From Local Pride To Global Markets: How Geographical Indications Are Shaping INDIAN EXPORTS

GI tagging of products promotes competitiveness in exports and benefits local producers, especially those in rural and economically disadvantaged areas

Geographical Indications are more than just labels; they are the heart of local heritage and the key to unlocking global recognition.

Introduction

Geographical Indication (GI) is a designation employed on a product that derives from a particular geographical locale and must embody the reputation and characteristics from its place of origin. GIs are typically recognised for items crafted, grown or processed by indigenous and rural populations over generations, which have then proceeded to achieve significant recognition at both national and international levels due to their distinctive traits. The GI tag grants exclusive rights to the association of persons or producers to use the GI, while prohibiting others from using the name unless they adhere to the requirements for manufacturing the said product as laid out by the association.

GI tags are used on the following types of products.

• Handicrafts - Madhubani paintings and Mysore silk.
• Food items - Tirupati Laddu and Banglar Rasogolla.
• Wine and Beverages - Champagne, Cognac, Scotch Whisky, Tequila.
• Industrial Goods – Agra Leather Footwear, Nainital Mombatti (Candle), Mysore Agarbathi.
• Agricultural Products – Basmati Rice, Darjeeling Tea.

Importance of GI Tags

GIs play a crucial role in trade by linking product qualities and reputations to their geographical origins. They assure consumers of specific attributes and standards associated with products from certain regions, which help in fostering trust and promoting economic value for local producers. In certain cases, GIs also assist in protecting cultural heritage and traditional knowledge, thereby supporting sustainable development by preserving unique local practices and ecosystems. The advantage of GI tags is that they ensure legal protection for regional and specialty products so that no one else can claim ownership of that product.

The legal framework governing GIs in India is outlined under the Geographical Indications of Goods (Registration and Protection) Act, 1999, which permits any individual, firm, organisation, or legal entity representing the interests of producers to apply for a GI registration.

Economic Impact of GI Products on Exports: Data and Insights

Due to a robust statute guarding India’s GIs and several GIs being recognised and registered. The export potential of several indigenous products has been significantly boosted by enhancing their market value and protecting their authenticity. GI-tagged products not only contribute to the economic prosperity of their respective regions but also establish India’s reputation in global markets. Below are key examples of how GI products have positively impacted India’s export landscape:

• Tea Industry: A notable instance of a GI-tagged product enhancing exports is Darjeeling Tea, the inaugural Indian commodity to obtain a GI tag in 2004. The Tea Board of India reports that Darjeeling Tea exports have continually increased, with an annual volume growth of approximately 10-15% since obtaining the GI tag. In 2021, India sold more than 9 million kilograms of Darjeeling Tea, significantly adding to the country’s tea export revenue, which was over USD 700 million for that year.
• Basmati Rice: India’s Basmati exports constitute approximately two-thirds of the worldwide Basmati market. During the year 2021-22, India exported roughly 4.56 million metric tonnes of Basmati rice, generating income of about USD 4.18 billion.
• Handicrafts Sector: Geographical Indication protection has favourably influenced India’s handcraft exports. Banarasi sarees, renowned for their exceptional craftsmanship and elaborate motifs, have experienced increasing demand in global markets. Data from the Export Promotion Council for Handicrafts (EPCH) indicates that the export value of GI-tagged Banarasi sarees has risen by 20% since their designation. This expansion has been propelled by increased demand from markets in the United States, Europe and the Middle East. The Mysore Silk industry has witnessed a substantial increase in exports, achieving yearly growth rates of approximately 10% following the acquisition of a GI designation.
• Spices: GI protection for Indian spices such as Malabar Pepper and Mysore Betel Leaf has enhanced their global awareness. Malabar Pepper has become emblematic of premium quality pepper in European markets. From 2015 to 2020, India’s pepper exports had consistent growth, with Malabar Pepper accounting for a substantial portion of the over USD 500 million spice export sector in 2020-21.¹

Economic Benefits to Producers

GI tagging of products promotes competitiveness in exports and benefits local producers, especially those in rural and economically disadvantaged areas. The Channapatna Toys industry from Karnataka, experienced global market expansion following their GI registration. Industry sources indicate that local artists have experienced a 25-30% boost in income due to heightened demand for Channapatna toys in worldwide markets, particularly following partnerships with e-commerce platforms targeting global consumers.

Madhubani paintings from Bihar, also a registered GI, has achieved considerable prominence in the art market worldwide. Export revenues from Madhubani paintings have increased by more than 35% from 2017 to 2022, with these artworks displayed in galleries Japan, the UK, and the USA.²

Rural Development and Employment Generation

GIs have demonstrated efficacy as a driver for rural development and employment growth in India. A 2021 analysis by the Federation of Indian Chambers of Commerce and Industry (FICCI) indicates that areas with GI-tagged products have experienced a 25-30% rise in rural job opportunities. The manufacturing of Pochampally Ikat, a traditional textile from Telangana, has resulted in a 20% increase in employment within the local handloom sector, benefiting thousands of artisans.

GI-tagged products yield elevated prices in global marketplaces, for example, Kashmiri Pashmina shawls command prices about 50% more than their non-GI equivalents, leading to enhanced income for local weavers. In 2022, India exported Pashmina shawls worth approximately USD 6 million with Europe and the United States of America being the primary markets.³

Challenges and the Way Forward

Although the economic advantages of GIs are apparent there are problems as well. In 2022, the World Intellectual Property Organisation (WIPO) indicated that India’s GI export potential remains underutilised, mostly due to insufficient worldwide awareness of India’s GI products. Furthermore, inadequate enforcement methods in specific nations permit infringing products to inundate the market, hence devaluing authentic GI-tagged commodities.

Geographical Indications (GIs) are vital in transforming India’s unique traditional products into powerful economic assets in the global market. The GI system not only ensures market differentiation but also fosters rural empowerment by supporting local artisans and producers. By enabling access to higher-value markets and create sustainable livelihoods and promote regional development. Furthermore, GIs act as cultural ambassadors, boosting tourism to regions known for their unique goods.

Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.