With exports facing global headwinds, the Union Budget is likely to announce a ₹2,500 crore scheme to develop 50 districts as export hubs. The programme will help domestic producers in these districts to scale up manufacturing and find potential buyers outside India.
Under the proposed scheme, the government will select 50 districts through a challenge, and they will receive ₹50 crore each. The districts will be assessed on parameters such as plans for exports, efforts to plug infrastructure and logistics gaps, and cluster approach to exports.
As it will be a centrally sponsored scheme, the Directorate General of Foreign Trade (DGFT) has proposed that the Centre pays 60% of the estimated cost, with the rest borne by the respective states.
This means that the Centre will likely allocate ₹1,500 crore for the programme.
“District as Exports Hub will likely be a centrally sponsored scheme and may come up in the budget… if not before. These districts will be selected under the challenge route, and scores will be assigned based on parameters related to their preparedness…we will invite applications, and they will be evaluated,” said a senior government official.
The Centre will receive applications from the states, and evaluation and scoring will be done by a technical advisory agency.
Only those districts having a robust plan will make it to the list. “The idea is to support districts that have done robust planning to develop export competitiveness,” said the official.
Ajay Sahai, director-general and CEO of the Federation of Indian Export Organizations (FIEO), said that ‘District as an Export Hub’ will be a game changer for exports.
“Districts are the production centres, and focussing on them to address supply-side challenges will go a long way in boosting and felicitating exports. It’s a more granular approach of moving from states to districts, which will reap huge dividends,” Sahai said.
The scheme was initially proposed as a ₹10,000 crore scheme, covering 200 districts.
After the department of commerce prepares a cabinet note for the ‘districts as export hubs’ plan, it will be taken for Cabinet approval.
The DGFT initially proposed the scheme for 200 districts, but the department of expenditure recommended doing it in phases and mapping the actual impact first.
This comes as the government is looking at ways to boost exports amid declining global demand. Exports growth slowed to a 19-month low in September at 4.8%.
The department of commerce has also been implementing the Trade Infrastructure for Export Scheme since FY17-18 with the objective of assisting central and state government agencies in the creation of appropriate infrastructure for the growth of exports.