The Hindu Editorial Analysis
27 August 2025
The gender angle to India’s economic vulnerabilities
(Source – The Hindu, International Edition – Page No. – 8)
Topic :GS 3 : Economics
Context
U.S. tariffs jeopardising millions of women in labour-intensive sectors highlight the urgent need to empower women as economic agents.
Introduction
India’s economic ascent, now valued at $4.19 trillion, has secured its firm place in the global growth story. The country is on track to become the world’s third-largest economy. However, this momentum faces a significant disruption with the proposed 50% tariffs by U.S. President Donald Trump on Indian exports. Targeting $40 billion in trade, these tariffs could reduce India’s GDP by nearly 1%, hitting labour-intensive sectors such as textiles, gems, leather, and footwear—industries that disproportionately employ women and form a crucial part of the country’s economic backbone.
Tariffs and Women’s Workforce Imperative
- Unlike China, which has managed U.S. tariffs through its manufacturing scale and diversified exports, India remains vulnerable.
- The U.S. accounts for 18% of India’s exports; any increase in tariffs could impose a 30%-35% cost disadvantage against competitors like Vietnam, leaving Indian exporters exposed.
- In this context, the saying holds true: “The strength of a nation lies in the strength of its women.”
- India’s failure to economically empower women is not only a social concern but a strategic liability.
- Tariffs threaten employment for millions of Indian women, particularly in sectors like textiles, gems, leather, and footwear, which employ nearly 50 million people.
- These sectors face a projected export decline of up to 50%.
- India’s female labour force participation rate (FLFPR) remains low, between 37% and 41.7%, far below the global average and China’s 60%.
- The International Monetary Fund (IMF) estimates that closing the gender gap could boost India’s GDP by 27% in the long term.
- However, this potential is limited by cultural constraints, policy inertia, and systemic barriers to employment.
The ticking clock
- India is nearing the peak of its demographic dividend, a period when the working-age population far exceeds dependents.
- This window of opportunity, likely closing by 2045, previously drove growth in China, Japan, and the U.S., which are now past their prime demographic advantage and experiencing flattening growth curves.
- To convert this fleeting dividend into sustained prosperity, India must fully integrate women into the workforce.
- Rural women’s labour participation has risen, but mostly in unpaid and low-productivity family work.
- In urban India, female workforce participation remains largely stagnant.
- Challenges such as safety concerns, unreliable public transport, poor sanitation, and the heavy load of unpaid care work continue to push women out of schools and jobs.
- India risks replicating the experience of Southern European economies like Italy and Greece, where low female labour force participation (FLFPR) has caused a long-term drag on growth.
- The situation is urgent: this is a now-or-never moment for inclusive economic action.
Lessons from abroad, solutions at home
- Global superpowers provide a clear road map for women’s economic empowerment:
- The U.S. leveraged women’s labour during World War II with equal pay and childcare support.
- China’s post-1978 reforms increased female labour force participation rate (FLFPR) to 60% through state-backed care and education initiatives.
- Japan raised its FLFPR from 63% to 70%, boosting GDP per capita by 4%.
- The Netherlands implemented a part-time work model with equal benefits, suitable for India where many women prefer flexible roles.
- These countries invested in legal protections, care infrastructure, and skills training—areas where India currently lags.
- India’s focus should shift from short-term populism or blanket cash transfers to structural reforms that empower women as economic agents.
- Karnataka’s Shakti scheme illustrates effective intervention:
- Offers free public bus travel to women.
- Since 2023, female ridership has risen by over 40%.
- Enhances women’s mobility for work, education, and enterprise, especially in rural and peri-urban areas.
- Improves access to job markets, reduces dependence on male family members, and increases autonomy.
- Targeted programmes can provide sustainable gains:
- Tax incentives for female entrepreneurs.
- Digital inclusion drives.
- Gender-focused skilling platforms.
- Formalising gig and part-time work via updated labour codes and social protections can integrate millions of women into the formal economy.
- Urban Company, a leading gig platform, demonstrates empowerment through gig work:
- Onboarded over 15,000 women service providers.
- Monthly earnings of ₹18,000–₹25,000 with accident insurance, maternity benefits, and skill development.
- Emphasis on safety, training, and transparent pay shows how semi-skilled urban women can benefit.
- Public sector initiatives like Rajasthan’s Indira Gandhi Urban Employment Guarantee Scheme:
- Generated over four crore person-days of work, with 65% of jobs going to women.
- Offers flexible, neighbourhood-based jobs in sanitation, greening, and care work.
- Enables first-time workers, particularly those restricted by domestic duties, to enter the workforce.
- Demonstrates that state recognition and support for non-traditional work can unlock massive economic value.
Conclusion
The looming U.S. tariff shock should act as a stark wake-up call for India. The country’s economic vulnerabilities are not solely the result of external threats; they also arise from internal neglect, particularly in harnessing the potential of working-age women. Empowering women is far more than a social gesture—it is a growth imperative. It serves as the linchpin for demographic dividend utilisation, export competitiveness, and equitable development. For India to emerge as a true global powerhouse, its progress must be grounded on the contributions of both men and women. The nation stands at a crossroads: it can advance by investing in women, or it can stumble by ignoring them. One path promises resilience and inclusive growth, while the other risks missed opportunities and economic fragility.