Events 
NCAER, in collaboration with the World Bank, hosted a discussion on the World Bank’s latest South Asia Economic Update and its implications for India. The event was attended by policy makers, researchers, academics, and representatives of the media.
The discussion featured a panel of experts, including Mr Suman Bery, Vice Chairman of NITI Aayog; Dr Franziska Ohnsorge, World Bank Chief Economist for South Asia; and Mr Aurelien Kruse, World Bank Lead Economist for India. Dr Sudipto Mundle, Chairman of the Board of Centre for Development Studies and Dr Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development, served as discussants. Dr Anil K Sharma, Secretary and Operations Director, NCAER, delivered the welcome remarks.
The April 2026 edition of the World Bank report presents the latest economic outlook for the region, along with an in-depth analysis of the role of industrial policy in development. The report examines key features of South Asia’s industrial policies, their impact on trade, and how the region can maximise gains from such policies. The report also explores recent trade reforms and the reshaping of global value chains driven by AI.
The presentations on the report indicated that South Asia remains the world’s fastest-growing region, with India acting as the principal engine of growth, even as it faces slower expansion due to energy market dislocations. Amid headwinds from global energy market dislocations on the back of the Iran war, South Asia’s growth remains on the upside, according to the World Bank’s latest projections for the region.
The World Bank report identifies key challenges, including heightened geopolitical risks affecting energy prices, persistent inflationary pressures, weaker external demand, and constrained fiscal space. At the same time, the region continues to rely heavily on domestic demand.
Over the medium term, trade reforms across South Asian countries could unlock additional growth by reducing barriers, particularly in emerging export sectors. However, accelerating job creation is becoming increasingly difficult, as employment prospects weaken in activities exposed to AI.
In his opening remarks, Shri Suman Bery said, “The steady rise in India’s economic status as a large economy, at market prices, is due to the fact that the country has not faced any significant financial crises along the way. In this context, the World Bank’s report on South Asia is an important empirical document for the region.” Mr Bery also advised India’s States and Union Territories to consolidate the gains of the nation’s economic growth rather than fragment its labour markets, and to ensure that the gains from trade would help augment productivity and efficiency.
Dr Franziska Ohnsorge said, “The South Asian region is the fastest growing in the world, primarily because of the rapid growth in India. The medium-term economic outlook in the South Asian region is also very encouraging, notwithstanding the overall slowdown because of the energy crisis caused by the impact of the ongoing war in the Middle East. In the longer term too, India is slated to grow rapidly due to the advent of trade reforms and their distributional impact.” She pointed out that “one of the biggest challenges for South Asia is the need to create more and better jobs, especially because over the next 10-15 years, about 280 million young people in this region will enter the workforce.”
Dr Ohnsorge also predicted India’s growth forecast to be 6.6 per cent of GDP. However, the ongoing conflict in the Middle East would make normalisation harder for energy markets, and also affect the resilience of remittances from the Gulf Cooperation Council (GCC) countries, including Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait, Oman, and Bahrain, which could impact overall long-term growth in the South Asian region, she suggested.
Mr Aurelien Kruse flagged private consumption as the main driver of growth of the Indian economy. He noted that India’s economy has remained strong despite the uncertainty emanating from recent trade policies of the USA. He also said that both exports and investment growth in India have remained resilient to market shocks. Further, he argued that low inflation and prudent fiscal and monetary policies are the buffers needed for combating trade shocks in the long run; effective agglomeration can help in improving trade and growth; and that high-end jobs necessitate special skilling initiatives for the workforce.
In his remarks, Dr Sudipto Mundle said, “A conspicuous development witnessed in the Indian economy has been its growth paradox—this is reflected in the fact that even though India has consistently been one of the fastest growing major economies of the world, growing at a rate of about 6 per cent, but simultaneously unemployment in the country has also been high. This growth paradox creates a conundrum for policymakers—should policy focus on GDP growth or on employment growth?”
Dr Nagesh Kumar maintained that the region “is exhibiting very robust growth, despite the challenges springing from the Middle East conflict. However, this growth should be supported by a dynamic industrial policy that keeps an eye on the global context and manufacturing trends.” He also highlighted the importance of promoting services for economic growth, especially since the services sector constitutes about 60 per cent of the GDP. In addition, he emphasised the role of forward and backward linkages in creating more indirect job opportunities.
The event concluded with Dr Anil Sharma thanking the chair, the two speakers, the two discussants, and all the participants for joining the discussion.