One District One Product Scheme

Last Updated at: Feb 03, 2021
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One District One Product Scheme

One District One Product Scheme – Here’s How It Benefits Small Businesses and Entrepreneurs 

As part of India’s new export policy for 2020 to 2025, there is renewed focus on Make in India and the promotion of export-oriented units. In this context, Uttar Pradesh became the first to implement this scheme, while several other states have followed suit. In this post, we delineate the practical impact of this scheme. We also assess what small businesses, entrepreneurs, and firms stand to gain from it. 

The objective of the One District One Product concept is to convert each district of the country into an export hub. This would promote not just exports, but also manufacturing and services industry in the district. It would also lead to greater employment in the district for the state and local population. 

One District One Product – product categories

  • Unlike the name of the scheme, there is no stipulated restriction on using only one product from one district. Thus, two or more products having economic importance in the district can be included under the One District One Product Scheme. 
  • Some of the products already included under various state’s One District One Product scheme are spices, herbs, vegetables, fruits, fabrics, weaving, painting, farming products, jewellery, handloom leather, toy making, ready-made garments, Khadi products. 

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District export promotion committees set up

The district export promotion committee would be responsible for preparing and acting on the district-specific export action plan. 

This committee would be headed by The district collector, district magistrate, district development officer and co-chaired by the designated regional authority of the Directorate General of Foreign Trade DGFT.

This would also coordinate with various government-sponsored councils and organisations for export facilitation.  

Advantages of the One District One Product concept

  • Identifying products that would enable greater exports of a district
  • Addressing bottlenecks such as regulatory approvals, tax compliance, licences, and other hurdles in manufacturing and exporting the products. This has already commenced in some states by way of a ‘Green Card’ – which is a single-window approval facility.  
  • Supporting local entrepreneurs, exporters, manufacturers in scaling up their manufacturing
  • Assisting in finding potential buyers outside the state as well as outside India
  • Preserve, develop, and promote local arts, crafts, and traditional skills of communities
  • The transparent and competitive bidding process for stakeholders in deciding the One District One Product policy
  • A margin money subsidy scheme float by the Uttar Pradesh government for promoting self-employment among workers. The units covered under the scheme would be given a subsidy of ₹20 lakhs per unit.  This would also help in resolving marketing and branding issues. 
  • The government, through its outreach facility, would also collaborate with e-commerce companies such as Amazon, Flipkart, and eBay. This would enable greater access of products in India and abroad. 

One District One Product – advantages to entrepreneurs

  • The advantages would also accrue to business owners by way of access to institutions such as the Quality Council of India (QCI), Indian Institute of Packaging (IIP), National Institute of Fashion Technology (NIFT), National Institute of Design (NID). This would improve packaging, design, quality, and other structural issues of the products. 
  • A common facility centre will be for helping entrepreneurs in finding appropriate design labs, testing, and research facilities as well as upgrades in the production setup of the business.
  • The state-specific district committees would also help businesses in accessing finance from local banks, schemes of the state, as well as export schemes of the government of India.
  • Skill development – the scheme would provide mentorship to businesses across the entire value chain – right from the workers to top-level management. 
  • Research and development support for developing intellectual property – this would enable entrepreneurs to easily access filing for various kinds of intellectual property such as – trademark certification and patent process. 
  • Industrial clusters being for these products would also lower manufacturing costs for all the enterprises locate within the cluster. 

Financial assistance and other monetary perks for small businesses

  • In many states, the state government is providing financial assistance for up to 90% of the project cost. This would help reduce the risks faced by entrepreneurs in accessing debt finance. 
  • Access to certification – one of the issues Indian businesses face with respect to exporting to Europe and the United States is lack of credible certifications. This holds especially true for agricultural and food products. The coverage of a product under the One District One Product scheme would ensure greater access to appropriate international certifications. Certificates such as the Conformity European (CE), China Compulsory Certificates (CCC) would be focused on. 
  • The One District One Product scheme would also facilitate raising equity from institutions such as SIDBI – Small Industries Development Bank of India, as well as NSE and BSE for larger firms.
  • Faster movement of goods will ensure by way of easier limits on export transporting.  Such as a concession in freight by rail, liberal load-carrying limits of trucks, and synchronisation with the transport department. A subsidy in air cargo charges will also provide specific products under the One District One Product scheme.