February 2, 2023 12:31 am

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Fifty Districts To Be developed As Hubs For Boosting Export Promotion

DEH aims to create a mechanism that facilitates exports of identified products and services from the concerned district as part of "One District One Product" programme

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Moving ahead of the ambitious One District One Product (ODOP) programme, the Government of India is now preparing to launch the ‘District as Export Hubs’ (DEH) programme in 50 districts of India for export promotion.

‘One District One Product’ itself was an ambitious project of the Hon’ble Prime Minister of India Narendra Modi – to convert each district into an export hub. The announcement for it was made by him in his Independence Day Speech in 2019.

The central government is likely to announce a new Foreign Trade Policy (FTP) on September 29, which will cover the DEH programme. The new FTP is due for the last two years. The validity of the earlier trade policy expired in 2020 but due to Covid situations, the new policy could not be announced. It is noteworthy that foreign trade today constitutes 45% of India’s GDP.

Developing the districts of different states as DEHs will increase the participation of all states in the economy. At present, there are more than a dozen such states in the country, which contribute only one per cent or less to the total commodity exports of the country. The expansion of the DEH programme will benefit districts with a very low share of exports and would also increase employment.

Currently, states like Karnataka, Tamil Nadu, Gujarat and Maharashtra together contribute to more than 60 per cent of the country’s exports. According to sources, in the 1st phase of the DEH programme likely to be announced on 29th September, 50 districts of the country would be named where the programme is to be implemented and will be developed as Export Hubs.

Sources have revealed that the Directorate General of Foreign Trade (DGFT) had proposed to the Ministry of Finance to develop 200 districts of the country as DEH, but at present, financial arrangements have been reached for 50 districts. Fundings for DEH have been agreed upon on a 60:40 partnership between state and central governments. Developing a DEH requires an aggregate sum of 50 crore rupees, out of which 35 crore (60%) is to be borne by the Centre and 15 crores by the state government.

To make the districts part of DEH, mainly export-related infrastructure is to be developed there. This includes facilities like logistics facilities, e-commerce, marketing, branding, training programme, skill development, commodity testing facility, research and development and technology upgradation and export promotion or outreach activities.

If the DEH program is successful in 50 districts, it will be expanded to other districts as proposed by DGFT and The Department-Related Parliamentary Standing Committee on Commerce.

Key Points to Note

  • Rs 50 crore will be spent on each district to promote exports
  • Rs 35 crore will be spent by the central and Rs 15 crore by the state government.
  • After the success of the first phase, 150 more districts will be made export hubs in phases

DEH requires the consent of the states

According to sources, the selection of districts to form DEH is the state government’s call, so it is necessary to agree with the states. Also, financial support from the state government is required for this project, so its agreement becomes even more crucial.

The Ministry of Commerce and Industry will soon be presenting the DEH programme proposal to the cabinet committee. The DEH programme will be implemented after approval from the cabinet.

Source: PBNS

Speculations are rife that in the first phase, districts with high export potential can be selected. Under the ODOP programme already in implementation, products of all the districts of the country have been identified which keep a very high potential for export.

Problems that may arise and solution

The government has recently launched the National Logistics Programme and is now coming up with a DEH program and a New Foreign Trade Policy. Meanwhile, to counter Logistics linked challenges, the government is launching ‘E-Logs’ to bring all Logistics related problems to a single portal.

At present, the issues related to logistics have to be reported to various concerned departments. A senior official of the Department for Promotion of Industry and Internal Trade (DPIIT) said that under the new logistics policy, “an e-logs portal has been created, which has 70 associations related to logistics services onboard.”

The ‘e-logs’ portal’s dashboard will show the number of problems encountered in the period and the status of the action taken.

India is on right track to raising $100 billion in FDI

While talks of the new Foreign Trade Policy are underway and the National Logistics Policy has already been announced, the Ministry of Commerce and Industry on Saturday said that India is on the right track to raising foreign direct investment (FDI) of $100 billion in the current financial year. It is noteworthy that in the financial year 2021-22, India got the highest ever FDI of $ 83.6 billion.

In its statement, the Ministry of Finance said that in the last fiscal, India was a hotspot for Foreign Investments. More than 100 countries made investments in 57 key sectors of the country, with investment spreading across 31 States and Union Territories.

The Commerce Ministry further said that the government has adopted a liberal and transparent policy to attract foreign investment.

Way Forward

The Directorate General of Foreign Trade is working towards the development of a portal named “Developing Districts as Export Hubs”, to be launched along with the DEH project to monitor the progress under the scheme. A database is to be built containing all the details of the exporters from each district and will be provided to the Indian Mission in various countries for better monitoring and access to the market and potential buyers.

Assistance to the state government to prepare an annual “Export Ranking Index ” based on the export of that particular year gives a better idea of the competitiveness and to know what all products are faring better in the market.

Several economic reforms and steps towards ease of doing business have been taken in recent years by the government and this will help bring FDI to India in the current financial year to support initiatives like Atma Nirbhar Bharat, Vocal for local and Make in India.

Suman Shekhar
Suman Shekhar
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