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Kurukshetra Magazine(August 2022): Export Potential Of Rural Industries

Export Potential Of Rural Industries: Introduction


  • The VSI sector contributes to about half of India’s export earnings despite getting only an insignificant share of the plan allocations.
  • About 48% of the exports are from the MSME sector which is largely related to the village industry.
  • India’s agriculture policy and related initiatives facilitate the path to a “farmer-oriented strategy” in the attainment of food security and to become the leading agro-based exporter in the world.


Export Potential Of Rural Industries: Importance Of  Rural Industries


The significance of rural industrialization can be attributed due to the following factors:

i) They can slow down urban migration and thereby ease the problems of urbanization.
ii) They lead to improvement in environment by reducing the concentration of industrial units in big cities.
iii) They can increase rural income and generate nonfarm employment to the farmers.
iv) They can reduce both skilled and unskilled unemployment.
v) They can promote balanced industrialization by avoiding excessive industrial concentration.
vi) They are based on the local needs and can better meet the local consumption needs.


Export Potential Of Rural Industries: Why should we focus on harnessing the export potential of rural industries?


  • The export potential of rural industries needs to be harnessed as it contributes to foreign exchange earnings, and also helps in correcting deficits in the balance of payments.
  • Rural industries help moderate foreign exchange rate fluctuation and help in higher foreign exchange reserves.
  • This eventually will help in achieving the twin goals of the USD 5 trillion economies and Atma Nirbhar Bharat.
  • Shifting the focus of rural industries towards export will open up the scope for new ideas, innovations, diversity, and sustainable business models in rural areas.


Export Potential Of Rural Industries: Key Industries


Khadi Industries

  • The main items exported under khadi are ready-made garments, textile-based handicrafts, charkha, silk and muslin.
  • Other products such as hand-made paper, leather, honey, papad, pickle, jam, jelly and also herbal products like henna, herbal shampoo, and face scrub are also a part of this export basket.
  • Key export destinations include: the US, Japan, UK, Canada and Middle East nations.
  • Various challenges: high competition, high transaction cost, lack of awareness, marketing and promotional issues.

Handicraft Industries

  • Handicrafts constitute an important segment of the decentralised/unorganised sector of our economy.
  • Handicrafts have big potential as they hold the key to sustaining not only the existing set of millions of artisans, but also for an increasingly large number of new entrants in the crafts activity.
  • The handicraft sector is contributing substantially towards employment generation and exports
  • Various challenges: unorganised nature of the industry, lack of education, capital, poor exposure to new technologies, absence of market intelligence.

Handloom Industries

  • The handloom sector is one of the largest unorganised economic activities and is an integral part of the rural and semi-rural livelihood.
  • Handloom weaving constitutes one of the richest and most vibrant aspects of the Indian cultural heritage, and provides direct and indirect employment to about 35 lakh weavers and allied workers.
  • The sector has the advantage of being less capital intensive, eco-friendly, has the flexibility of small production, openness to innovations and adaptability to market requirements, requires minimal use of power, and has great export potential.

Coir Industry

  • Coir industry is a rural-based agro-industry which has great potential for export.
  • States like Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and Odisha have a large potential in coconut products including coir.
  • The immense opportunities in this industry need to be leveraged to avail of the benefits and hence the role and importance of this industry are very critical.


Export Potential Of Rural Industries: Conclusion


Rooting a revival in a skill that only India possesses, and a highly differentiated product that no other in the world has is the way forward. Khadi also has a deeper meaning-of being produced locally, by locals, for locals. But the time may have come for production of khadi for a wider global audience. An idea that could find resonance in the younger generation, especially among the millennials.

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