to India’s female LFPR. He has made “women-led development” a priority item in India’s agenda for its G20 Presidency, which aims to be “inclusive, ambitious, action-oriented and decisive.” And last summer, he called for employers to offer more flexible workplaces, to help increase women’s labour force participation. The IMF’s Deputy Managing Director Gita Gopinath has echoed these calls for more labour force participation from women, speaking from the 2023 World Economic Forum in Davos.

However, bringing more women into the workforce — including wage/salary workers, self-employed workers and women-led enterprises — will require interventions at multiple levels, not only economic but also social and political. Below, I’ll discuss two areas where these interventions should focus.