Saying that India’s fortunes lie largely in its own hands, the World Bank has identified two global risks that could jeopardise the country’s progress towards a ‘global middle-class status’. These two risks are anti-international trade sentiment and climate change. India’s services exports are being challenged and the climate change is posing threat to the agricultural sector, the World Bank said.
“The negotiation of regional trade agreements has stalled, protectionist measures are spreading, and current trade agreements may be reconsidered. India’s services exports are being challenged by restrictions to the temporary movement of workers, by policy responses to anti-outsourcing sentiment and restrictions that could hurt its burgeoning IT sector,” the World Bank said in a draft Systematic Country Diagnostic (SCD) for India.
Media reported have pointed out that US President Donald Trump’s ‘buy American and hire American’ could hurt Indian IT companies like Infosys and TCS, which send Indian techies to the country to work for their clients. The World Bank said that while this is more of an immediate global risk, the longer-term risk is the climate change which could hurt n India’s agriculture, coastal cities, and glaciers if the Paris Climate Change Accord breaks down.
“If global temperatures increase by 40 C, India would shift to a new constellation of climate patterns that would be harsher and less conducive to development. Monsoons, already fickle, would become even more variable so that an extreme “once in a 100-year” flood or drought is projected to occur every 10 years,” the World Bank said.
“Yields of all major crops would fall, while food, energy and water security will all come under increasing pressure.”
Tackling climate change threats, the World Bank said, requires building resilience through innovations in climate-smart agriculture and reorienting incentives for better resource management and that the government can play a facilitating role. The World Bank further suggested that for India to create millions of productive jobs, it will require building a competitive export-oriented industrial base.