ODOP-DEH scheme ushered in 4X jump in exports since FY20
Under ODOP-DEH, products/services with export potential have been identified in 733 districts across the country including agricultural and toy clusters and GI products in these districts
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India's merchandise exports touched a record $420 billion in FY22. In FY23, exports have so far recorded $229 billion in H1 FY23 and at this rate, India's exports are on par to overtake $420 billion in current fiscal.
Various factors such as exports of finished or intermediate goods, push fromProduction Linked Incentives (PLI) scheme, and multi-year high commodity and food prices are contributing to this export growth. For example, government of India's consistent and concerted endeavours to usher in reforms for boosting agricultural exports have been highly fruitful and currently showing results. India's agricultural exports rose remarkably despite Covid-19 and crossed the $50 billion mark in FY22. Efforts are being made to expand India's agri-export basket and promote export of products unique to India.
The present foreign trade policy which came into force on April 1, 2015, was for five years and has been further extended by six months up to March 31, 2023. Implementation of new foreign trade policy has been deferred due to prevailing volatile global economic and geo-political situation. It is expected that new foreign trade policy, will provide the rates and conditions of the WTO compliant RoDTEP scheme, launched on January 1, 2020 replacing MEIS. It is also expected that new FTP will add new chapters/sections on easy credit access, R&D services exports, e-commerce exports, infrastructure upgradation and digitisation through district export hub scheme.
Government of India is implementing the Trade Infrastructure for Export Scheme (TIES) since FY18 with the objective of assisting central and state government agencies in the creation of infrastructure for growth of exports. Government of India is on the right path for targeting massive export growth with the launch of new logistics policy and One District One Product – District Export Hub (ODOP-DEH) initiative, says an internal economic research of SBI.
New logistics policy aims at reducing logistics cost in India, improve the logistics performance index ranking to be among top 25 countries by 2030, and create data driven decision support mechanism. As compared to disbursement of only around 200 crore in 17 States under TEIS scheme for trade infrastructure projects during March 2019 to July 2022, ODOP-DEH looks more promising with the massive expected injection of funds for selected districts in phase one for strategic interventions for boosting exports.
ODOP-DEH is a transformational step towards realizing the true potential of a district, fuelling economic growth, generating employment and rural entrepreneurship, aimed at fostering balanced regional development across all districts of the country enabling holistic socio-economic growth across all regions, enabling MSMEs, farmers and small industries to get benefit of export opportunities in the overseas markets. Interventions under ODOP-DEH are proposed in the form of institutional and strategic measures. Under ODOP-DEH, products/services with export potential have been identified in 733 districts across the country including agricultural and toy clusters and GI products in these districts. Toy manufacturing clusters have been identified in 12 districts.
Soumya Kanti Ghosh, SBI group's chief economic advisor, says, "With the introduction of ODOP-DEH in FY20, exports have seen 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. These states include all top 10 States with export preparedness except Tamil Nadu whose export increased more than twice." However, so far, services identified for export promotion are not large and only pertain to tourism, IT/ITES. Indian economy is service based and around 55 per cent of GDP coming from service sector, services exports may be given more prominent place under ODOP-DEH. Focus of ODOP-DEH on GI products is good however it can also focus more on capitalizing on raw materials and intermediate goods for integrating in global value chains. India should capitalize on the 'China+1' strategy, along with avoiding of protectionism and corrections of inverted duty structures for boosting export competitiveness of India. Furthermore, progress result of district level export indicators has to be published on monthly/quarterly basis in comparison with baseline data of September 2020.
