Creating An Effective GI Ecosystem
India’s global brand recall and attributes of multi-cultural ethos, authenticity, and ethnic diversity are potential turbochargers for the country’s economy. One channel through which these attributes are brought out are Geographical Indications or GI tags. Today, with the emphasis on climate change and sustainability, these products can be ready revenue generators. A modern distribution system exists in India’s robust global e-commerce backbone and a newly-released domestic drone policy, which will propel the nascent GI industry onto the national and world stage. Amazon’s local to global programme has taken Indian producers and their products such as Delta Leather Corporation’s leather and SVA Organics’ organic products to 18 global markets in over 200 countries, increasing demand and company size by as much as 300 times. In the two years ending March 2021, Amazon exported such Made in India goods worth $2 billion.
Governments need to support GI products, a system over which the Europeans have unmatched mastery. This can be seen across a spectrum of products ranging from Brie cheese to sparkling wine from Champagne. Even in China, their Ministry of Commerce has accelerated the growth of rural online retail sales by almost 20 per cent annually. Nationally, online retail sales of agricultural products in China hit $94.4 billion in 2020.
A 2017 UNCTAD report on inclusive growth and e-commerce deems China’s e-commerce-driven growth as inclusive. That means China has successfully empowered micro, small and medium enterprises to compete with large companies on the same stage, with no geographic boundaries. This has increased China-EU agricultural trade volumes by 16 per cent to $19.4 billion in the first few months of 2021 alone. Likewise, despite a globally depressed market for wines, the produce from the Ningxia region of China saw exports surge 46.4 per cent in 2020, benefitting 211 wineries in Ningxia.
The output value of GI producers in China totalled $92.771 billion as of 2020. It will automatically resolve the three fraught India issues of poor pay for talent, low female participation in the labour force, and urban migration. Second, the labour-intensive nature of GI offers the best solution to boosting the employment-to-population ratio in India, an abysmal 43 per cent compared with the 55 per cent global average. Monetising artisanal work done at home will increase India’s low female labour force participation rate, which at 21 per cent in 2019 was half the 47 per cent global average.
The hyper-localised nature of GI offers solutions to reverse urban migration and conserve India’s ancient crafts, culture and food. A rejuvenation of MSMEs, which account for 31 per cent of India’s GDP and 45 per cent of exports, will follow. Another revenue-earner, GI tourism, is typically a by-product of a strong GI ecosystem. Because GI businesses are micro, it is necessary to address the challenges of capacity-building, formal or easy access to credit, forming marketing linkages, research and development, product innovation and competitiveness in both domestic and international markets.
With the shift to digital platforms, the distribution margins of these gate keepers or mandi agents must be competitive so they do not act as countervailing agents by getting into similar businesses or product lines which will erode GI producer incomes. Pulling it together will be local GI cooperative bodies or associations which can be nationally managed by a GI board under the auspices of the Department for the Promotion of Industry and Internal Trade , the Ministry of Commerce department which should be tasked with developing this new sector. Finally, a required skill for GI producers is digital literacy. The Indian GI economy can be a platform for India to showcase to the world a model for ethical capitalism, social entrepreneurship, de-urbanisation, and bringing women to the workforce, on the back of a robust digital system.
