India Boosts Export Growth with District and MSME Initiatives

The Union government has stepped up efforts to anchor India’s export growth in districts and micro, small and medium enterprises (MSMEs), by strengthening schemes that identify local strengths, build export capacity at the grassroots, and link small producers with global markets. Recent measures span the District as Export Hub framework, the One District One Product (ODOP) initiative, and a new Export Promotion Mission that consolidates support for MSME-led exports into a single, outcome-focused platform.

Districts positioned as core export growth engines

The Centre’s approach to district-led exports is built around the District as Export Hub (DEH) initiative of the Directorate General of Foreign Trade (DGFT), designed to systematically map export potential in each district and establish institutional mechanisms to support that potential.[2] Under DEH, products and services with export prospects are identified for every district in consultation with state and Union Territory governments and other stakeholders.[2] This exercise is intended to move export planning closer to the local economy, rather than treating exports purely as a national or state-level function.

As part of this framework, State Export Promotion Committees (SEPCs) and District Export Promotion Committees (DEPCs) have been set up across States and Union Territories.[2] These committees are tasked with coordinating export promotion activities, resolving local bottlenecks, and aligning district-level plans with broader policy support and trade facilitation measures. The institutionalisation of SEPCs and DEPCs aims to provide a standing platform where district administration, industry representatives, banks, logistics providers, and export promotion agencies can work together on specific targets and interventions.

The DEH model is closely linked with efforts to improve logistics, standards compliance and marketing for local products. District authorities are being encouraged to incorporate export goals into district development plans, including steps to improve common facilities, testing and certification support, awareness of export schemes, and access to digital platforms. This approach seeks to translate broad national export strategies into practical measures that can be implemented at the block and district levels.

ODOP and district product mapping expanded

The ODOP initiative, coordinated nationally by the Department for Promotion of Industry and Internal Trade (DPIIT), has emerged as a complementary pillar to DEH by generating a structured inventory of distinctive products from each district and linking them to targeted promotion efforts.[2] As of August 2025, a consolidated list of unique products identified district-wise from States under ODOP has been prepared, covering a wide range of agri-produce, processed food, handloom, handicrafts, industrial goods, and services.[2]

The Centre has reported that several concrete steps have been undertaken for the promotion and export of ODOP products.[2] These include:

• Facilitating participation of ODOP producers in domestic exhibitions to expand visibility and market linkages.[2]
• Regular capacity-building programmes in collaboration with specialised agencies to improve product quality, packaging, branding, and compliance with export standards.[2]
• Dedicated e-commerce onboarding drives for the Government e-Marketplace (GeM) and ODOP Bazaar, which showcases and stocks ODOP products on a digital platform.[2]
• Engagement with Indian Missions abroad to promote ODOP products in overseas markets, including through virtual buyer-seller meets and participation in international exhibitions.[2]

The ODOP branding has also been used in major diplomatic and multilateral events. Various ODOP items were included as part of official gifting during G20 meetings hosted in India, which the government has described as a way to popularise these products internationally and highlight district-level craftsmanship and agro-diversity.[2] This has effectively converted multilateral diplomacy events into platforms for soft promotion of district products.

These interventions are designed to ensure that once a district’s flagship products are identified under ODOP and DEH, there is a structured pipeline of market access, promotion and capacity support that allows small producers to participate more effectively in export markets.

Export Promotion Mission introduces unified support for MSMEs

At the macro-policy level, the Department of Commerce has launched the Export Promotion Mission (EPM), described in the Year End Review as a landmark initiative to boost India’s export competitiveness while consolidating multiple existing schemes into a coherent framework.[1] The Mission is anchored in a collaborative structure involving the Department of Commerce, the Ministry of MSME, the Ministry of Finance and other key stakeholders such as financial institutions, export promotion councils, commodity boards, industry associations and state governments.[1]

According to the Department of Commerce, EPM represents a shift from fragmented scheme-based interventions to a single, outcome-driven and adaptive mechanism that can respond swiftly to global trade challenges and evolving exporter requirements.[1] The Mission carries a total outlay of Rs 25,060 crore for the period from FY 2025–26 to FY 2030–31, providing a medium-term funding horizon for export promotion activities.[1]

EPM operates through two integrated sub-schemes and consolidates key export support instruments such as the Interest Equalisation Scheme (IES) and the Market Access Initiative (MAI), aligning them with current trade priorities and sectoral needs.[1] While detailed operational guidelines are being refined, the overarching design envisages:

• Greater flexibility in allocating support to sectors and products showing strong global demand or strategic importance.
• Expanded focus on technology adoption, digital tools, and data-driven targeting to support exporters, especially MSMEs.
• Closer linkage between export credit support and market access activities so that smaller firms can both finance production and access overseas buyers.

The Mission’s emphasis on collaboration with the Ministry of MSME and state governments is aimed at ensuring that national-level support instruments effectively reach smaller units across districts, including those that are not part of traditional export clusters.

Export growth backdrop and rationale for district focus

The strengthening of district-level and MSME-led export programmes is taking place against a backdrop of record export performance. India’s total exports of merchandise and services reached an all-time high of US$ 825.25 billion in 2024–25, registering 6.05 per cent annual growth.[1] Merchandise exports remained steady at US$ 437.70 billion, while non-petroleum exports increased to US$ 374.32 billion, marking a 6.07 per cent rise.[1]

The positive trend has continued into FY 2025–26. During April–September 2025, total exports climbed to US$ 418.91 billion, a 5.86 per cent increase over the same period in the previous year, with merchandise exports at US$ 219.88 billion, up 2.90 per cent.[1] The Department of Commerce has noted that this represents the highest ever export performance for the first half of a financial year, despite ongoing global uncertainties.[1]

Key export drivers in the first half of FY 2025–26 included electronic goods, engineering goods, drugs and pharmaceuticals, marine products and rice, which all recorded double-digit or high single-digit growth during April–September 2025 compared with the previous year.[1] Several major destinations such as the United States, United Arab Emirates, China, Spain and Hong Kong registered robust growth in imports from India over this period.[1]

Within this context, the government has argued that long-term export resilience requires a broader and deeper base of exporters, with districts and MSMEs playing a central role. District-focused initiatives and MSME-centric policy instruments are therefore being positioned as structural reforms intended to diversify the export basket, expand the geographical spread of exporters and embed export capability in local economies, rather than relying only on large firms or a small set of metropolitan clusters.

Strengthening MSME participation in export schemes

MSMEs are an explicit focus within the Export Promotion Mission and related measures, given their role in employment and their presence across nearly all districts. The Ministry of Commerce and Industry’s Year End Review notes that EPM is being structured as a collaborative platform with the Ministry of MSME and financial institutions to address critical gaps that smaller exporters face.[1] These typically include limited access to affordable credit, limited information on foreign markets, and challenges in meeting standards and certification requirements.

Consolidation of schemes such as IES and MAI under the EPM umbrella is expected to make it easier for MSMEs to understand and access available support. Interest subvention under IES can help reduce borrowing costs for export credit, particularly for MSME manufacturers, while MAI-type assistance can be used to support participation in trade fairs, buyer-seller meets, market studies and brand-building activities. Integration under one Mission is intended to streamline application processes, improve monitoring of outcomes and allow faster adjustments where uptake by smaller firms is low.

MSME-owned units engaged in ODOP products are also expected to benefit from coordinated district-level planning. When DEPCs and SEPCs map export potential for particular products, they can link local MSMEs to central and state schemes for technology upgradation, testing facilities, design improvement, packaging and branding. This could make it easier for micro and small units to participate in export supply chains, either directly or as part of vendor networks serving larger exporters.

Use of digital platforms and e-commerce channels

The Centre has emphasised digital tools and platforms as important channels for scaling up district exports. Under the ODOP initiative, e-commerce onboarding drives for GeM and the ODOP Bazaar are being utilised to bring small producers onto structured online marketplaces that can serve both domestic institutional buyers and, over time, export demand.[2] The ODOP Bazaar is positioned as a showcase of curated products that have already been recognised for their uniqueness and quality under the ODOP framework.[2]

Digital participation has multiple administrative and commercial benefits. It allows district officials, export promotion bodies and MSME departments to track seller performance, identify capacity gaps and design targeted training or support. It also gives producers exposure to requirements relating to inventory management, order fulfilment, packaging and customer feedback, which are essential for entering formal export channels. For the government, these platforms provide data that can feed into the EPM’s objective of being flexible and data-driven.

Role of Indian Missions and international outreach

Promotion of district products is not confined to domestic markets. The Centre has involved Indian Missions abroad in the international projection of ODOP and DEH-identified products.[2] Missions have been engaged to support virtual buyer-seller meets, promote participation in international exhibitions and identify niche markets where specific district products may find sustained demand.[2] This decentralised outreach draws on local knowledge of overseas markets to tailor promotional efforts.

Government communications underline that the inclusion of ODOP items in official gifting during India’s G20 Presidency was part of a broader strategy to highlight local products to global stakeholders and visiting delegations.[2] That experience is now feeding into a more structured practice where Missions are briefed on priority district products and encouraged to incorporate them into curated showcases, trade promotion events and cultural programmes.

Institutional coordination between Centre and States

District-level export promotion depends heavily on cooperation between the Union government and the States, given that many enabling factors such as local infrastructure, land, power, labour, and regulatory clearances fall under state or local jurisdiction. The SEPC–DEPC framework under DEH is the primary channel for this coordination.[2] These committees typically include representatives from state industries and commerce departments, MSME departments, export promotion councils, banks and district administrations.

The Export Promotion Mission’s collaborative design, with representation from state governments, export promotion councils and commodity boards, is intended to reinforce this cooperative model at the national level.[1] It provides a platform to communicate district-level priorities upwards into national scheme design, while also disseminating central policy changes and scheme features down to the district level. Such bidirectional flows of information are intended to make export promotion more responsive to practical issues faced by small producers and exporters.

In parallel, the DPITT-led ODOP initiative has been working with state governments to integrate ODOP priorities into state industrial and MSME policies. The identification of district products under ODOP has, in several cases, been used by states to design local clusters, common facility centres or branding campaigns. The Centre’s role is to aggregate and support these efforts through national-level promotion, digital platforms and linkages to export-oriented schemes.

Potential administrative and economic impacts

From an administrative standpoint, the cluster of measures being implemented is likely to alter how export promotion is organised and monitored. The shift towards district-level planning and committee-based coordination may require district administrations to assume expanded responsibilities in areas such as trade facilitation, market access and awareness-building on export procedures. Training for district officials and alignment with state-level export policies will be important to make these structures effective.

The consolidation of export schemes under the Export Promotion Mission is expected to simplify scheme administration by reducing duplication, standardising monitoring indicators and using digital platforms to track disbursements and outcomes.[1] A single umbrella framework could also facilitate more comprehensive evaluation, including the ability to measure how much support is reaching MSMEs and which districts are benefiting. This may inform future decisions about reallocating resources or introducing targeted interventions where gaps persist.

Economically, a stronger district and MSME focus has the potential to broaden the base of export participation. If district products are able to access consistent quality improvement, branding and market linkages, local producers may move from informal or purely domestic markets into more formalised export pathways. This could contribute to job creation, income diversification for rural and semi-urban households, and resilience against local demand fluctuations.

For MSMEs, more integrated support across finance, market access and capacity-building could reduce entry barriers to export markets. Interest support, training, digital onboarding and access to trade promotion activities can collectively lower transaction costs for first-time exporters. Additionally, when local anchor products receive recognition under ODOP and DEH, ancillary units in packaging, logistics and services may also benefit from increased demand.

Alignment with broader trade and industrial strategy

The strengthened district and MSME export initiatives operate alongside a wider set of trade and industrial measures, such as production-linked incentive (PLI) schemes, free trade agreements and sector-specific export promotion strategies that were highlighted in various Year End Reviews.[1][3][5] While those measures often target medium and large-scale manufacturing or high-technology sectors, DEH, ODOP and EPM are structured to ensure that smaller producers and non-metropolitan regions are not left outside the export ecosystem.

According to the Department of Commerce, the EPM is aligned with the national vision of building a modern, technology-driven and globally competitive economy by 2047, with exports as a central pillar of that trajectory.[1] The district- and MSME-oriented reforms are intended to ensure that the benefits of this export push extend beyond major hubs and integrate a wider spectrum of enterprises and regions.

Official articulation of objectives

Government communications on these measures consistently underline the twin priorities of strengthening grassroots production ecosystems and improving export competitiveness. While formal speeches and detailed operational guidelines continue to evolve, the core objectives can be summarised in three broad directions:

1. Identification and nurturing of district strengths through DEH and ODOP, supported by targeted capacity-building, logistics facilitation and branding.
2. Consolidation and modernisation of export support instruments under the Export Promotion Mission, with explicit attention to MSME participation and digital transformation.[1]
3. Closer collaboration between central ministries, state governments, export promotion bodies and Indian Missions abroad to align domestic production capabilities with overseas demand.[1][2]

The overall policy stance, as reflected in recent Year End Reviews, indicates that district-level and MSME-led exports are now embedded as important components of India’s medium-term trade strategy, supported by dedicated institutional mechanisms and significant budgetary commitments.[1][2]