Vibha Sethi
Background
India’s export architecture has historically remained concentrated within prominent industrial clusters and metropolitan port cities, leaving the vast economic potential of its interior districts largely underutilized. To address this structural imbalance and drive grassroots economic formalization, the One District One Product (ODOP) initiative was launched. Originally pioneered as a state-level policy by the Government of Uttar Pradesh in January 2018 (piloted with Moradabad’s iconic brassware cluster), the operational success of the model prompted the Central Government to scale it nationwide under the Department for Promotion of Industry and Internal Trade (DPIIT 2018).
The conceptual foundation of ODOP aligns with the national visions of Aatmanirbhar Bharat and Vocal for Local. By designating, branding, and promoting at least one unique product from each district, the policy converts localized heritage ranging from indigenous handicrafts and textiles to specialized agricultural produce—into scalable commercial assets. Over the years, the ODOP framework has structurally converged with the Department of Commerce’s Districts as Export Hubs (DEH) initiative, transforming India’s 770+ districts from mere administrative zones into self-sustaining units of international export planning.
Key Objectives
- Holistic Socio-Economic Growth: To promote economic and social development across all districts by identifying and scaling up local manufacturing and agricultural capabilities.
- Grassroots Industrialization: To generate sustainable employment, minimize regional disparities, and prevent large-scale migration by boosting rural and local entrepreneurship.
- Export Expansion: To select, brand, and position unique district-specific products in the global market, thereby significantly enhancing India’s overall export volume.
- Heritage Preservation: To protect, revive, and modernize traditional arts, crafts, and heritage industries through modern technology and market access.
Timeline of ODOP
- January 2018: The Government of Uttar Pradesh officially launched the ODOP scheme as a state-level policy, setting Moradabad’s brassware cluster as the initial successful pilot.
- 2020: Recognizing the operational success in UP, the Central Government expanded the vision nationwide under the Ministry of Food Processing Industries (MoFPI) for agro-products.
- August 2023: The DPIIT (Ministry of Commerce and Industry) formally institutionalized the nationwide ODOP initiative, fully merging it with the Districts as Export Hubs (DEH) program to streamline all Indian districts.
Provisions of the Scheme
- Financial Assistance: Provision of credit-linked subsidies, easy loans, and financial aid for technology upgradation to local artisans, micro-enterprises, and farmers.
- Skill Development & Infrastructure: Setting up Common Facility Centres (CFCs), testing labs, and training programs to improve product quality, packaging, and digital literacy.
- Strategic Branding & Marketing: Global market linkage through dedicated e-commerce onboarding (like GeM portal), domestic/international trade fairs, and the establishment of “ODOP Unity Malls” across states.
Functioning
The operational execution of the ODOP framework functions through an integrated, multi-tiered ecosystem that spans identification, capacity building, and market linkage:
- Baseline Identification & Specialization: State governments, in coordination with district administrations, execute comprehensive baseline assessments to map local resource endowments. Products are broadly categorized into four core verticals: Textiles, Agriculture, Food Processing, and Handicrafts.
- Value-Chain Optimization: Under the convergence of schemes like the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME), credit-linked subsidies covering up to 35% of project costs are disbursed to formalize unorganized micro-units.
- Shared Infrastructure Support: The policy finances the development of Common Facility Centres (CFCs). These hubs provide small-scale artisans and farmers with shared access to modern machinery, raw material banks, custom packaging systems, and cold-storage infrastructure.
- Institutional Market Linkages: Supply-side enhancements are balanced with aggressive demand-side interventions. The framework establishes direct digital pipelines via the Government e-Marketplace (GeM) – ODOP Bazaar, utilizes the Open Network for Digital Commerce (ONDC) to bypass traditional intermediaries, and partners with Indian Missions abroad to host virtual buyer-seller meets.
- Current Operational Status: As of 2026, the program has transitioned into a fully digitized, outcome-linked trade matrix. It has scale-integrated over 770 districts nationwide, formally onboarding local artisans onto pan-India e-commerce networks and establishing dedicated “ODOP Unity Malls” (PM Ekta Malls) across states via 50-year interest-free capital loans to institutionalize localized marketplace footprints.
Funding Structure of the Scheme
The financial architecture of the ODOP initiative operates under a Centrally Sponsored Scheme financial convergence framework (primarily driven through anchoring components like PMFME and MoFPI frameworks), utilizing a structured cost-sharing ratio between the Central and State governments:
- General Category States & UTs with Legislature: The financial expenditure is shared in a 60:40 ratio (60% Central Government share and 40% State Government share).
- North-Eastern and Himalayan States: To accommodate fiscal constraints in hilly terrains, funding follows a highly subsidized 90:10 ratio (90% Central share and 10% State share).
- Union Territories (UTs) without Legislature: The operational costs and infrastructure outlays are 100% funded by the Central Government.
- Individual Micro-Unit Subsidies: Entrepreneurs can access a credit-linked capital subsidy of 35% of the eligible project cost (with a maximum statutory ceiling of ₹10 lakh per unit), where the beneficiary contributes a mandatory minimum of 10% and the remaining balance is cleared via institutional bank loans.
Institutional & Administrative Governance
To ensure smooth functioning and inter-departmental convergence, the initiative has operationally merged with the Districts as Export Hubs (DEH) framework, led by a dedicated network of managing authorities:
- Central Level (DPIIT & Invest India): The Department for Promotion of Industry and Internal Trade (DPIIT) acts as the central oversight authority. A dedicated ODOP Facilitation Cell under Invest India handles day-to-day national execution, strategic tie-ups, and monitoring.
- State Level (State Nodal Officers & SEPC): Every State/UT has designated a State Nodal Officer (usually a Director or Commissioner from the Department of Industries/MSME). They lead the State Export Promotion Committee (SEPC) to finalize product lists and align resources.
- District Level (District Nodal Officers & DEPC): At the grassroots level, the District Magistrate (DM) / District Collector acts as the primary administrative head. They chair the District Export Promotion Committee (DEPC) along with a designated District Nodal Officer (General Manager of the District Industries Centre) to execute action plans, resolve local grievances, and support individual micro-enterprises directly.
Performance
Since its national expansion, the footprint of the ODOP initiative has scaled exponentially. As of 2026, the program actively covers more than 770 districts across the country, documenting an official repository of over 1,243 distinct products (DPIIT, 2026).
State-Wise Implementation Realities
This national growth trajectory, however, reflects varied implementation realities on the ground, with performance metrics across different states shifting based on their structural readiness and regional focus:
- Uttar Pradesh (The Anchor State): Having the earliest execution runway since 2018, UP’s MSME-driven export figures experienced a massive structural shift. Total merchandise exports from the state expanded from USD 16.24 billion in 2018-19 to USD 21.68 billion by 2022-23, largely anchored by ODOP items such as Bhadohi carpets, Saharanpur woodcraft, and Aligarh locks (Directorate of Industries UP, 2023).
- Gujarat: Leveraging its robust industrial infrastructure, Gujarat successfully leveraged the ODOP-PMFME framework to sanction credit-linked subsidies to 18,872 micro food processing units and approved 76 specialized ODOP incubation centres to maintain export standardizations (Ministry of Food Processing Industries [MoFPI], 2025).
- Southern States & Peninsular Regions: The southern cluster exhibits a high-value trajectory led by marine processing, spice exports, and Geographical Indication (GI) tagged handlooms. For instance, Kerala has structurally linked its ODOP seafood and plantation products with modern cold-chain infrastructure across coastal districts, boosting processed marine exports. Concurrently, Andhra Pradesh has effectively integrated its specialized agro-clusters like Araku Valley Coffee with global organic trade streams, while Tamil Nadu has leveraged its robust textile network to scale traditional ODOP handloom clusters (such as Kanchipuram silk) into institutionalized e-commerce and international retail pipelines (IMPRI Policy Research, 2025).
- Bihar: The institutional prioritization of regional agricultural crops under ODOP culminated in a landmark policy move in 2025—the establishment of a dedicated Makhana Board. Targeting the Mithilanchal and Seemanchal belts, which produce over 80% of India’s fox nuts, this structural step directly integrates over five lakh local farmers into high-value global snack supply chains (Press Information Bureau [PIB], 2026).
- The Northeast and Himalayan Regions: The policy has unlocked highly specialized niche markets for low-volume, high-value items, such as Meghalaya’s Lakadong turmeric and Mandarin oranges, turning traditional tribal farm holdings into active foreign exchange earners (Department for Promotion of Industry and Internal Trade [DPIIT], 2024).
Impact
The macroeconomic and social impacts of the ODOP-DEH convergence are visible across three primary pillars:
- Economic Formalization and Livelihoods Empirical tracking demonstrates a structural shift in rural employment. Nearly 66% of the production units brought under the ODOP-FME cluster framework are situated in rural geographies, with 80% operating as family-based micro-enterprises. By providing direct capital access via institutional tie-ups (Mudra and Start-Up India), the scheme has facilitated the formal training of over 3.14 lakh grassroots entrepreneurs.
- Macro Export Contributions The program has served as a key catalyst in expanding India’s aggregate export portfolio. Total national exports of goods and services escalated to an all-time high of USD 825.25 billion in FY25, with projections pointing toward USD 863.11 billion in FY26. Traditional micro-clusters have risen to global prominence under this push; for instance, Tiruppur (Tamil Nadu), backed by targeted grassroots initiatives in partnership with Exim Bank, recorded an astonishing ₹46,000 crore in knitwear exports in FY26, setting a structural benchmark to breach ₹1 trillion by 2030.
- Social and Cultural Preservation Beyond fiscal numbers, the programmatic tie-up with Geographical Indication (GI) tags has acted as a shield for India’s traditional intellectual property. Marginalized artisan communities and Women’s Self-Help Groups (SHGs) have gained institutional financial independence by becoming primary equity owners in local export-oriented collectives.
Emerging Issues
Despite its operational successes, a critical evaluation by the IMPRI Impact and Policy Research Institute highlights systemic bottlenecks that restrict the framework from reaching its full potential. The table below outlines the major operational challenges currently limiting the efficiency of the ODOP export model:
Way Forward
To transition the ODOP initiative into a permanent engine for long-term international trade, India must pivot toward a highly institutionalized, outcome-oriented framework:
- Establishment of District Testing Laboratories: The state must invest in setting up decentralized, NABL-accredited quality testing and certification labs within major ODOP production zones to ensure immediate adherence to global export benchmarks.
- Granular Custom Data Integration: The Directorate General of Foreign Trade (DGFT) should mandate unique institutional shipping codes for recognized ODOP items, allowing customs authorities to track district-specific net export values accurately.
- Strengthening PM Ekta Malls: The ongoing central allocation of ₹200 crore per State/UT under the Scheme for Special Assistance to States for Capital Investment for building PM Ekta Malls (Unity Malls) must be accelerated. These malls should act not merely as static retail outlets, but as dynamic B2B international sourcing hubs.
- Leveraging Global Trade Facilitation Agreements: Synergizing ODOP product supply lines with India’s newly signed mega-trade deals, such as the India-UK Free Trade Agreement (FTA), will provide duty-free access to labor-intensive sectors like textiles, gems, and jewelry across key export destinations like Surat, Jaipur, and Ludhiana.
Selected References
Department for Promotion of Industry and Internal Trade. (2026). Strategic frameworks for micro-cluster scaling and year-end performance review. Ministry of Commerce and Industry, Government of India. https://dpiit.gov.in
Directorate General of Foreign Trade. (2025). Districts as Export Hubs (DEH) operational manual: Structural integration guidelines. Ministry of Commerce and Industry, Government of India. https://dgft.gov.in
IMPRI Impact and Policy Research Institute. (2025). One District One Product (ODOP) – 2018: Grassroots economic trends and sub-national trade insights. IMPRI Policy Insights. impriindia.com
Kumar, A. (2024). Decentralized trade architectures and the empowerment of micro-enterprises in India. Journal of Public Policy and Regional Development, 12(3), 145–162. doi.org
Ministry of Food Processing Industries. (2025). Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme: Evaluative dashboard guidelines. Government of India. https://mofpi.gov.in
Ministry of Micro, Small and Medium Enterprises. (2024). Cluster Development Programme (MSE-CDDP) framework adjustments for district hubs. Government of India. https://msme.gov.in
Press Information Bureau. (2026, February 18). Decentralizing India’s export engine: Over 770 districts unified under ODOP-DEH convergence matrix. Ministry of Commerce and Industry. https://pib.gov.in
Uttar Pradesh Directorate of Industries. (2023). Five years of ODOP (2018–2023): Quantitative impact analysis on state merchandise exports. Government of Uttar Pradesh. https://diup.gov.in
About the Contributor
Vibha Sethi is a researcher and policy enthusiast with interests in public policy, governance, international relations, trade frameworks, and strategic studies. Her work focuses on evidence-based policy analysis, geopolitical developments, and emerging global challenges, with particular attention to India’s strategic, economic, and developmental priorities. She is actively engaged in analytical writing, policy research, and academic discussions related to governance, security, and international affairs.
Disclaimer
All views expressed in the article belong solely to the author and not necessarily to the organisation.
Acknowledgement
The author extends sincere gratitude to the IMPRI team for their expert guidance and constructive feedback throughout the process.
Reviewed by Sneha Kohli and Ayana N K
The article was posted by Kaustav Majumdar, a Research and Editorial Intern at IMPRI.
