Lowering trade barriers in female-dominated sectors can drive economic growth: Exim Bank study

Lowering trade barriers in sectors with relatively high female employment can significantly boost economic growth and welfare, according to a recent study by the Export-Import Bank of India (Exim Bank).  

The study finds that a 1% reduction in tariffs faced by India’s exports in sectors that are relatively more important for the female workforce could lead to a 0.36% increase in labour supply in the country and a 0.14% increase in GDP. The welfare gains from such a tariff reduction are estimated to be nearly 3.6%. 

Speaking at the event organized by the Exim Bank and the World Bank, on 'Women and Trade: Advancing Inclusion, Expanding Opportunities & Boosting Economic Growth', M Nagaraju, Secretary, Department of Financial Services, emphasised the government of India’s commitment to women’s economic empowerment, highlighting the increasing share of gender budget in the Union Budget, policy focus on gender inclusivity in trade facilitation, and proactive efforts for enhancing financial inclusion.

He noted that women are key beneficiaries under the Pradhan Mantri Mudra Yojana and benefit from additional coverage available under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). 

Exim Bank’s study examined the participation of the female labour force in export-intensive sectors in the Indian context.  

According to the study, a higher proportion of female employees in India are engaged in low-technology and resource-intensive sectors such as food and beverages, leather products, and textiles and apparel etc leaving them disproportionately exposed to fluctuations in global demand and commodity price shocks. The study also highlights that sectors which employ women more, typically face higher tariffs on inputs, indicating the need to seek tariff relaxation in such sectors.  

The bank study also suggests actionable strategies to enhance women’s participation in trade and promote women’s economic empowerment. These strategies include mainstreaming gender consideration in trade agreements, enhancing implementation of women-centric trade facilitation measures, leveraging e-commerce to enhance market access for women, promoting women as suppliers through public procurement, enhancing women’s access to export finance and addressing gaps in gender-disaggregated data.