A background note can be accessed here: Green-Goods Exports Could Support 9.5 Million More Jobs by 2030, but Only 78,000 in South Asia
The ILO model projects substantial employment gains from green-goods export growth, concentrated in economies that already have strong production capabilities. What determines whether India can capture a larger share of the employment opportunities associated with global demand for environmental goods?
For India to capture a larger share of the employment opportunities arising from the expansion of global trade in environmental goods, improving manufacturing productivity and international competitiveness will be critical. This requires a greater emphasis on technological upgrading, supported by increased private-sector investment in research and development (R&D), innovation, and the adoption of advanced manufacturing technologies. Such investments can help Indian firms improve production efficiency, enhance product quality, and compete more effectively in international markets.
However, technological advancement must be complemented by investments in workforce skills. As green manufacturing becomes increasingly technology-intensive, the nature of labour demand will also evolve, requiring workers with specialised technical and vocational capabilities. This calls for closer alignment between industrial requirements and skill-development programmes, including the integration of relevant green manufacturing technologies into the curricula of Industrial Training Institutes (ITIs), stronger industry–academia partnerships, and greater opportunities for industry-led training and apprenticeships.
Importantly, technological advancement and employment generation do not necessarily move in the same direction in the short run. While improvements in productivity may reduce labour requirements per unit of output, they can also enable firms to expand production, access new markets, and generate additional employment. The extent to which India benefits from green-goods trade will therefore depend on its ability to combine technological upgrading with workforce development and sustained export expansion.
The ILO estimates that indirect employment associated with domestic inputs and services accounts for roughly 6 million of the 9.475 million additional jobs projected globally. What determines whether the expansion of India's green-goods exports generates substantial employment among domestic component manufacturers, logistics providers and other suppliers, rather than concentrating gains among final-product exporters?
For the expansion of India's green-goods exports to generate employment among domestic component manufacturers, logistics providers, and other supporting industries, it is important to approach industrial policy through a supply-chain lens, with attention to linkages between final-product manufacturing and domestic suppliers.
An important starting point could be to build capabilities in the assembly of green goods, much like India's experience with smartphone manufacturing. Assembly-led production can provide an initial entry point into global value chains, generate employment opportunities, including for relatively less-skilled workers, and help firms develop manufacturing capabilities. However, the longer-term objective should be to progressively deepen domestic value addition by developing competitive upstream and downstream segments of the supply chain.
This transition would require parallel investments in technology adoption, workforce skilling, and the development of domestic component manufacturers. As domestic supplier capabilities strengthen, the employment benefits of green-goods exports could extend beyond final-product manufacturers to intermediate-goods producers, engineering services, logistics providers, and other supporting industries.
An important policy priority should therefore be the development of integrated green manufacturing clusters, bringing together different stages of production alongside supporting infrastructure. Such clusters could facilitate stronger buyer–supplier linkages, reduce logistics and coordination costs, and provide access to shared facilities such as testing and certification laboratories.
However, the development of domestic supply chains must be guided by international competitiveness. While greater domestic sourcing can strengthen production linkages and generate employment, an inefficient or high-cost domestic supplier base could increase production costs across the value chain, ultimately undermining the export competitiveness of final-product manufacturers. Therefore, the objective should be to develop a competitive domestic supplier ecosystem supported by access to affordable inputs, technology, and efficient logistics.
The ILO model finds that green-trade employment is more likely to be formal than employment across the wider economy, while women's representation in both direct and indirect green-trade jobs remains substantially lower. What factors could prevent women from accessing the formal employment opportunities associated with expanding green-goods exports, even as the sector grows?
The expansion of green manufacturing presents an important opportunity to increase women's participation in formal employment. If India initially enters green global value chains through assembly-led manufacturing, it could create employment opportunities for women, including those with relatively limited technical training. However, as India progressively moves into upstream segments of the supply chain and higher-value manufacturing activities, the nature of employment opportunities is likely to evolve, increasing demand for specialised technical and vocational skills. Without adequate access to skilling, women could face barriers to participating in these higher-value activities.
There are two important pathways through which women's participation in green manufacturing can be strengthened.
First, deliberate efforts are needed to equip women with the technical capabilities required for emerging manufacturing activities. This would involve integrating relevant training into vocational and technical education, improving women's access to apprenticeships, and encouraging industry-led skilling programmes that facilitate their transition into more specialised and higher-value occupations.
Second, as green manufacturing expands and domestic supply chains deepen, employment opportunities will also emerge across a wider ecosystem of supporting industries and services. These include logistics, testing and certification, quality assurance, and other business services. The expansion of these complementary activities could provide additional avenues for women's participation in green value chains, including opportunities beyond direct factory employment.