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India can be a global leader in technical textiles.

With nearly 2 per cent of the contribution to the country’s GDP, India is the sixth largest exporter of textiles globally and holds 3.9 per cent share in world textile exports. The sector provides direct employment to over 45 million people and indirect jobs to over 100 million people (Ministry of Textile 2023-24). Estimated to touch $350 billion by 2030, the Indian textile industry is expected to create 3.5 crore jobs.

However, the National Accounts Statistics 2023-24 shows that the share of manufacture of textiles and cotton ginning in the country’s GVA has been almost stagnant during 2013-18 and 2018-24, reflecting a CAGR of (-) 1 per cent. While the traditional sub-segments of the textile sector are facing glitches over the years, the new niche segments (technical textiles) are carving new paths. Further, the ongoing political un-rest in Bangladesh has opened up both risks and opportunities in sustainable textiles, organic cotton, and eco-friendly manufacturing in India. While traditional textiles remains vital, the rise of technical textiles has opened a key opportunity.

Advanced tech

Technical textiles is an advanced technology used for various applications ranging from automobiles to space applications. The demand for sustainable textiles is increasing particularly for applications such as packtech (biodegradable jute sacks), indutech (conveyer belts, etc.), hometech (blinds, fire-resistant curtains, etc.), meditech (non-woven absorbent pads) and sportstech (wearable technology for sports and fitness applications). Further, the 3D non-woven textiles have expanded the industry’s reach into automotive, aerospace and protective gear manufacturing.

While the Indian technical textile industry is experiencing strong growth of 10-12 per cent (CAGR), the market is projected to grow from $29 billion in 2024 to $309 billion by 2047. The country has also become a net exporter of technical textiles recording a growth of 5.3 per cent CAGR from $1.99 billion in 2019 to $2.59 billion in 2024. The penetration rate is expected to increase from 13-20 per cent in 2026 to 40-60 percent by 2047.

The government has introduced a range of policies, including the National Technical Textiles Mission (NTTM) and Production Linked Incentive (PLI) scheme, to give a boost to this sunrise sector. While the NTTM focusses on research and innovation, market growth, exports, PLI focuses on enhancing scale of production. The PM MITRA scheme has sanctioned seven integrated textile parks to improve infrastructure, supply chains and production efficiency. The government is reducing duties on new types of textiles machinery and correcting inverted duty structure to boost exports. Lastly, the government is focussing on creating jobs and skilling.

Over the next five years, the government aims to accelerate its market growth at 10-15 per cent. The NTTM plans to create 50,000 jobs.

This sector needs new range of skills starting from training in automation and digital technologies in manufacturing processes to a focus on sustainable practices.

However, the need of the hour is to strengthen the existing curriculum of textile engineering courses and making them more industry oriented, updated and practical, allowing students to make choices in their specific expert areas. The curriculum designing stages should involve active participation from industry professionals and offer industry internships or on-the job training to expose students to latest technologies and processes. These courses may be developed in collaboration with international universities that run more comprehensive technical textile engineering courses.

With better awareness, sufficient infrastructure, improved domestic machinery production and skilling, India has the potential to become a global leader in technical textiles.

Jain is Fellow, and Bhandari is Professor, at NCAER. The views are personal.

How developing countries are turning climate risk into economic opportunity

Jharia’s master plan is the £511m investment that climate finance cannot see.


The most serious constraint on climate finance in developing countries today is not simply a shortage of capital, but a persistent mismatch between how finance is structured and how climate action is pursued.

Public investments that reduce environmental risk, enhance economic resilience and deliver long-term development outcomes are underway across many low- and middle-income countries. Yet because they do not conform to narrow ‘mitigation’ or ‘adaptation’ classifications, these interventions remain outside the scope of most international climate finance. This reflects a deeper systemic issue: undervaluing economic transitions that are central to effective climate responses in developing economies.

This disconnect is evident in Jharia, a coal-dependent district in eastern India, where the government is implementing a long-term hazard mitigation programme to extinguish underground fires, stabilise land and relocate at-risk communities. The approximately £511m (or $692m) Jharia Master Plan, approved by India’s cabinet in June 2023, is not formally designated as a climate finance project, nor is it linked to carbon markets, despite its potential to reduce fugitive emissions and reshape spatial governance.

The plan falls through the gaps of existing climate finance frameworks because it straddles risk management, mitigation and adaptation in ways the current system is not designed to accommodate.

Jharia’s experience is not an outlier. Across a number of developing countries, resilience outcomes are being generated through domestic policy and public investment strategies that originate within development planning rather than environmental programming. However, the prevailing climate finance discourse continues to frame developing countries in terms of what they lack – capital, technology and regulatory capacity – rather than recognising the systems they are building in response to their own priorities.

What the numbers say

In Kenya, over 326,000 farmers supported through public initiatives have adopted improved agricultural practices, leading to an average 41% increase in yields across key value chains, according to the World Bank’s Climate-Smart Agriculture Project.

In Ethiopia, the national agricultural research system has developed rust-resistant wheat varieties that have delivered productivity gains of up to 40% in targeted areas. These efforts are institutionally led, fiscally embedded and adapted to local contexts. They directly reduce climate vulnerability but are not typically eligible for climate finance.

In Rwanda, the national Green Fund (FONERWA) has supported the development of local financial instruments aligned with climate goals. A green bond issued by Prime Energy Plc in 2023 raised £5.5m on the Rwanda Stock Exchange, demonstrating that even relatively shallow capital markets can mobilise long-term finance for climate-aligned infrastructure. Meanwhile, countries such as South Africa, Colombia and Mexico have introduced carbon pricing and environmental fiscal reforms that are now embedded within national revenue systems. These are not pilot projects – they are fiscal and regulatory shifts driven by domestic policy choices.

Financing as innovation, not just support

Yet these forms of institutional innovation remain largely unrecognised within mainstream climate finance frameworks. The World Bank’s 2020 report on coal mine closure emphasised that successful transition strategies require more than compensation or site remediation. They rely on coordinated land use, labour market strategies and institutional capacity. Where such components are missing, closure programmes tend to underperform. Where they are present, as in Jharia, their potential remains unrecognised by financial mechanisms that continue to prioritise narrowly defined mitigation activities.

Jharia remains an active coal mining region. Its challenge lies in the management of accumulated risk and structural distortion. The master plan includes social infrastructure, resettlement, skills development and land-use management – measures that collectively signal a shift in how the state is managing environmental risk. The programme is funded through public expenditure and led by national and state institutions. Yet its climate impact remains invisible in formal reporting. Methane and carbon dioxide released from underground fires are not accounted for in India’s national emissions inventory. Nor are avoided emissions from suppression efforts quantified or monetised.

This omission has fiscal and institutional consequences. Without recognised carbon accounting, the intervention cannot access carbon markets, nor can it attract outcome-based or performance-linked finance. A substantial public programme remains disconnected from the financial tools that could reinforce its long-term objectives. This is not simply a missed opportunity for revenue – it reflects a structural problem within the international system, which continues to reward technical interventions while undervaluing governance-based solutions.

Integrated approaches

Multilateral development banks have, in recent years, advocated for more integrated approaches to just transition. Some institutions have begun to pilot mechanisms that reward outcomes across labour, land use and energy governance. But these mechanisms remain limited in scale, often designed as demonstration projects. The operating logic of climate finance remains heavily tilted towards siloed mitigation projects, which sidelines integrated programmes like Jharia’s.

The impact of this approach is evident in global finance patterns. The Climate Policy Initiative’s 2023 Global Landscape of Climate Finance notes that less than 20% of total climate finance reaches low- and lower-middle-income countries, despite their acute exposure to climate risk. Where finance is available, disbursement is often constrained by fragmented donor governance and rigid project templates that fail to accommodate cross-sector strategies.

Jharia demonstrates that meaningful public investment need not originate in climate ministries or development banks. It also shows that emissions reduction and resilience can be achieved through public administration, land governance and institutional reform. Recognising and scaling such approaches will require a shift in how climate finance is designed and evaluated. That includes developing methodologies for quantifying avoided emissions in unconventional settings, funding mechanisms that reflect the time profiles of institutional reform and a greater focus on how public institutions shape outcomes.

There are early signs of this shift. Several countries are consolidating fragmented investments into national transition frameworks. Others are experimenting with devolved finance and performance-based disbursement. Yet the dominant climate finance architecture still treats mitigation, adaptation and just transition as distinct tracks. This makes it difficult to fund interventions that operate horizontally – across institutions, over time, and through non-technical channels.

Jharia is not a mitigation project in the conventional sense. It is a governance-led response to cumulative risk. Carbon credits will not extinguish its fires, but ignoring the mitigation value of those efforts perpetuates the gap between national action and international recognition. If climate finance is to support transitions that are durable and inclusive, it must evolve to accommodate precisely these kinds of interventions: institutionally grounded, locally designed and systemically significant.

Udaibir Das is a Visiting Professor at the National Council of Applied Economic Research, Senior Non-Resident Adviser at the Bank of England, Senior Adviser of the International Forum for Sovereign Wealth Funds, and Distinguished Fellow at the Observer Research Foundation America.

Build A Creche Like You Would A Highway

Formalising part-time work with fair pay, making transport and housing women-friendly, and enforcing laws. Otherwise, urban women’s work participation will be stuck at 28%

As India’s economy rapidly transforms and modernises riding on a youthful population, a booming digital and physical infra, and a spirit of optimism, conditions are favourable for the country to become a global economic powerhouse. Yet, a glaring omission persists: the full and equal participation of women in the workforce.

India vs the rest | While Indian women now outpace many global peers in education, comprising over 45% of undergraduates, their participation in the labour force, especially in urban areas, remains alarmingly low at just 28%, half of the remaining G20 average that exceeds 56%.

Globally, 47% of women are active in today’s labour markets, compared with 72% of men. This has immense economic growth potential for India, as well as the global economy.

IMF estimates emerging and developing economies could boost GDP by about 8% over the next few years by raising the rate of female labour force participation (FLFPR) by nearly 6 percentage points. This is the average amount by which the top 5% of countries reduced the participation gap during 2014-19.

Missing half the workers | Across countries, high FLFPR are driven by several enablingvpolicies: child and elderly care infra; safe and affordable housing and transportation; equalvaccess to real and financial assets; existence of flexible and part-time work; and social andvcultural norms.

Sweden, for example, has formalised part-time work and spends over 1.5% of GDP onvsubsidised childcare, lifting FLFPR to more than 80%. In Chile, universal early childhood programmes have increased maternal employment by over 10 percentage points.

Countries like Egypt have seen female employment rise through dedicated women-only metro cars. Meanwhile, advanced economies like Netherlands and Germany have unlocked female talent by ensuring part-time work comes with the same protections and pay as full-time roles.

Counting barriers | What has been India’s record in addressing barriers that prevent women from fully participating in the economy? Formalised part-time work simply does not exist.

In keeping with its goal to promote women’s economic empowerment and women-led development, Centre has in place at least 40 programmes across ministries in rural and urban areas. These are yielding results in rural areas, doubling FLFPR from 24% in 2017- 18 to around 48% in 2023-24. However, with FLFPR at 28% in 2023-24 in urban areas, these programmes are yet to make substantive difference. Many of the efforts remain scattered, underfunded, and not of high quality.

Mend infra gaps | A recent paper analysing a job-search model grounded in Indian data, found that formalising part-time employment contracts and gender-equitable burdensharing of unpaid care work could raise overall FLFPR by 6 percentage points from 37% to 43%.

This has two policy implications. First is to address gaps in formal part-time employment. Current labour codes recognise only full-time employment (48 hours/week), leaving millions of part-time workers unprotected. India needs to align with ILO standards to ensure part-time work guarantees fair pay, equitable benefits, and legal safeguards. Formalising part-time employment and introducing flexibility in working hours is lowhanging fruit as it can be implemented quickly.

Second, closing gaps in women-friendly infra. For example, very few Anganwadis operational in India meet quality benchmarks and elder care is virtually non-existent beyond big cities. There is limited women-only public transport, an acute shortage of working women’s hostels, and weak enforcement of anti-harassment laws, with less than 7% of sexual harassment cases resulting in convictions.

Learn from states | While some Indian states are already leading the way — Tamil Nadu, for example, with its expansion of working women’s hostels and Kerala with its self-help groups — much more is needed. India stands to gain immensely by activating its ‘missing’ female workforce. Capital investments in digitalisation, ports, highways, railroads, and bridges are undoubtedly transforming India’s economy.

But this transformation also requires building crèches and elder care facilities with the same urgency as roads; constructing working women’s hostels like highways; and ensuring safe and reliable public transport for women as more metro systems and buses are introduced. In addition, strict enforcement of existing laws on safety, harassment, maternity benefits, tax credits for private care facilities, and rural eldercare cooperatives could go a long way.

Investing in increasing FLFPRs will transform the living standards of families and raise GDP to even higher levels, paving the way for changing patriarchal norms and mindsets as it benefits everyone. In short, investing in women isn’t just a matter of equity — it is smart economics.

The writers are with NCAER. Views expressed are personal.

From access to awareness: Why India needs to boost digital financial literacy

From UPI processing over 17 billion transactions in a single month to kirana stores & vegetable vendors using QR codes, digital finance in India is no longer a luxury — it’s a lifeline.

This surge has brought unprecedented financial inclusion, especially in rural and semi-urban areas. But while access has grown, awareness has not kept pace.

“DFL combines two critical competencies: digital literacy and financial literacy. It means knowing how to use a smartphone or a payment app, but also understanding savings, credit, frauds, and grievance redressal. Without this knowledge, individuals are at serious risk of being excluded, misled, or even financially exploited.”

India is in the middle of a digital finance revolution — but the lack of Digital Financial Literacy (DFL) could make it a double-edged sword.

The gaps are striking. While India’s literacy rate is over 80%, only 24% of people are financially literate — far below the global average of 42%. Among millennials, digital natives by label, only 19% are digitally financially literate.

This gap between access and understanding is creating a vulnerable population in an increasingly digital economy.

The digital divide in India isn’t just technological — it’s gendered, generational, and geographic.

“Women in many parts of the country still lack access to mobile devices or internet services.”

Deep-rooted cultural norms, psychological barriers, and a persistent reluctance to engage with financial matters often discourage women from managing their money independently and confidently.

Meanwhile, senior citizens and rural users may own phones but lack awareness of fraud risks or digital payment safety.

Even the educated aren’t safe. Many fall prey to phishing scams and digital frauds, unaware of how to freeze their UPI IDs or report financial crimes.

According to the RBI, bank frauds — particularly via digital channels — have tripled.

Over 63,000 cases involving frauds of ₹1 lakh or more were recorded under digital payments last year.

Digital illiteracy doesn’t just exclude; it leads to misuse. Millions of Jan Dhan accounts remain inoperative. Young consumers, enticed by Buy Now Pay Later (BNPL) schemes and easy credit, risk falling into debt traps. In the microcredit space, lack of awareness about repayment terms has led many into cycles of over-indebtedness.

Bridging the Gap

To address this, a coordinated national strategy is needed — bringing together government, regulators, educators, community leaders, and the private sector.

DFL must be made a part of school and college curricula across all disciplines. Students should learn how to use digital banking tools safely, recognize scams, and understand key financial concepts. It should be treated as essential as math or language — not just an optional module.

“Further, mass awareness campaigns need to be rolled out in local languages through TV, radio, and social media. In rural areas, storytelling, theatre, mobile vans, and public fairs can serve as effective platforms. Interactive kiosks at panchayat offices, markets, and railway stations can help bridge information gaps.”

Local influencers — teachers, Anganwadi workers, SHG leaders, and panchayat heads — should be trained as DFL ambassadors. Gram sabha meetings can be used to share practical advice on identifying fake apps, safe digital practices, and redressal mechanisms.

Senior citizens need dedicated support. Customised workshops using simple guides and visual aids can help them understand and trust digital finance. Banks and post offices should offer helplines and walk-in helpdesks to assist older users.

Similarly, outreach for women must be targeted and culturally sensitive. Women-led financial literacy circles, SHG-based digital training, and awareness sessions through Mahila Mandals and Anganwadis can help build both access and confidence.

DFL for youth and gig workers can leverage gamified mobile learning. Interactive videos, WhatsApp-based modules, and digital quizzes can make learning about finance easy, engaging, and widely accessible.

“Fraud-prevention modules should be a mandatory part of onboarding whenever a person opens a bank account or downloads a payment app. Just like KYC norms, digital hygiene must become routine.”

Also, certified DFL training can be linked to access to credit or government schemes. Incentives like digital cashback or micro-rewards could encourage participation, especially in low-income households.

Finally, a Digital Financial Literacy Index can be developed and published at regular intervals to measure progress, identify gaps, and guide data-driven policymaking. Fintech companies and banks must also contribute through CSR — co-developing content, conducting workshops, and running digital safety drives across geographies.

The Road Ahead

India has laid the groundwork — with UPI, Jan Dhan, Aadhaar, and mobile networks forming the backbone of a robust digital finance system. But infrastructure alone cannot ensure effective inclusion and digital safety. Without DFL, these tools can increase vulnerability to risk, not empowerment.

A digitally enabled society must therefore be a digitally literate one. As we transition toward a cashless, connected economy, digital financial literacy must be seen not as a privilege — but as a non-negotiable life skill towards achieving our goal of Viksit Bharat.

(The writer is the IEPF Chair Professor, NCAER. He was honoured with the “Investor Education and Awareness Award 2024” by SEBI and AMFI for his exceptional contribution in the field of Investor Awareness and Education, given at the IITF, Delhi on 23rd November 2024. He is a former Indian Economic Service officer of the 1986 batch.)

Swipe, tap, exclude: The uneven march towards financial inclusion

Over two-thirds of Indians who use digital devices struggle with basic digital banking transactions, highlighting the persistent challenge of bridging the digital literacy and access gap.

India, amidst rapid technological advancement, stands at a critical juncture in its digital journey. The nation has demonstrably invested in the foundational pillars of digital financial services through significant infrastructure development, progressive policymaking, and public awareness campaigns — epitomised by flagship initiatives like Digital India, Jan Dhan Yojana, and Aadhaar integration. It has undeniably reshaped the financial landscape, particularly during and after the Covid pandemic.

The Department of Financial Services (DFS), Ministry of Finance, hosted the Digital Payments Awards ceremony on June 18, 2025, to recognise the strength of the nation’s digital payments ecosystem. It highlighted that nearly half of all real-time digital transactions in the world are happening in India with 35 crore active users being part of UPI system, and also that the country has an 87 per cent fintech adoption rate compared to 67 per cent globally.

However, this impressive digital façade hides a sobering reality: Over two-thirds of Indians who use digital devices struggle with basic digital banking transactions, highlighting the persistent challenge of bridging the digital literacy and access gap.

According to data from the Government’s Comprehensive Annual Modular Survey (CAMS- 2022-23), only 31.7 per cent of people who use a digital device (mobile phone, computer, laptop, or tablet) are capable of carrying out digital financial activities like online payments. This isn’t just a gap — it’s a gaping blind spot, one that threatens to transform a well-intentioned digital revolution into a tool of exclusion.

The digital skew

Urban India, with its superior access to internet connectivity, banking facilities, and digital literacy programmes, reports a comparatively higher share of digital banking users — 43.48 per cent. However, even this figure highlights that over half of urban residents are still unable to use basic financial tools. The rural statistic is more alarming — nearly three-quarters (75.05 per cent) of the rural population cannot perform digital transactions. For rural India, digital inclusion remains a promise deferred.

Predictably, digital proficiency peaks among the youth. In the 26–35 age group, nearly 44 percent can perform digital transactions. This is the working-age population, which is more likely to have smartphones, jobs with salary accounts, and exposure to digital ecosystems. Conversely, people above 60 show alarmingly low digital engagement.

Children under 15 are understandably out of the financial loop, hence the lower capability. However, the digital exclusion of the elderly — more than 81 per cent are unable to transact digitally — is concerning. Many senior citizens struggle with using digital apps, forget passwords, or fear fraud, leading to a reluctance to adopt online banking.

Perhaps the most troubling disparity revealed by CAMS data is the digital gender gap. While around 40 per cent of men can transact online, only 21 per cent of women can do so — a gap of nearly 20 percentage points. This isn’t merely about access to technology; it reflects entrenched gender inequality in education, employment, asset ownership, and digital autonomy.

In the lowest expenditure quintile (Q1), only 13.56 per cent of rural individuals are able to use online banking for digital payments, compared to 24.53 per cent in urban areas. This nearly twofold gap, though alarming in itself, is only a small piece of the broader disparity. The adoption rate increases steadily with expenditure in both rural and urban areas. However, the rate of growth is notably sharper in urban areas.

By the highest expenditure quintile (Q5), 61.91 per cent of urban individuals are able to use digital banking services — a figure that dwarfs the 37.71 per cent adoption in rural areas. But even in Q5 — where individuals theoretically have better access to smartphones, internet connectivity, and bank accounts — nearly two-thirds of rural residents are still not able to use digital banking.

This may indicate not just infrastructural issues but also a lack of trust, digital literacy, and support systems in rural settings.

Bridging the faultlines

The data paints a worrying picture: India is moving towards a two-speed digital economy —one inhabited by the digitally fluent who can transact, save, invest, and borrow; and the other by the digitally stranded, who remain dependent and are increasingly being left behind. This divide is not due to unwillingness but systemic barriers, which include linguistic exclusion, digital illiteracy, and cultural constraints.

India’s digital revolution must be reimagined to serve every Indian — not just the urban, young, male minority that currently benefits the most. To ensure inclusiveness, targeted interventions are needed. These can include rural digital literacy drives in local languages, special training for the elderly and simplified interfaces, empowering women with direct access to mobile technology and policies to include individuals in banking and tech ecosystems.

The true test of a digital economy lies in who it includes — and who it leaves behind.

Palash Baruah is fellow at National Council of Applied Economic Research (NCAER), New Delhi and D L Wankhar is a retired Government of India officer. Views are personal.

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