India stands to benefit more from women's economic inclusion than any other nation in the world, and its government recognizes this potential. Recently, the Indian government has introduced economic reforms that explicitly take gender into account, from how women allocate their time to how they access markets and financial assets. For example, the government enacted an expansive worker protection program — the Mahatma Gandhi National Rural Employment Guarantee Act — that requires equal wages for men and women and includes provisions for childcare at work sites. In addition, in March 2017 India enacted a federal law mandating that all employers offer twenty-six weeks of paid maternity leave.

India has also led the way with savings and credit association groups, known as self-help groups (SHGs), which manage and lend accumulated savings to their members. SHGs exist across the country and consist of groups of women lending to one another. With more than eight million groups across India, the government is now using SHGs as a delivery channel for government services aimed at women. These efforts could be bolstered by initiatives to help women transition from working in the informal economy to leading small- and medium-sized businesses, which have been shown to fuel economic growth.

India has also taken steps to advance women's financial inclusion through its Aadhaar program, the largest digital national identification initiative undertaken anywhere in the world. More than 99 percent of adults are now covered by Aadhaar, which relies on fingerprints and iris scans to create a national identity database. Women can open bank accounts using Aadhaar's biometric information that tells financial institutions who they are. Thus, India has created a digital identification technique that has coincided with the digitalization of banking and makes last-mile banking possible, especially for women: a biometric method of identification makes it almost impossible for men to unilaterally access money in their wives' bank accounts and potentially spend it on non-household items.

Despite these efforts, however, an overwhelming — and growing — majority of Indian women work outside the formal economy and therefore fall outside government protection. Current estimates place India's rate of female participation in the formal labor force at only 30 percent — among the lowest across developing nations — a rate that has actually declined over the past decade across education levels and in both urban and rural areas. The majority of Indian women instead work in the informal sector in jobs with limited social protections and low wages. The concentration of women in the informal sector is not driven by legal barriers, as India has relatively few laws that impede women's economic participation and Indian women have equal rights to obtain jobs, sign contracts, and open bank accounts. Instead, according to the International Labor Organization (ILO), cultural barriers and occupational segregation play important roles in limiting women's economic potential, as women in India tend to be grouped into industries and occupations that have not seen employment or wage growth in recent years.

Current estimates place India's rate of female participation in the formal labor force at only 30 percent — among the lowest across developing nations.

Because women's informal labor in markets, service jobs, garment work, and handicraft manufacturing is not captured by official definitions of economic productivity, national analyses value women's contributions to the country's GDP at only 17 percent. Women's work should be better counted, and women should also be given more opportunities to contribute to the formal economy. In fact, the Indian economy would grow by an additional 27 percent by 2025, adding $2.9 trillion, if women were represented in the formal economy at the same rate as men.

India needs more policies that support women workers and promote investment in services and skills training for informal laborers that would add value to their activities. Women affiliated with, among others, BASIX (a livelihood promotion institution), the Self Employed Women's Association, and Ujjivan (a financial services provider to the economically active poor) cite persistent cultural barriers and stigma about women's work as barriers to economic participation. They also advocate for further government efforts to train women, including those presently working in the informal economy, for industries and occupations that are experiencing growth. Private sector companies and nongovernmental organizations, such as Walmart and the IKEA Foundation, attempt to fill many of these gaps for their employees by providing women with skills training and access to savings and credit, health care, and childcare, among other services. Yet the reach of such programs is limited, and, as ILO findings confirm, market rigidity prevents many women in the informal sector from transitioning into the formal economy.