India’s manufacturing sector could grow by 9% with increased female workforce participation, according to the World Bank’s latest South Asia Development Update. News reports quoted the report highlighting that closing gender gaps in labor force participation would yield the highest output gains in manufacturing across South Asia, followed by the services sector. The World Bank also maintained its GDP growth forecast for India at 7% in FY25 and 6.7% in FY26, noting strong domestic demand as a key growth driver in South Asia, alongside economic recoveries in Sri Lanka and Pakistan.
The report pointed to significant shifts in labor participation among South Asian women, noting that post-marriage employment rates drop by 12 percentage points across India, Maldives, Nepal, and Bangladesh. Policies supporting employment growth, as well as a strong agricultural sector, are expected to fuel private consumption, although public spending is projected to slow.
World Bank South Asia VP Martin Raiser remarked, “Key reforms to increase female labor force participation and reduce trade barriers could boost GDP by up to 51% in the region.” In India, the labor force participation rate for women rose to 41.7% in FY24, up from 23.3% in FY18, according to the latest Periodic Labour Force Survey.
