Infrastructure bottlenecks, lack of regulatory coherence and the need for standardisation and quality management are the major bottlenecks before India’s plans to enhance its trade ecosystem from the grassroots level and unlock its immense export potential, says a recent report from Delhi-based think-tank Global Trade Observer (GTO). The report comes against the backdrop of the central government’s strong thrust to promote local products through its One District One Product scheme.

The “Strengthening trade and livelihoods: India’s grassroots imperative” report says that a grassroots-focused approach is of at most importance for India as it will develop MSMEs’ capacity and competitiveness and promote and improve the market access of rural products in international markets. However, the report notes that India needs to improve its ranking on several fronts. It points out India is in 43rd position in customs ranking, 48th in infrastructure, 38th in international shipment, 39th in logistics competence, 37th in tracking and tracing and 50th in timeliness. “One of the major obstacles to strengthening India’s manufacturing capacity and encouraging higher development for creating jobs is poor infrastructure. The government’s inability to address the infrastructure deficit, which costs India between 4% and 5% of GDP growth, hinders business investment and growth,” the report says.

The GTO report states availability of reliable power grids, testing labs, skilling centres, common facility centres, special economic zones and export-oriented units, efficient packaging, and quick and cost-effective transport of the finished product from the district to the importing market are some crucial bottlenecks when it comes to infrastructure for exports.

It calls for the decentralisation of trade and wants to identify issues each district faces and incorporate them into the District Export Action Plans (DEAPs). The report also recommends policy convergence with respect to schemes, stakeholders and public-private partnerships. The report wants the alignment of key stakeholders at all levels of government, the private sector as well as financial institutions.

“A starting point towards leveraging this policy convergence is through mapping and identification of major stakeholders at all levels – union, state and district levels of government, local, national and international market players, and financial institutions – as well as the existing policy landscape to identify key intervention areas. This will help charter unique modes of public-private partnerships that can be mobilised for grassroots export promotion,” the report states.

It also adds that a grassroots-focused policy holds great promise to anchor national-level schemes like the Trade Infrastructure for Export Scheme, National Logistics Policy, PM GATI Shakti, Interest Equalisation Scheme, and Skill India Initiative to build a resilient export ecosystem that is inclusive of all stakeholders.

infrastructure deficit

Reliable power grids, labs, skill centres, facility centres vital for district-level exports