
Empowering districts: India's grassroots trade revolution

Summary
- Among states, Gujarat alone accounts for one-third of overall exports, followed by Maharashtra with 16% share.
A core component of the new foreign trade policy announced last month is the focus on districts as export hubs. The aim is to promote exports at the district level and develop a so-called ‘grassroots trade ecosystem’. Thus, states and districts have been asked to earmark products with export potential—realized or unrealized—and enable their expansion. The objective is also to broaden the source base of India’s exports, which are currently lopsided.
Among states, Gujarat alone accounts for one-third of overall exports, followed by Maharashtra with 16% share. Both are among the most industrialized states in India. The Centre first mooted a focus on districts to promote exports in 2019. Noting that export promotion was previously entirely the Centre’s domain, the Directorate General of Foreign Trade said: “…export promotion activity had to be decentralized to boost local production and make districts active stakeholders in driving export growth of local products/services."

At the district level, exports are even more concentrated. The top 15 districts (out of 733) accounted for close to 50% of total goods exports of ₹29.7 trillion for the 10-month period from April 2022 to January 2023. The biggest exporting district, by a big margin, was Jamnagar in Gujarat, with a 16% share. Reliance Industries has its oil refinery in Jamnagar. With oil prices rising sharply over the past year, Jamnagar’s share of exports has risen by 4 percentage points since 2021-22. Even adjusting for Jamnagar, Gujarat is still one of the biggest exporters, though it then becomes comparable to Maharashtra.
Sectoral Plays
WITHIN THE 21 broad sector categories (called ‘sections’), the extent to which exports are dispersed across the country can vary sharply. At one end is animals and animal products, where West Godavari in Andhra Pradesh is the top-exporting district with a share of only 7.6% in all-India exports in the sector. At the other extreme is Delhi, which accounts for almost all exports of arts and antiques from India.

Other sectors where production is more widely dispersed, with the top-exporting district having an export share of less than 15%, are prepared foods and beverages (led by Kachchh in Gujarat), wood pulp and paper (Morbi, Gujarat), chemicals and chemical products (Bharuch, Gujarat) and vegetable products (Karnal, Haryana).There are nine sectors where the share of the top-exporting district exceeds 35%. This includes the two sectors that lead India’s exports, namely mineral products (Jamnagar, Gujarat) and pearls and precious metals (Surat, Gujarat).
Export Clusters
THROUGH THE district-level export data, it is also possible to identify export clusters, where a single district accounts for a bulk of exports within 91 narrower product groups. There are only 24 product groups where the share of the top district was less than 25% in 2022-23 (April 2022 to January 2023). There are six product groups where a single district accounted for 100% of exports in 2022-23: clocks and watches (South District, Sikkim), cocoa (Darrang, Assam), furskins and artificial fur (Farrukhabad, Uttar Pradesh), musical instruments (Barpeta, Assam), umbrellas (Kalahandi, Odisha), and arts and antiques (New Delhi, Delhi).

A 2021 report by the Institute for Competitiveness and the Niti Aayog had noted that “only 24 states had a valid export promotion policy. However, not all states have a district export action plan". Recent policy moves nudge states to form a district export promotion committee to examine each district’s export performance, potential and roadblocks.
Regional Shifts
WHILE CERTAIN districts and states dominate some sectors, like oil refineries and precious metals, there are also shifts. A case in point is copper products. In 2021-22, Bharuch in Gujarat accounted for 66% of the sector’s exports of about ₹8,000 crore. In 2022-23 (till January), the sector registered exports of ₹2,300 crore and nothing from Bharuch. Districts that gained share were as wide apart as Thiruvallur in Tamil Nadu, Moradabad in Uttar Pradesh, and Dadra and Nagar Haveli.

Similarly, in tanning, dyeing and pigments, the centre of exports within Gujarat range from Vadodara and Valsad to Ahmedabad. A formal district lens and reporting structures can nurture new possibilities. While it’s still early days for this district focus, the years ahead will shed light on its ability to enable districts to unlock and maintain export performance.