World Bank Group president Ajay Banga on Thursday welcomed the India European Union trade deal, calling it a positive step for people on both sides and urging India to look beyond tariff debates.
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Speaking during his visit to Odisha, Banga described India as a rising force in global trade and said reducing tariff and non tariff barriers would help unlock shared benefits. He also advised India to focus more on economic opportunities rather than tariff pressures, especially in the current global climate.
“Lowering tariff and non-tariff barriers on both sides will benefit both sets of people, which is a very good idea,” Banga said.
India’s growing role in global trade
Addressing reporters in Bhubaneswar, Banga said emerging markets like India now play a central role in international commerce. He pointed out how global trade has expanded rapidly over the last two decades, with developing economies claiming a much larger share.
“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,” he said.
However, he cautioned that trade agreements must be implemented carefully. According to him, rolling out the India EU deal in the right phases is essential to protect domestic markets on both sides.
On Tuesday, India and the European Union formally announced the conclusion of negotiations for a Free Trade Agreement. Prime Minister Narendra Modi said the pact would strengthen manufacturing and boost service sector growth in India.
Jobs, skills and growth priorities
Against the backdrop of uncertainty in global trade and pressure from US tariffs, Banga said India should focus on opportunity creation rather than tariff protection.
“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,” he said.
Banga also highlighted five sectors with strong job creation potential. These include infrastructure, agriculture, primary healthcare delivery, tourism, and value added manufacturing.
During his Odisha visit, he toured the Central Tool Room and Training Centre in Bhubaneswar, which operates under the MSME Ministry and focuses on providing industry ready technical skills to young people.
Commenting on India’s projected growth rate of 6.8 to 7.2 percent in the Economic Survey, Banga said the country has already shown its ability to sustain high growth. He stressed that skilling the workforce would be key to achieving the goal of Viksit Bharat 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.
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He added that long term job creation will require investment in physical and human capital, business friendly policies, and strong private sector financing.
Officials said the World Bank Group India strategic partnership is expected to be announced in New Delhi on Friday. |
