What's Holding India's Women Behind: The Case for Trade as a Tool for Economic Empowerment

EP 2 of #TradeTales- The (Not So) Fairytale of International Trade

Breaking Down Statistics: The Disparity Between Economic Growth and Gender Equality in India

The Global Gender Gap Report of 2024 , released by the World Economic Forum, has ranked India 129 among 146 countries worldwide. Ironically, India is now also the fastest-growing economy in the world , expanding at 8.4%, the highest in six quarters. Additionally, the Indian government has raised its GDP growth outlook for the fiscal year 2023-24 from 7.3% to 7.6% forecast earlier. Despite India’s rapid economic growth, its ranking in the Global Gender Gap Report 2024 presents a troubling reality.

India’s women greatly remain underrepresented in the workforce, with an estimated 670 million being left behind as India’s female labor participation rate dropped from 31 per cent to a mere 23 per cent in 2021 . A major factor for this dip could be blamed on the pandemic, however, three years on, statistics in the economic participation and opportunity index do not seem promising. As per the Global Gender Gap 2024 India’s economic participation and opportunity index gap is now 38.8%. In simpler terms, this means that only 38 women out of every 100 men have the same opportunities for economic participation in the country.

The Global Gender Gap 2024 encompasses four subindices as part of the report, namely, Economic Participation and Opportunity, Educational Attainment, Health and Survival and Political Empowerment. Of these four subindices, India’s rank in each of these are 142, 112,142 and 65 respectively, ranked out of 146 countries across the globe.

India’s ranking in the Economic Participation and Opportunity Index brings to light significant concerns about economic empowerment. Despite India's encouraging GDP growth and overall economic progress, it is troubling to observe that Indian women continue to lag behind in workforce participation. This disparity raises an important question: what are the root causes of this stark inequality? Gender inequality in India remains a complex challenge with far-reaching consequences. Contributing factors include the absence of inclusive laws, insufficient basic digital literacy at the grassroots level, and traditional norms that restrict women’s roles and opportunities. The issue is further complicated by the differing gender biases and experiences faced by rural and urban women . Currently, only 24 percent of women participate in India’s formal labor force, a figure that is among the lowest in developing nations. Moreover, it is projected that India’s economy could expand by an additional 60 percent by 2025—adding approximately $2.9 trillion —if women were employed in the formal economy at the same rate as men.

Ironically, while India’s economy is advancing towards becoming the third largest economy in the world, yet it’s female workforce participation remains paltry, calling for understanding factors that need further scrutiny to not just bring women into the formal workforce but also retaining them. As Dr Somvanshi puts it, “We want the women, but we can’t retain them” is the catch phrase to better understand this paradoxical sitution. If retention becomes the concern, the root cause of this could be attributed to women’s disproportionate responsibility of the diverse roles of women, significantly impacting their participation.

Can Trade and Investment Policies Bridge the Gender Gap?: A Micro Approach to International Law

How can trade address the issue of inequality and disparity in the Economic Participation Index? The solution lies in filling policy gaps through strategic approaches to Free Trade Agreements and adopting a new approach under the framework of “Micro International Law” This emerging theory of international economic law seeks to bridge the divide between global-level international law and its impact on domestic policies and diverse stakeholders. More often than not, trade agreements tend to be negotiated and discussed at the macro-level, designing top-down rules, whose ground-level impact is uncertain . Tools such as impact assessments and multilateral stakeholder initiatives could bridge the gap to the extent that they could only bring about the dialogue that could remodel laws, making it work for diverse stakeholders, as a one-time deal.? This new theory of “Micro-International Economic Law” oversees this aspect and seeks to incorporate empirical research and alternative models of legal research and policy tools to be read in tandem with one another. In essence, the net result must operate in such a manner that builds on legal and policy tools from the very grassroots level, working its way above to blend into international law and more specifically, international trade law, making the trade agreements and instruments of international law work for diverse stakeholders.

Trade and Investment: Two-step Solution Towards Steering Action

With all said and done on the need to make trade as a tool to work for everyone – the top-down and the bottom-up, the elephant in the room- trade for women’s economic empowerment still needs to be addressed. One of the most important aspects associated with gender inequality in India is retaining women in the workforce, with the need to heavily invest in the care economy. Investing in the care economy through international trade and investment encapsulates two key components. First, driving change through Free Trade Agreements, using them as laboratories for experiments. Second, prioritising explicit investment in the care economy. Both these policy interventions aren’t novel and in fact have been discussed far and wide.The novelty lies in how they need to be approached to really push the needle on using trade as a tool for economic empowerment.?

Free Trade Agreements: Laboratories for Policy Experiments

Free Trade Agreements for a long time have been used as “sandboxes” to experiment the inclusion of various social and sustainable development issues. In the present context, there is a strong need to use these legal instruments to drive change. New Delhi must focus on using FTAs as a leverage to not merely negotiate “aspirational” legal provisions in FTAs but also drive necessary policy interventions critical to the implementation of the same. For instance, Bahri’s Gender Responsiveness Scale could be used as a yardstick to assess legal provisions in FTAs and move beyond simply being “acknowledging inclusion” and “aspirational content”. As the adage goes, things are easier said than done, it is essential to draw analogies of how implementation also needs to be a part of the steering inclusivity agenda and not just be limited to mere statements. ?

European countries have been at the forefront of integrating gender considerations into trade agreements, setting an example of how inclusive trade policies can empower women economically. The European Union (EU) has made notable strides in this area by incorporating gender equality clauses into its trade agreements.

For instance, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) includes commitments to gender equality and the empowerment of women. The EU has also pushed for gender-responsive trade policies in its negotiations with other countries, emphasizing the need to consider the impact of trade on women and advocating for measures that promote women's participation in the economy. According to a 2021 report by the European Institute for Gender Equality (EIGE) , gender-responsive trade policies have contributed to narrowing the gender employment gap in EU countries by creating more opportunities for women in sectors like services and technology, which are often included in trade agreements.

South Korea presents another compelling case of how targeted trade policies can enhance women's economic participation. Over the past decade, South Korea has implemented various policy measures to support gender equality in trade and economic activities. One notable example is the incorporation of gender-specific provisions in the Korea-Chile Free Trade Agreement , which includes initiatives aimed at fostering women-led businesses and encouraging female entrepreneurship. Additionally, South Korea’s Ministry of Trade, Industry, and Energy has established programs that provide training and resources specifically for women entrepreneurs, facilitating their entry into international markets. According to a report by the World Trade Organization (WTO) , these efforts have led to a significant increase in the number of women-owned enterprises participating in export activities, boosting their contribution to the national economy.

Investing in the Care Economy: A Pathway to Gender Equality

Investment in the care economy transcends beyond the mere allocation of funds from the government’s annual budget towards schemes such as SEWA . Investment in the care economy is crucial for retaining women in the workforce , particularly in countries where traditional gender roles often place the burden of caregiving primarily on women. The care economy includes services related to childcare, eldercare, healthcare, and education—sectors that are essential for supporting working families and enabling women to participhe care economy includes services related to childcare, eldercare, healthcare, and education—sectors that are essential for supporting working families and enabling women to participate fully in the labor market. Banking on this mechanism would entail investments to flow internationally, in order to make this more integrated into the world economy.

According to a report by the International Labour Organization (ILO), women perform more than three-quarters of unpaid care work globally, which significantly limits their ability to engage in paid employment. By investing in the care economy, governments and businesses can alleviate this burden, making it easier for women to remain in or re-enter the workforce. For example, providing accessible and affordable childcare services allows women to pursue careers without the constant worry of balancing work and caregiving responsibilities. This not only increases women’s labor force participation but also enhances their economic security and independence. Furthermore, the World Economic Forum (WEF) highlights that investment in the care economy can lead to the creation of millions of jobs, particularly for women, thus contributing to broader economic growth and gender equality.

Free Trade Agreements (FTAs) can play a pivotal role in promoting investment in the care economy by including specific provisions that encourage such investments and prioritize gender equality. FTAs are powerful tools that can set standards and commitments for participating countries, and by integrating care economy provisions, they can ensure that trade policies actively support gender-sensitive economic development. For instance, an FTA could include clauses that incentivize the development of care infrastructure, such as daycare centers and eldercare facilities, by offering tax breaks or subsidies to businesses that invest in these areas. Additionally, FTAs can require signatory countries to implement national policies that support work-life balance, such as paid parental leave and flexible working arrangements, which are critical for retaining women in the workforce. A study by the United Nations Conference on Trade and Development (UNCTAD) emphasizes that gender-responsive trade agreements are more likely to lead to sustainable development outcomes by addressing the structural barriers that prevent women from fully participating in the economy. By embedding care economy provisions in FTAs, countries can not only enhance the retention of women in the workforce but also ensure that economic growth is inclusive and benefits all members of society.

Leveraging Trade for Inclusive Economic Growth

As India stands on the brink of becoming a global economic powerhouse, the opportunity to bridge the gender gap through trade policy has never been more critical. By embedding gender-sensitive provisions into trade agreements and investing in the care economy, we can ensure that economic growth benefits everyone. By integrating targeted policy interventions into Free Trade Agreements and embracing the principles of Micro-International Law, we can create a more inclusive economic environment that values the contributions of all stakeholders, particularly women. It is time to move beyond aspirational statements and take concrete actions to ensure that economic growth translates into equitable opportunities for all. The journey toward gender equality in trade and economic participation is not just a necessity but a transformative pathway to sustainable development.