Back to today’s briefing

Story perspectives

India's Growth Hindered by Low Productivity and Trade

11/18/2025

24 6 Full Breakdown

Summary

Story summary

India faces low productivity because agriculture accounts for 17.8% of GDP and 46.1% of the workforce.
A stable manufacturing sector and potential demographic advantages could support faster growth, but India must achieve growth above 6.5% to close the income gap with high-income countries.
Trade remains underutilized, with India accounting for only 1.8% of global merchandise exports.

History

Historical Context

India's economic reforms, initiated in 1991 by Prime Minister P. V. Narasimha Rao and Finance Minister Manmohan Singh, aimed to liberalize trade and reduce state control amid a severe balance of payments crisis. These reforms spurred GDP growth, averaging 6% annually, but also highlighted challenges in agriculture, which contributes 17.8% to GDP yet accounts for only 1.8% of global merchandise exports.

1 of 2

Story summary

India faces low productivity because agriculture accounts for 17.8% of GDP and 46.1% of the workforce.
A stable manufacturing sector and potential demographic advantages could support faster growth, but India must achieve growth above 6.5% to close the income gap with high-income countries.
Trade remains underutilized, with India accounting for only 1.8% of global merchandise exports.

1 / 2