District Export Hubs to boost MSMEs in Tier 2-3 cities: Expert

New Delhi, Apr 4 (KNN) The concept of developing each district as an export Hub, in the Foreign Trade Policy of 2023, is an innovative approach to enhance the export base of India.

This may also empower the MSMEs located in Tier 2 or Tier 3 cities to supply to global market, Debashis Bandyopadhyay, retired industrial advisor to Government of India (GoI) told KNN India.

The policy framework mentions about constituting of District Export Promotion Committees (DEPC) in each district with the District Collector / Deputy Commissioner/ Magistrate as the Chairperson.

It is proposed to include representatives of all central and state departments concerned as members with the Regional Authority of Director General of Foreign Trade providing overall supervision.

Significantly, composition of the proposed Committee is officials heavy and just one representative is proposed of the district level Industry Associations.

The tasks specified for the DEPCs is to prepare an export action plan for each district, identifying products for growth in export, find the gaps in their export enhancement and indicate action to be taken by the authorities concerned to close these gaps, under the various existing schemes of the different Ministries. 

The implementation of the action plan will be closely monitored both at district and DGFT level.

“It must be said that while the announcement of the scheme by the Minister of Commerce caused a lot of expectations among the aspiring MSMEs, the layout of the programme does not cause much enthusiasm,” he added.

By allotting implementation of the programme to Government departments without additional resources, makes the DEPC another district level committee with routine implementation approach. Not involving the non- Governmental industry bodies further limits its dynamics.

Bandyopadhyay further said that the concept of District Export Hubs must have emanated from repeated insistence by the MSME bodies on the need for capacity building of small enterprises, to put India’s export growth to a higher trajectory.

A minuscule section of the vast MSME sector contribute 40 per cent to  our export; what will be the growth if even only 2 per cent start exporting, exhorted a Parliamentary Standing Committee sometime back. 

And it is really an area which need attention of the Government when traditional export markets are stagnating.

However to launch the district level MSMEs in the global market, an out of box thinking is required, he said.

“Infrastructure, finance, ease of doing business; all are crucial for export, but some MSMEs are doing in spite of these bottlenecks. Why not to replicate their perseverance in other MSMEs, along with addressing the structural issues?” he argued.

Citing an expert who opined recently for bringing global aggregators in India to develop local as well as global supply chains.

“Like the PLI scheme, some inducement should be offered to these global aggregators to export what’s ‘Made in India’. It may be mentioned that spectacular successes in exports in our vicinity, in Bangladesh, in Vietnam, were caused by such global aggregators who were provided a facilitating environment by the Governments concerned,” he added.

Government may also consider involving multilateral agencies like World Bank, Asian Development Bank etc. in the District Export Hub initiatives, he suggested.

He said that they can bring in global expertise in kickstarting export of non- traditional products and to non- traditional markets.

Speaking about the RAMP programme he has called for a synergy of the Export Hubs with the RAMP, under which at least one District be launched as model export hub.  (KNN Bureau)