Trade deals should not damage domestic industries on either side, says World Bank President Ajay Banga

An emerging economy like India is a key component in trade deals and the agreements should be signed in such a manner that domestic industries on either side are not damaged, cautioned World Bank Group president Ajay Banga here while commenting on the Free Trade Agreement (FTA) signed between India and European Union.

During his visit to the Central Tool Room and Training Centre (CTTC) in Bhubaneswar on Thursday (January 29, 2026), Mr. Banga said: “I think all trade deals are important. The way trade has changed over the last few years, in the last 20 years, global trade has quadrupled. But the share of the emerging markets has also doubled from 20% to 40%. So, emerging markets like India are now a key component in trade.”

“Regional and bilateral deals, in the last 20 years, about 100 were signed. But if you look at it now, they are doubling the number you are signing regional and bilateral. And the India-EU trade deal is an example of that. So, I think lowering both tariff and non-tariff barriers on both sides will benefit both sets of people,” he remarked.

“And I think that (India-EU FTA) is a very good idea. You have got to do it in a way that you do not damage domestic industries on either side,” Mr. Banga said.

On the issue of tariffs leading to a new world order, the World Bank President advised countries not to think much on the issue of tariff. “In [India’s] deal with the European Union, there is hardly any conversation about tariff. This should be seen as opportunity,” Mr. Banga pointed out.

‘Domestic economy a big strength’

“In the Indian economy, export constitutes some percentage, but domestic consumption and capital formation is a big strength. In some other countries, export is much higher percentage. So, tariff should be seen through opportunity perspectives,” he reiterated.

On the Economic Survey’s projection that the country can grow by 6.8% to 7.2% in financial year 2026-27, the World Bank President said: “Absolutely. I think India has demonstrated that it can show exceptional growth. The real thing is not the percentage of growth. The real thing you need to think about is if you want to be Viksit Bharat by 2047, the country needs to upscale skilling of youths.”

“The amount of infrastructure investment that has happened in India in the last 10 years is actually quite admirable. Today, you land in Bhubaneswar, you see a modern airport, 280 airports [across India], tens of thousands of kilometres of roads every year. It is due to sheer work,” he said.

“Skilling our population in India is going to be very important. You have 12 million young people becoming ready for a job every year. If you skill them the right way, then you can get them the opportunity to work in a State, in a city, in a village, in another town and in countries overseas,” the World Bank chief explained.

Speaking about CTTC, Odisha chief secretary Anu Garg said: “I am so glad that we are seeing this very wonderful facility which has been here for so many years and almost 36,000 children are getting trained here on an annual basis. And many of them, in fact 100% almost, are getting jobs not just within our country, not just within our State, but also in Japan and many other countries.”