States' exports jump 3 times with One District One Product scheme: SBI

Exports of 16 states have trebled since the introduction of One District One Product – Districts as Export Hub (ODOP-DEH) initiative by the government, according to a report by SBI Research.

These states include Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Sikkim, Telangana, Uttar Pradesh and West Bengal.

Among these states, Gujarat led the exports tally in the financial year 2021-22 with $126,805 million exports compared with $27159 million in FY19. Maharashtra took the second spot with $73,120 million exports in FY22 as against $22,986 million in FY19.

This comes at a time when India's merchandise exports touched a record $420 billion in FY22. In FY23, exports have so far recorded $229 billion in the first half of FY23 and at this rate, India’s exports are on course to overtake $420 billion in the current fiscal, says the report.

Various factors such as exports of finished or intermediate goods, push from Production Linked Incentives scheme, and multi-year high commodity and food prices are contributing to this export growth, it adds.

States with export infrastructure and export preparedness are capturing the momentum provided by the ODOP-DEH initiative, says SBI Research.

Services exports should be given a more prominent place under ODOP-DEH, the report says. "So far, services identified for export promotion are very few and only pertain to Tourism, IT/ITES. Indian Economy is service based and around 55% of GDP coming from service sector," it says.

Focus of ODOP-DEH on GI products is good, however, it can additionally focus more on capitalising on raw materials and intermediate goods for integrating in global value chains, the report further says.

"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. 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," says Soumya Kanti Ghosh, group chief economic adviser, State Bank of India.

Under ODOP-DEH, products and 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.

Interventions under ODOP-DEH are proposed in the form of institutional and strategic measures. Institutional interventions are in the form of involving all district machinery in preparation of the export action plan with measurable targets in comparison with the baseline scenario. Strategic interventions include infrastructure and logistics support, e-commerce, marketing, branding, skill development, training, testing facilities, research and development among others.