Dr Arpita Mukherjee, Professor at ICRIER, asserts that if multiple schemes are aligned with the One District One Product (ODOP) scheme, the benefits are likely to be more. For example, more products can be under GI through this scheme.
IBT: What is your take on the One District One Product scheme? What benefits is it likely to usher in for the Indian economy?
Dr Arpita Mukherjee: The One District One Product (ODOP) scheme has been conceptualized to meet multiple purposes. First, it showcases a key product of the district and wants to create a district as an export hub. Second, it can lead to more efficient sourcing of inputs, creation of marketing facilities and value chain development. Third, it can help in growth and employment creation at the district level and also lead to entrepreneurship development, if rightly implemented. Fourth, it is aligned with the objectives of Atmanirbhar Bharat.
Fifth, this scheme also aims to address the export bottlenecks. The export bottlenecks can be due to domestic barriers or curbs in export markets (like high tariffs). It can help to develop export value chain and reduce logistics costs. It can also help small and medium enterprises (SMEs) of a district to export as a part of a cluster/group. Thus, it can help address some of the domestic barriers to exports.
IBT: How have different states/districts performed under the ODOP scheme? Can you please share with us in brief about any successful case study in this regard?
Dr Arpita Mukherjee: It is too early to comment on the performance of the states and districts, especially under the current COVID-19 phase. According to the Ministry of Commerce and Industry Press Note dated February 3, 2021, the Director General of Foreign Trade (DGFT) has been engaged with the states and union territories to create districts as export hubs. In the initial phase of the ODOP programme, 106 products have been identified from 103 districts across 27 states. The Ministry of Food Processing Industries (MoFPI) has also mapped the food products of different districts of states and union territories. Some states, like Uttar Pradesh, have also created websites for ODOP. Hence, in most cases products are being mapped and the scheme is at the initial stage of implementation. We can discuss a successful case study once the scheme is implemented at least for a year.
IBT: In your opinion, what are the key gaps in the ODOP ecosystem and how can they be filled to achieve better results under this scheme?
Dr Arpita Mukherjee: The scheme is yet to be implemented fully and hence we cannot discuss the gap. I am more interested to know and am still trying to find out how this scheme can be aligned with other schemes and policies for better results. For example, according to the Press Note dated 23 March 2021 of the Ministry of Agriculture and Farmers Welfare, the MoFP under Centrally Sponsored Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PM FME Scheme), provides financial, technical and business support for upgradation of existing micro food processing enterprises. That scheme adopts ODOP approach to reap the benefits of economies of scale in procurement and marketing. How is the PM FME scheme aligned with the ODOP? If multiple schemes are pruned down and aligned with ODOP the benefits are likely to be more.
If certain benefits like increased access to common facilities like laboratories, incubators, storages, are provided at a district level it is expected to be beneficial. Our SMEs also need training on quality standards and requirements of export markets. Such training can be provided at the district level.
There can be more marketing and brand building initiatives. Foreign clients can be encouraged to visit the districts and see the infrastructure and other facilities. Some districts can have organic clusters/hub for food products from which exports supply chain can be established.
There are so many traditional handicrafts and workmanship in India, which is getting extinct due to the fund shortages and difficulty in accessing markets. This scheme may help them. Last but not the least, showcasing the product of the district can be clubbed with tourism, especially eco-tourism in, for example, some of the backward and tribal belts. Many products in India are GI tagged. More products can be under GI through this scheme.
IBT: What challenges did the pandemic create in the effective implementation of the scheme last year? How did you overcome them? Is the situation different this time around?
Dr Arpita Mukherjee: Till March 2021, ODOP was in the initial phase and district-wise products were being mapped. I have not heard of any major challenges in mapping products except that some districts may have more than one product which are famous. For example, MOFPI has a different product mapping for districts of UP than UP government mapping of ODOP. May be more than one product per district can be considered by two different government departments.
A detailed study will be required to understand alignment between the central government identification of OPOD and state identification and how both can be promoted. There is need for more details on how this scheme can be aligned with other schemes and what is likely to be the budget per district and how activities will be prioritized according to the need of each district.
There is also a need to develop a streamlined model that provides clarity on value chain, overlapping products, logistics, certification, marketing, incentives and managing demand and supply.
Pandemic has led to a couple of challenges, not only last year but even now. First, states and Central government have to now focus on healthcare, and in saving lives. Second, healthcare cost will account for a significant proportion of government spending. So, budgets must be prioritised and allocated to the need of this hour.
The level of development and fund requirements vary across districts. Funding can be a major issue in the current scenario where industry is suffering due to the pandemic related lockdowns, health issues of employees, lower purchasing power in the country, prioritization of budget of citizens of the country towards food and healthcare needs, etc.
Data shows that in some states the pandemic is much more severe this time than the first wave, leading to significant loss of lives and livelihood. States are now focusing on creating healthcare infrastructure and on saving lives. Once they can handle the current situation and a round of vaccination is over, then only focus will be on schemes like ODOP.
IBT: According to reports, e-commerce platforms like Amazon and eBay are being roped in to encourage MSMEs to be online under the ODOP. How is that shaping up so far? What difficulties is the government facing in terms of enhancing the online presence of these products & how are they being resolved?
Dr Arpita Mukherjee: It is a good idea to rope in e-commerce platforms as during the pandemic both domestic and international e-commerce has increased and online purchases across the globe is likely to continue. I am not aware of any difficulties that government may be facing. I do believe that government should not try to enhance online presence themselves or create websites. Government’s role is more of a facilitator through the right policy and regulation. The Foreign Trade Policy is yet to be implemented and so I cannot comment on what is in for the e-commerce companies in that policy to support SMEs integration in global value chains.
IBT: What can be done to ensure that the beneficiaries of the ODOP scheme produce products of world class quality? What is/can be done to promote the exports of these goods?
Dr Arpita Mukherjee: With the pandemic, work-from-home models and significantly reduced social gatherings, the demand for certain products have decreased and others have increased. So, product category selection needs to be based on demand. To promote exports, we then need to focus on quality standards and export market requirements and how we can meet those requirements. Many developing countries are able to meet in-country requirements of importing countries and I am sure that India can also do so. Second, training and capacity building is needed for our exports at the ground level. Third, there is need for research to understand the requirement. Fourth, there should be some district level pilot studies to identify the issues and requirements and based on that intervention should be designed to help product products that can be exported. Fifth, from marketing perspective some model districts can be developed which can be showcased to foreign clients. These can be linked to eco-tourism can well.
Dr Arpita Mukherjee is a Professor at ICRIER. She has several years of experience in policy-oriented research, working closely with the Government of India and policymakers in the EU, US, ASEAN and in East Asian countries. She has conducted studies for international organizations such as ADB, ADBI, ASEAN Secretariat, FCO (UK), Italian Trade Commission, Konrad-Adenauer Stiftung (KAS), OECD, Taipei Economic and Cultural Centre (TECC), UNCTAD and the WTO and Indian industry associations such as NASSCOM, FICCI, IBA, IDSA and EICI. Her research is a key contributor to India’s negotiating strategies in the WTO and bilateral agreements. The views expressed here are her own.
