Harnessing potential of districts as export hubs to boost country’s overall exports

Introduction

Director General of Foreign Trade, Santosh Sarangi on September, 01, 2023 reportedly announced that the government intends to tap the districts for promoting exports of goods/services produced/manufactured in these to enhance overall exports of the country. Stating that districts have a huge potential for increasing the country’s exports, he said, at present only 70 districts out of the 750 districts in the country account for 80 % of total exports of the country.

Sarangi said, India has a huge potential for export of electronic items, white goods, and processed foods, and with the kind of growth rates the country has been experiencing for the last 15 years, she can aspire to become a Middle-Income Economy in the near future. In addition, the series of Free Trade Agreements India has signed, or is in the process of signing, will give greater access to Indian goods to the export markets of these countries, helping raise India’s exports to GDP ratio more than the present 22 %.

Genesis of the idea to set up district export hubs

Prime Minister Narendra Modi had given a call from the ramparts of the Red Fort in his Independence Day Speech in 2019 to convert each district into an export hub making Districts active stakeholders in the promotion of exports of goods/services produced/manufactured in these.

Following this, the Department of Commerce had launched the DEH initiative in 2019, under which the Government of India is collaborating with the State governments to harness the potential of districts to transform them into Export Hubs.

Approach to involve districts

Each district in India can be characterised as an exclusive source of distinct and distinguished products, that remains untapped. If the potential of each District is tapped fully, it can fuel economic growth, generate employment, boost rural entrepreneurship & enhance exports, helping the country to achieve the goal of Self-reliance, it is opined.

Earlier, Export Promotion as a subject was dealt by the Central Government only, without any active, credible mechanism, involving the State or the District level Stakeholders into the decision-making process to promote goods and services produced at the grassroots level.

To boost local production, and the need to make Districts active Stakeholders in driving export growth of local products/services therefore necessitated Decentralising the Export Promotion Activity to help fill the existing gaps and bottlenecks in exporting identified products/services from these.

Further, under the new Foreign Trade Policy which came into effect from April 01, 2023, government plans to aid homegrown businesses by taking forward the Districts as Export Hubs uplifting the export value of districts across the country.

The objectives the scheme wants to achieve:

1. Provide export opportunities to MSMEs, farmers and small industries in the overseas markets, with a focus on District led Export Growth for Self- reliance;
2. Attract investment in the district to boost manufacturing and exports and provide ecosystem for Innovation/ use of Technology at District level to make the exporters competitive;
3. Help reduce transaction cost for the exporters at various stages of export cycle and generate employment in the district;
4. Provide platforms for global reach to products and services from the district through E-commerce and Digital marketing.

Institutional mechanism in districts

1. District Export Promotion Committees are constituted in each District & all key officers related to agriculture, horticulture, livestock, fisheries, handicrafts, handlooms and industry in the district, and the Lead Bank Manager along with key Export Promotion Councils, Quality and Technical Standards Bodies, Government of India departments like MSME, Heavy Industry, Revenue and Textiles become a part of the DEPC;
2. The initial meetings in the identified Districts are conducted by the DGFT Regional Authorities in collaboration with the District and State Authorities;

DEPC will focus on the specific actions required to support local exporters / manufacturers in producing exportable products in adequate quantity and with the requisite quality, and reaching potential buyers outside India.

The primary function of the DEPC is to prepare and act on District Specific Export Action Plans in collaboration with all the relevant stakeholders from the Centre, State, and the Districts.

Decentralising export promotion

The Department of Commerce through Directorate General of Foreign Trade is working with the State / UT Governments in a phased manner to achieve the objective of increasing production, exports & generating economic activity to achieve the goal of Self-reliant India.

In this process:

1. In the initial phase, products/services with export potential in each District are identified and Institutional Mechanism in the form of State Export Promotion Committees at the state level and District Export Promotion Committees at the district level are created to provide support for export promotion to address the bottlenecks for export growth in the districts;
2. Specific action plans to increase exports are finalised by the DEPCs in each District through District Specific Export Action Plans while State Export strategy/policy and State Agricultural Plans are finalised by the States/UTs at their levels;
3. The District wise export data is now being generated by the ICEGATE (Indian Customs Electronic Gateway)/DGCIS (Directorate General of Commercial Intelligence & Statistics) to track the export performance from each District.

Progress made up to January, 2023

1. State Export Promotion Committees have been constituted in all the 36 States/UTs
2. District Export Promotion Committees have been constituted in all the 36 States/UTs.
3. Products/Services with export potential have been identified in all 733 Districts across the country, including Agricultural & Toy clusters and GI products in these Districts.

Epilogue

Coordinated and synergised effort towards trade and export promotion by the Central Government, State Governments and the District administration would enhance manufacturing activities, promote goods and services exports, support MSMEs and local artisans/craftsmen, broaden coverage of e-commerce linkages with Districts, promote GI products, improve logistics, agricultural sectors and increase employment opportunities in the districts. This is bound to lead to accrual of wide-ranging economic benefits, including investment, manufacturing & the overall export growth of the country.

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