A former Bangladeshi diplomat has argued that India's rise as the world's fourth-largest economy conceals a failure to create mass employment — and that Bangladesh must avoid the same trap as it diversifies beyond garments and leaves least-developed-country status.
The analysis, published by The Daily Star, was written by a former Minister (Press) at the Bangladesh High Commission in New Delhi, drawing on 14 months of travel and observation across Uttar Pradesh, Uttarakhand, Rajasthan, West Bengal, Andhra Pradesh and Himachal Pradesh.
"India possesses enormous capability, but it also carries a deep structural imbalance," the author wrote. "It is a country of scale without enough spread and wealth without enough diffusion."
The argument matters for Dhaka now because Bangladesh is preparing for graduation from LDC status and searching for its next engine of jobs and exports beyond the garment trade. India's experience, the author contends, shows what happens when growth concentrates in capital-intensive services before an industrial base is secured.
Why India's growth is called "jobless growth"
The headline figures are flattering: output above $4 trillion, growth often between 6% and 8%, a surging stock market and an internationally admired digital payments network, according to The Daily Star's account. Western capitals increasingly see India as a democratic counterweight to China.
But roughly 10 to 12 million young, educated Indians enter the workforce each year — comparable, the author wrote, to adding a country the size of Belgium annually. Software parks, finance offices and high-end services cannot absorb such numbers; that requires factories, warehouses and medium-sized enterprises hiring by the thousand.
Economists call the result jobless growth: rising output without sufficient employment creation. Capital-intensive sectors such as finance, telecoms and digital platforms can lift GDP quickly while adding relatively few jobs. Urban youth unemployment in India has often ranged in the mid-to-high teens, and female youth unemployment in some regions has been dramatically higher, The Daily Star reported.
Recruitment frenzies show the scale of India's youth unemployment
In 2022, Indian Railways announced around 35,000 vacancies; more than 12 million people reportedly applied — roughly one opening for every 357 applicants. When exam rules changed, protests erupted in Bihar and elsewhere.
In Uttar Pradesh in 2024, more than 93,000 applicants reportedly sought 62 peon posts, many of them graduates, engineers and postgraduates competing for basic clerical and messenger work, according to The Daily Star.
The figures also understate the problem, the author argued, because of widespread disguised unemployment — several family members sharing work that would productively occupy one person.
Make in India manufacturing GDP share fell short of target
In 2014, the Indian government launched "Make in India," promising to raise manufacturing's share of GDP from around 16% to 25%. A decade later, the share remained well below target and by some measures slipped closer to 13%–14%.
During the global "China Plus One" shift, as multinationals sought to diversify away from China, they did not move overwhelmingly to India. Many expanded instead in Vietnam, Mexico and Bangladesh.
Vietnam, with a population under 100 million, became a major exporter of electronics, footwear, leather accessories and apparel. Bangladesh, despite far fewer resources, built garment exports exceeding $45 billion annually in recent years. India lost ground in the labour-intensive sectors — textiles, leather goods, footwear, toys, light engineering — that could have employed millions.
The barriers are well documented: slow and politically contentious land acquisition, uneven power reliability, costly ports and logistics, contract enforcement that can take years, and dense regulation. An Observer Research Foundation study found more than 69,000 compliance requirements for doing business in India, with over 26,000 clauses carrying imprisonment provisions.
What the Indian case means for Dhaka's next phase
Countries that lifted hundreds of millions out of poverty — Britain, Germany, Japan, South Korea, Taiwan and China — industrialised first, moving rural labour into factories before services dominated. India moved toward a service-led economy before completing that stage.
For Bangladesh, the lesson cuts both ways. Garments proved that labour-intensive manufacturing can generate mass employment and export earnings. But the Indian experience warns against premature deindustrialisation or over-reliance on services before a broader industrial base is secure.
Whether India can revive labour-intensive manufacturing or meet its 25%-of-GDP target remains unresolved. For Bangladesh, the open question is whether it can fix land, power, logistics and regulatory frameworks quickly enough to attract factories that hire by the thousand — before its LDC-era trade preferences expire.