Growing locally: On significance of GI tags

Synopsis: Geographical Indications tag is an opportunity for India to redefine the future of work using automation, technology and artificial intelligence while simultaneously enhancing and adorning the country’s talented local work force.

Introduction

India’s global brand recall and attributes of multi-cultural ethos, authenticity, and ethnic diversity are reason for increasing the country’s potential. One channel through which these attributes are brought out are Geographical Indications or GI tags.

Why GI tag is significant?

Revenue generators: With the emphasis on climate change and sustainability, GI products can be ready revenue generators. The patents and copyright protection of products under GIs result in higher economic gains, fostering quality production and better distribution of profits.

Global reach: Amazon’s local to global programme has taken Indian producers and their products such as Delta Leather Corporation’s leather and SVA Organics’s organic products to 18 global markets in over 200 countries.

In the two years ending March 2021, Amazon exported such Made in India goods worth $2 billion.

How Geographical Indications can benefit India?

Passion economy and entrepreneurship: it will convert talent into entrepreneurship with gig workers, and create a “passion” economy. It is a new way for individuals to monetise their skills and scale their businesses exponentially. It removes the hurdles associated with freelance work to earn a regular income from a source other than an employer. It encompasses the concept of trusteeship, as advocated by Mahatma Gandhi and more recently, by Prime Minister Narendra Modi at the UN. It is truly Made in India.

Employment creation: the labour-intensive nature of GI offers the best solution to boosting the employment-to-population ratio in India.

Women empowerment: 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.

Reverse urban migration: it will 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.

Positive benefits for local communities: it encourages the preservation of biodiversity, local know-how and natural resources.

Soft power: A strong GI ecosystem can be a wellspring of economic and soft power. It will automatically resolve the three fraught India issues of poor pay for talent, low female participation in the labour force, and urban migration.

What are some existing challenges?

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.

Issue of middlemen: With the shift to digital platforms, the distribution margins of middlemen will be competitive. Hence, government need to ensure that they do not act as countervailing agents by getting into similar businesses or product lines which will erode GI producer incomes.

What is the way forward?

First, a required skill for GI producers is digital literacy. This should be a priority agenda item for NGOs and stakeholders like the DPIIT.

The groundwork for MSME access to formal credit has already been done with the new Account Aggregator data-sharing framework.

Second, 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.

Third, Guardrails like regular audits and consultations with the GI producers must be mandated.

Source: This post is based on the article “Growing Locally” published in Indian Express on 1st Oct 2021.