Trade and Commerce of Uttar Pradesh - 1 | Course for UPPSC Preparation - UPPSC (UP) PDF Download

Introduction

Uttar Pradesh, home to around 22 crore people, constituting 16.7% of India's population, enjoys a robust demographic dividend, a vibrant culture of handicrafts, technical prowess, entrepreneurial zeal, and a youthful workforce. The state significantly contributes to India's exports of handicrafts, processed meat, carpets, and leather goods.

Trade & Commerce

• Trade involves the exchange of goods and services, mainly focusing on buying and selling, while commerce is a broader concept encompassing activities such as transportation, finance, and logistics in addition to trade. Trade's primary function is the transfer of products, while commerce involves financial management, legal compliance, and support services. While trade primarily aims for profit, commerce has multifaceted goals, including profit generation, risk management, and market expansion. Essentially, trade is a subset of the broader concept of commerce, facilitating the intricate exchange of goods and services in modern economies.

Trade
Uttar Pradesh stands as a major hub for trade, exporting a diverse range of goods, including agricultural products, textiles, chemicals, and pharmaceuticals. The state also imports various items, including machinery, electronics, and petroleum products.
Top exports from UP

• Agricultural products: wheat, rice, sugarcane, fruits, vegetables, and dairy products
• Textiles: cotton, wool, and silk
• Chemicals: fertilizers, pesticides, and pharmaceuticals
• Pharmaceuticals: generic drugs and vaccines
• Engineering goods: machinery, equipment, and components

Top imports to UP

• Machinery
• Electronics
• Petroleum products
• Iron and steel
• Coal

UP’s Export Performance

• Based on data from Niryat Patrika (September 2022), from April 2020 to March 2021 to April 2021 to February 2022, UP witnessed a 29% increase in exports, rising from INR 121,140 Crore to INR 156,897 Crore. The state's share of India's total exports fluctuated around 5%, starting at 4.8% in April 2021, dropping to 4.6% in August 2021, but consistently exceeding 5% from November 2021, concluding at exactly 5% in March 2022.

Trade Partners

• Key export destinations for Uttar Pradesh included the USA (21%), UAE (10%), Nepal (6%), UK (5%), and Germany (5%). The state also explored potential markets in Egypt, Netherlands, France, Italy, Spain, Malaysia, Bangladesh, and Indonesia. The top three trade partners—USA, UAE, and Nepal—contributed to approximately 40% of the state's exports.

District wise share in UP’s exports

• The top 10 exporting districts in the state were G.B. Nagar (46%), Ghaziabad (7%), Moradabad (6%), Kanpur Nagar (5%), Agra (4%), Aligarh (4%), Sonbhadra (3%), Bhadohi (2%), Unnao (2%), and Bulandshahr (2%). G.B. Nagar retained its position as the highest exporting district, accounting for 46% of the state's exports.

Industrial Scenario

Uttar Pradesh is characterized by a moderate level of industrial development. The scarcity of minerals, inadequate infrastructure, and limited capital investment have hindered the growth of non-agricultural industries. In contrast, there has been notable progress in agriculture-based industries, as well as small-scale and cottage industries. The state's agricultural sector encompasses textiles, sugar, vegetable oil, and various other products. Additionally, major industries such as cement, textiles, leather, alcohol, paper, glass, chemicals, and agricultural machinery contribute significantly to the state's economic landscape.

Udyog Bandh :

• To streamline the establishment of industrial units and address related challenges, the state established Udyog Bandhu in 1981 as a high-level committee. This committee, later reconstituted as "Invest UP" in June 2020, aimed to provide assistance for timely setup and problem resolution for small, medium, and large-scale industries.

Industrial Investment and Employment Promotion Policy :
The Uttar Pradesh Industrial Investment and Employment Promotion Policy 2022, approved by the state government on November 3, 2022, focuses on expediting land availability for large investors, encouraging the relocation of foreign industries to Uttar Pradesh, and offering special incentives for reviving struggling industries.

Uttar Pradesh Industrial Investment and Employment Promotion Policy 2017 :

• In 2017, the state government introduced the Uttar Pradesh Industrial Investment and Employment Promotion Policy 2017, with a vision to position Uttar Pradesh as a prime investment destination. This policy, which introduced the "Make in UP" Division, emphasized creating ample employment opportunities and fostering sustainable and balanced development. It also outlined the formation of the Uttar Pradesh Investment Promotion Board, chaired by the Chief Minister.

A brief description of the state’s major industries

A concise overview of the major industries in the state of Uttar Pradesh, particularly focusing on the cotton textiles and handloom sector, can be summarized as follows:

• Establishment of Handloom and Textile Directorate:
  • The Handloom and Textile Directorate was formed in Uttar Pradesh on September 16, 1972, based on the recommendations of the Ram Sahay Commission.
  • It supervises 13 regional offices across various districts.
• Significance in the Handloom and Textile Industry:
  • Uttar Pradesh is the third-largest state in India in terms of the handloom and textile industry, ranking second in employment generation after agriculture.
  • One-fourth of the country’s handloom entrepreneurs operate in Uttar Pradesh, making it the largest industry in the state.
• Artistic Textiles and Specialties:
  • Uttar Pradesh is renowned for its artistic textiles, including Varanasi’s silk sarees, Sitapur’s dharis, Gazipur’s katwa parda, and more.
  • Cities like Kanpur, Agra, and Bareilly are known for handloom weaving of cotton textiles.
• Key Cities for Handloom Production:
  • Handloom weaving of cotton textiles is prevalent in cities such as Kanpur, Agra, Bareilly, Meerut, and others.
  • Varanasi is particularly famous for its silk saris, Lucknow for Chikankari embroidery, and Rampur for fine textile weaving.
• Printing and Specialized Works:
  • Printing work for quilts and covers is conducted in Farrukhabad, Jehangirabad, Pilkhua, and Mathura.
  • Mathura is recognized for its printing work on muslin fabric.
• Carpets, Rugs, and Blankets:
  • Carpets and rugs are crafted in Mirzapur, Bhadohi, Mathura, Bareilly, Agra, Sitapur, and Aligarh.
  • Blankets are manufactured in Muzaffarnagar, Najibabad, and Lavad (Meerut).

Uttar Pradesh State Textile Corporation :

• Established in 1969 as a government company and converted into a public limited company in 1973.
• Originally operated five mills, with Jhansi, Sandila, and Meerut still in operation, while Kashipur and Jaspur were transferred to Uttarakhand.
• Financial losses led to the closure of Kashipur and Jaspur mills, while the other three mills ceased operations.

Spinning Institutions and Closure:

• In 1974, two spinning institutions were formed to collaborate with the Uttar Pradesh State Textile Corporation.
• These institutions, State Spinning Company Ltd. and State Yarn Company Ltd., operated several spinning mills, but most were closed due to financial difficulties in the following years.

Current Weavers and Employment Impact:

• The handloom and textile industry in Uttar Pradesh supports approximately 6.64 lakh weavers, contributing significantly to livelihoods in the state.

Reservation of Handloom Textiles in India :

• Introduced in 1985, the Handloom (Reservation of Articles for Production) Act by the Indian government aims to prevent the shift of handloom textile production to power-looms. This legislation designates 11 specific textile products, such as cotton and silk sarees, dhotis, towels, gamcha, blankets, carpets, and lungi, exclusively for handloom weaving. The primary goal of the Act is to support and safeguard the traditional handloom industry by ensuring that these specified products are exclusively crafted using handloom techniques, preserving the distinctive artistry and craftsmanship of handwoven textiles. 
• By protecting the handloom sector, the government intends to stimulate employment opportunities, particularly in rural areas, and uphold the cultural heritage associated with handloom textiles. This reservation of articles for handloom production aligns with broader initiatives promoting sustainable and traditional craftsmanship in the textile industry. Additionally, the central government provides a 10% discount on the sale of handloom textiles during special fairs/exhibitions, and since November 2007, the Handloom Export Scheme has been operational with government support.

Uttar Pradesh Textile and Garmenting Policy-2022 :

• Approved in October 2022, the Uttar Pradesh Textile and Garmenting Policy-2022 aims to position Uttar Pradesh as a global textile manufacturing hub. The policy encourages all types of units related to the textile industry and sets a target to attract an investment of 10,000 crores INR. Furthermore, the policy aims to create 5 lakh jobs in the textile industry, contributing to the economic development of the state.

Mahatma Gandhi Bunkar Bima Yojana ( MGBBY ) :

• Implemented by the Government of India since 2008-09, the Mahatma Gandhi Bunkar Bima Yojana has the objective of providing insurance coverage to registered weavers aged between 18 to 50 years and 51 to 59 years.

Khadi Gramodyog

• Khadi-Gramodyog ( Khadi Village Industries ) :
  Khadi-Gramodyog, which translates to Khadi Village Industries, pertains to fabric woven from hand-spun cotton, silk, or wool yarns, either individually or in combination. In contrast, "Gramodyog" refers to industries situated in rural areas. These industries manufacture goods with or without electricity usage, offer services, and have a permanent capital investment per worker below fifty thousand rupees.
• UP Khadi and Village Industries Board :
  The oversight of Khadi and Village Industries activities in the state is conducted by the Uttar Pradesh Khadi and Village Industries Board, established in 1960. The board's objective is to establish small-scale industries with minimal capital investment in rural areas, thereby fostering more employment opportunities and fortifying the rural economy.
• Schemes under the Khadi and Village Industries Sector :
  • The Uttar Pradesh Khadi and Village Industries Board extend assistance and loan facilities to various entities, including registered Village Industries Associations, registered NGOs, individual entrepreneurs, educated unemployed youth, women, as well as members of SC and ST communities.
  • Several schemes operate within the Khadi and Village Industries sector. The Chief Minister’s Village Industries Employment Scheme provides loans of up to 10 lakhs INR to individual entrepreneurs. The Prime Minister’s Employment Generation Programme aims to create job opportunities, while the Rural Employment Generation Programme offers loans up to 25 lakhs INR with a 10% margin money grant. Various training programs for different industries are also available.

To commemorate Gandhi Jayanti, accredited Khadi institutions/committees offer a 10% discount on the sale of Khadi textiles and clothing for 108 working days, based on the state government's revenue and expenditure.