There are nine major states in India with strong textile and apparel business for export as well as for the domestic market. These states have few lucrative policies as per the need of the state or industry’s specifications. But Uttar Pradesh (UP), having textile and apparel manufacturing hubs like Noida, Ghaziabad, Kanpur, Varanasi, Lucknow and Agra, has a very interesting ‘One District One Product’ (ODOP) scheme. Around 25 districts of the state have been identified as far as textile and apparel products are concerned. This speaks volumes about how the state and this scheme can be fruitful for the overall textile industry.
The scheme is…
The State Government launched this scheme almost 3 years ago and it has, kind of, given a revival to all the leading hubs of the state focusing on its core strengths. Department of MSME and Export Promotion as well as Commissioner and Director of Industries are instrumental behind this initiative.
For the execution of ODOP, some important actions include preparing database of stakeholders, total production, export, availability of raw material and arranging training; research of possibilities regarding production, development, and marketing of the product; necessary coordination with various schemes of State and Union Government.
The programme aims to encourage more visibility and sale of indigenous and specialised products/crafts of the state generating employment at the district level. It also aims to increase the income and local employment that will result in a decline in migration for employment. The focus is also on improvement in product quality and skill development, transforming the products through packaging and branding.
On the other hand, at the local level, the scheme connects the production with tourism to sell for gifting purpose. At the same time, it will resolve the issues of economic difference and regional imbalance.
One particular product is selected from every district of Uttar Pradesh and individual artisans of production units and associations which are related to the selected products are promoted by lending loan, financial assistance of up to 90 per cent of the project cost of establishing Common Facility Centres (CFC), financial assistance for the participants of national and international fairs/exhibitions for display and sale of their products selected under ODOP programme under Marketing Development Assistance Scheme.
A certain margin of the project cost will be paid to the applicants in the form of subsidy to set up the project under Finance Assistance Scheme (Margin Money Scheme), skilled artisans will be trained through RPL (Recognition of Prior Learning) and will be certified through relevant Sector Skill Councils, while the unskilled artisans will be provided with a 10-day training and an advanced toolkit which will be free of cost under Skill Development Scheme.
The State Government provides loans ranging from Rs. 10 lakh to Rs. 50 lakh, depending on the scheme and project cost. So far, the Government facilitated loans worth Rs. 15,000 crore to the MSME units under its flagship One District One Product scheme over the past 3 years, benefitting more than 3,000 enterprises/self-help groups. Recently, a virtual event was also organised under this scheme in which around 600 sellers from all trades participated.
Industry, specifically in emerging areas or where it doesn’t have much exposure, is especially happy with this initiative, as they believe that entrepreneurs will get loans easily without guarantee under this scheme. At the same time, smaller hubs are getting the attention of administration, Government as well as all stakeholders. For example, Gorakhpur district was recently added for readymade garments under this scheme. SK Agarwal, former Chairman of the Chamber of Industries, believes that it will increase the opportunities for Gorakhpur, as it has potential to grow as an apparel hub, and while the industry is all scattered here, it can grow well with increased focus now.
At the same time, it is also pertinent to mention here that the scheme is also to promote local crafts, artisans and self-help groups (SHG).
Districts identified cover the entire range of textiles
Noida, the biggest apparel manufacturing hub of the state, is recognised as the city of garment, while others are Ambedkar Nagar and Etawah for textile products; Mau for Powerloom, Farrukhabad for block printing; Lucknow for Chikankari and Zari Zardozi; Baghpath and Hapur for Home furnishing; Fatehpur for Bedsheets; Hardoi for Handloom; Rampur for Patchwork; Kushinagar for Banana Fibre products; Bareilly, Budaun, Chandauli, Shahjahanpur, Unnao and Kasganj for Zari Zardozi; Varanasi for Banarasi Silk Sarees; Jaunpur and Sonbhadra for dari and carpets; Mirzapur for carpets and Lalitpur for Zari Silk Sarees.
It is pertinent to mention here that through various collaborations, e-commerce giants like Amazon, Flipkart and eBay are also supporting firms to source products for domestic as well as international markets. Odopmart.com is also active and has sold around 20,000 products so far. NIFT, Rai Bareli and Institute of Packaging are supporting designs and packaging.
Union Government and more State Governments to follow
The Union Ministry of Commerce and Industry is preparing an institutional mechanism to promote the ODOP scheme at the national level to tap the rural economic potential of the country and identify one product per district. It is in the process of putting in place an institutional mechanism to propagate ODOP as a movement in the country with the help of all the State Governments and Union Territories. Similarly, few other states of India are also planning to follow the similar schemes as these connect particular clusters and their strengths well with the market.
Prime Minister Narendra Modi has also praised this initiative, describing it as “An extension of Make in India.” The State Government strongly believes that the scheme is a “great success” as it helped the state increase its exports by around 30 per cent.
On the other hand, the industry has a little different experience and suggests improvements too. “CFC has a condition of getting at least 25 units together which is very difficult. Though the Government is also right in making sure the maximum possible involvement, but in garment manufacturing, it is very difficult to bring 25 companies for CFC,” said Rajeev Bansal, MD, Celestial Knits and Fab, Noida and National Secretary of Indian Industries Association (IIA). Few other exporters and firms associated with domestic markets also added that local administration plays an important role which needs to be more supportive and proactive for timely actions.
UP is targeting to augment MSME exports in the next 3 years to reach the ambitious mark of Rs. 3 trillion, which is currently Rs. 1.20 trillion, and for that, mutual understanding of the industry and the Government is the most important. With the scheme like ODOP, one can expect the state will achieve its target and the apparel industry will also have enough potential to grow in export.