India has a real opportunity to emerge as a key player in global manufacturing, but it must act quickly or risk missing the moment, said Ajay Banga, President of the World Bank.In an interview with CNBC-TV18, he emphasised that while progress is being made, such as with Apple’s manufacturing in the country, more comprehensive efforts are needed to create the vast number of jobs India requires. “To be honest, if you don’t seize it quickly, the moment will pass us by, because others are moving on this very quickly as well,” Banga cautioned.A major hurdle for India’s manufacturing ambitions is its high logistics costs, which Banga identified as a significant bottleneck. He pointed out that for India to be truly competitive, especially when considering labour and logistics arbitrage, these costs must be addressed. “The real issue is that India’s logistics cost is still very high,” he noted, adding that innovative thinking and sustained effort are required to tackle this challenge effectively.
Despite this, India’s large workforce presents a strong potential advantage, though Banga highlighted the critical need for skilling this workforce to meet the demands of a modern manufacturing sector. He acknowledged that the Indian government, including PM Modi, is showing clear intent and eagerness to push forward with necessary reforms and skill development initiatives.However, improvements are still needed in the ease of doing business. Banga stressed that streamlining processes for opening businesses, acquiring land, and managing labour are vital if India aims to deeply integrate into global supply chains.ALSO READ | World Bank’s Ajay Banga wants Amul model to be replicated globallyFurther, he acknowledged that India’s substantial investments in infrastructure over the past few years are now paying off, positioning the country well to capitalise on current global opportunities.Looking ahead, Banga suggested that global trade reforms could be a game-changer for India’s manufacturing sector. He specifically mentioned the potential of a “zero-for-zero” trade deal, which he believes “will greatly facilitate the reduction of friction, which is exactly what you need for a global supply chain.”With several pieces falling into place, the key question, according to Banga, is whether India can make the next decisive move to fully leverage its current advantages.Watch accompanying video for entire conversation.(Edited by : Shoma Bhattacharjee)First Published: May 8, 2025 5:43 PM IST
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