After the economic liberalisation of 1991, India has tried various means to promote its exports. Foremost of them was SEZ, but it did not bear fruits on expected lines. It’s true that global headwinds were not in its favour, but then again, the success rate of services exports from SEZs tell us a totally different story. A giant push in manufacturing was needed. ODOP is going to remove that shortening.
ODOP doing wonders to exports
In its latest research report named Eco wrap, State Bank of India (SBI) has heaped praises for India’s burgeoning exports. According to the report, India will easily surpass the export figure of $420 billion in the Financial Year 2021-22. Soumya Ghosh, Group Chief Economic Advisor, SBI explicitly hails One District One Product (ODOP) for exponential rise in exports. In fact, the improvement has been astronomic to say the least. Some states quadrupled their exports compared to pre-pandemic levels.
State wise breakdown of the number suggests that Ease of Doing Business ranking of states is directly proportional to increase in the percentage increase of their exports. Gujarat leads the chart with $126.8 billion worth of exports, a significant jump of 366 per cent over FY19 figures. Similarly, Maharashtra and Tamil Nadu registered spikes of 218 per cent and 192 per cent respectively. Both states exported products worth $73.1 billion and $35.17 billion respectively.
Underdeveloped states also benefited from it
Not only already established hubs of business, even erstwhile defamed states like UP and Bihar (part of BIMARU) also registered a steep increase in their export revenues. It is pertinent to note that ODOP is actually a brainchild of the UP government and fittingly it leads the chart in this category. Compared to exports worth Rs 58,000 crore in FY 2017-18, Yogi government exported products worth Rs 96,000 crores in FY 2021-22.
Crediting the assimilation of “Districts as export hubs” under ODOP, Ecowrap report said, “With the introduction of ODOP-DEH in FY20, exports have seen a tremendous increase in nearly all states. Exports of Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Sikkim, Telangana, Uttar Pradesh and West Bengal have increased more than thrice since the introduction of ODOP-DEH initiative,”
The Mechanism of ODOP and its integration under exports promotion
ODOP was first launched by the Yogi government in January of 2018. The idea was later adopted by the Ministry of Food Processing Industries in that year itself. It is a centrally sponsored Scheme with the Central government bearing 60 per cent of the total cost while state governments bearing 40 per cent of total costs. The initiative is operationally merged with the ‘Districts as Exports Hub’ initiative by the Directorate General of Foreign Trade (DGFT), Department of Commerce.
Under the scheme, expertise of each district of all states and Union territories have been taken on board. The quality of traditional products is being increased and brought on par with the demands in the international market. This is being done through creating facilities of processing, sorting, grading, quality testing and packaging infrastructure in one locked geography.
To make this process more decentralised and seamless, State Export Promotion Committee (SPEC) and District Export Promotion Committee (DEPC) have also been constituted. Both these agencies are constantly in touch with industrial bodies in their respective states and districts. They are becoming a key enabler of availability of cheap labour and adequate land to establish factories.
Innovative promotional ideas
On their part, the respective governments are also finding innovative ways to promote these products in the international market. For instance, in Uttar Pradesh, the number of foreign tourists has increased in the last few years. They are coming to the state to look at the revival of Sanatani traditions and Ram Rajya.
Varanasi is not the only religious site for foreign tourists. Today, Ayodhaya, Mathura and other places are also gathering limelight. It is here that the Yogi government decided to push the ODOP by making Railway stations as promotional hubs of ODOP. Even PM Modi himself used the high-profile G7 stage to promote ODOP this year.
Up until now, development has been phenomenal. ODOP is one of the reasons why India’s MSMEs were able to save itself from the onslaught of slump in demand due to Covid. Now, the next target should be taking the percentage of Manufacturing sector’s contribution to India’s GDP to over 30 per cent. At the end of the day, it is manufacturing which will create more jobs in a country with a humongous population like us.
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