Context

• India’s rapid economic ascent, now valued at $4.19 trillion, has cemented its place as a rising global powerhouse and positioned to soon become the world’s third-largest economy, India’s growth narrative is compelling.
• Yet, this trajectory faces fresh challenges, particularly considering the United States’ proposed 50% tariffs on Indian exports.
• Targeting $40 billion in trade, these tariffs could potentially shave off nearly 1% from India’s GDP, striking hardest at labour-intensive sectors such as textiles, gems, leather, and footwear.
• Notably, these industries disproportionately employ women, making the tariff shock both an economic and gendered crisis.

The Gendered Vulnerability of India’s Economy

• Unlike China, which has weathered U.S. tariffs through its sheer manufacturing scale and diversified export base, India remains comparatively exposed.
• With the U.S. accounting for 18% of Indian exports, the imposition of steep tariffs could saddle Indian exporters with a 30–35% cost disadvantage against competitors such as Vietnam.
• This vulnerability is magnified by India’s underutilisation of half its population. Women’s economic participation is not only a matter of equality but also a strategic necessity.
• Sectors at risk from the tariff shock employ nearly 50 million people, with millions of women standing to lose their livelihoods.
• India’s female labour force participation rate (FLFPR) remains stuck between 37% and 41.7%, significantly lower than the global average and China’s 60%.
• The International Monetary Fund estimates that closing this gender gap could boost India’s GDP by 27% over the long term.
• Yet, cultural barriers, policy inertia, and systemic obstacles continue to stifle women’s employment.
• The looming tariff crisis exposes this neglect as a liability for India’s growth ambitions.

The Demographic Dividend Dilemma

• India’s demographic dividend, its bulging working-age population, offers a fleeting window of opportunity expected to close by 2045.
• Countries such as China, Japan, and the U.S. capitalised on similar moments to fuel decades of prosperity, but India risks squandering its chance.
• Low female participation threatens to convert this demographic boon into a demographic burden.
• In rural areas, women’s labour has inched upward, but largely in unpaid and low-productivity family roles.
• In urban centres, participation has stagnated, constrained by safety concerns, unreliable public transport, poor sanitation, and the weight of unpaid care responsibilities.
• Without decisive action, India risks the fate of Southern European economies such as Italy and Greece, where persistently low female labour participation has dragged down growth.

The Way Forward

• Global Lessons
  • Global experiences offer a roadmap for reform.
  • During World War II, the U.S. integrated women into the labour force with policies guaranteeing equal pay and childcare support.
  • China’s post-1978 reforms raised female participation to 60% through investments in care and education.
  • Japan, by boosting its FLFPR from 63% to 70%, lifted GDP per capita by 4%.
  • The Netherlands pioneered flexible part-time work with full benefits, a model especially relevant for India, where many women prefer such arrangements.
• Structural Reforms
  • India lags behind on all three fronts: legal protections, care infrastructure, and skill development.
  • Instead of resorting to short-term populism or blanket welfare, the country must embrace structural reforms that view women not as passive beneficiaries but as active economic agents.
  • Some promising models already exist. Karnataka’s Shakti scheme, which provides free bus travel for women, has boosted female ridership by 40% since 2023, improving mobility and independence.
  • Gig platforms such as Urban Company employ over 15,000 women, offering them income, insurance, maternity benefits, and skill development.
  • Rajasthan’s Indira Gandhi Urban Employment Guarantee Scheme has created millions of jobs, with women comprising 65% of its workforce, many entering the labour market for the first time.
  • These initiatives show that when mobility, safety, and flexible work opportunities are prioritised, women can meaningfully contribute to economic growth.

Conclusion

• The impending tariff shock from the U.S. should not be seen merely as a trade dispute but as a wake-up call for India.
• External vulnerabilities intersect with internal shortcomings, particularly the chronic underemployment of women.
• Empowering women is not a gesture of social justice alone; it is the linchpin of India’s future growth.
• India now stands at a crossroads. By investing in its women, the nation can secure resilience and inclusive prosperity, on the other hand, by neglecting them, it risks stagnation and fragility.