World Bank Group President Ajay Banga on Thursday said India should “think less” about tariffs and focus more on opportunities, amid concerns over global trade due to geopolitical tensions. Elaborating on India’s opportunities in trade deals, Banga said over 100 regional and bilateral pacts have been signed by the country in the last 20 years, and the recent India-EU free trade agreement is an example of that.
“Think less about the tariffs, and more about the opportunities like you (India) have done (the FTA) with the European Union,” he said.
Banga’s comments came while interacting with media representatives during his tour of the Central Tool Room and Training Centre (CTTC) in Bhubaneswar. All trade deals are important, the top World Bank official said.
“If you look at the way trade has changed over last two decades, the global trade has quadrupled, while the share of the emerging markets doubled from 20 per cent to 40 per cent. Therfore, emerging markets like India have now become key components in the global trade,” he said.
India and the European Union recently announced the conclusion of negotiations for the FTA, described as ‘mother of all deals’, under which 93% of Indian shipments will enjoy duty-free access to the 27-nation bloc, while import of luxury cars and wines from the EU will become less expensive.
The deal, concluded after negotiations spanning about two decades, will create a market of about 2 billion people across the world’s fourth-largest economy, India, and the second-largest economic bloc, the EU.
“I think lowering the tariff and non-tariff barriers from both sides will benefit both sets of people, which is a very good idea,” Banga said.
He also lauded India for its progress in development of infrastructure during the last 10 years.
“It is a reality that airports, roads and other infrastructure are being built, and there is a further need for infrastructure, as India is a large country with enormous opportunity in different parts,” the World Bank Group President said.
He said India needs to further improve in terms of infrastructure, both in physical and human capital, business-friendly policies, and financing the private sector, including MSMEs.
Banga said there are five sectors that will provide growth in employment – infrastructure, agriculture, primary healthcare, tourism, and value-added manufacturing.
“India is active on these. I think rural productivity and rural prosperity is very important. Small farmers need access to stronger markets and better inputs. And that’s kind of what we are trying to do,” he said.
Banga said India has taken strides in primary healthcare, but there is “more opportunity” to deliver high-quality primary healthcare and that will employ nurses, medical diagnostic technicians and midwives, not just doctors.
“The country has done a fairly good job in tourism. But to me, the opportunity in tourism is still ahead. Remember that the number of tourists India get is still a fraction of what cities like New York and Paris get. India has land, it has seas and mountains. It has fabulous people, great food, great culture, history… If you cannot get higher numbers of tourists, that is our opportunity lost as a country,” he said.
India also has huge opportunities in value-added manufacturing, he said, giving an example of the the CTTC-Bhubaneswar.
Commenting on the Economic Survey’s projection that the country can grow by 6.8-7.2 per cent in 2026-27, Banga said, “Absolutely. I think India has demonstrated that it can show exceptional growth. The real thing is not the percentage of growth; what you need to think about is if you want to be ‘Viksit Bharat’ by 2047, the country needs to upscale skilling of youths.”
“Skilling our population in India is going to be very important. You have 12 million young people becoming ready for jobs every year. If you skill them the right way, 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 added.
