India's labour productivity is lowest among G20 nations: NITI Aayog vice chairman Suman Bery

India needs to diversify into high value sectors, leverage global knowledge, innovate locally, reform markets, build skills and improve its labour productivity to become Viksit Bharat by 2047, NITI Aayog vice chairman Suman Bery said.

Speaking at the Annual Business Summit 2025 of the Confederation of Indian Industry ( CII) on Thursday, Bery also called for diversifying sources of supply so that India is not dependent on a particular supplier and integration of its medium enterprise sector with the global value chain to boost manufacturing.

According to Bery, India’s labour productivity is the lowest among the G20 nations and a sustained rise in productivity of labour is crucial for India to leverage its demographic dividend.

“India’s track record has not been bad in terms of growth productivity, but it needs to get better. Our problem is our low level of labour productivity, not only with respect to the US but also with respect to some of our peers, such as China and other peers in ASEAN,” he said.

“About 44% of our population is still in agriculture. We need to move labour from agriculture into high value services or manufacturing. This will lead to an increase in productivity in agriculture and will also result in an increase in the productivity of the labor force that moves to manufacturing and services,” said.

“This transition has been slower in India than certain of our peers, and it is certainly something that Niti is working on,” he said, adding that the government is aware of the real challenge of raising labour productivity, both in manufacturing and services.

“Rising labor productivity leading to faster growth in real incomes. The fact that that has not been happening as fast as people’s aspirations is what is leading to, as it were, the skewing for government jobs,”he said, urging the private sector to create better jobs.

Reiterating that the global economy is in turbulent times, Bery said India has maintained an average growth rate of 6.5% for 30 years, suggesting that the roots of resilience in India are as much in our institutions as they are in our policies. “Deep institutional sources of resilience are in place, but we mustn’t be complacent, because we need to up our game for all kinds of reasons,” he said.

Talking about the role of states in India’s resilient economic growth, Bery said the central government can create the conditions through negotiation of free trade agreements (FTAs), or the negotiation of bilateral investment treaties and the review of quality control orders. “But ultimately, it is up to states to harness these opportunities,” he said.