Odisha Trade and Commerce

Odisha  Trade and Commerce

Odisha is located in the eastern region of India. The state shares its borders with West Bengal on the north-east, Jharkhand on the north, Andhra Pradesh on the south, Chhattisgarh on the west, and the Bay of Bengal on the east.

The state’s economy witnessed high growth rates between 2004-05 and 2015-16, with gross state domestic product (GSDP) expanding at a compound annual growth rate (CAGR) of 10.25 per cent.

Odisha is resource rich region and has myriad of  mineral and metal based industries  and most of the economy is dependent on these . Here the industries dependent on metals and minerals are flourishing to great extent  which provides impetus to the growth and development of not only Odisha but also of the country. During 2015-16, total production of minerals in the state was recorded at 239.45 million tonnes as compared to 189.83 million tonnes in 2014-15.  The broad industrial sector consists of Manufacturing, Mining and Quarrying, Electricity-Gas-Water Supply & other utility services and Construction sub-sectors. The sector contributed about 36.56 percent to Odisha’s  GSDP at 2011-12 prices in 2016-17and provides  employment to  89,199 persons. Rich mineral resources, particularly iron ore, bauxite and coal, availability of water and power and above all investor friendly policy of the State Government, has made Odisha a favored destination for investors. Odisha is the leading State in the country in aluminum, both in terms of production and capacity.Odisha  Trade and Commerce

Two big plants for production of aluminium  are NALCO and Vedanta Aluminum Limited (VAL) . The state is one of the top producers of aluminium in the country, both in terms of production capacity as well as actual production.

It is the first state in India to have undertaken reform and restructuring initiatives in the power sector. As of June 2016, the state had a total installed power generation capacity of 9,421.52 megawatt (MW).

The state has attracted Foreign Direct Investment (FDI) inflows worth US$ 403 million during the period April 2000 to March 2016, according to data released by Department of Industrial Policy and Promotion (DIPP).

Odisha has a well-developed social, physical and industrial infrastructure, and the state government has undertaken several infrastructural projects to further promote overall development. The state’s infrastructure includes well-connected road and rail networks, airports, ports, power, and telecom. As per state budget 2015-16, US$ 3.05 million was allocated for Externally Aided Projects (EAP) under Odisha Urban Infrastructure Development Fund (OUIDF). Moreover, US$ 6.11 million was earmarked to develop urban infrastructure in slum areas at Berhampur Town, with the assistance of World Bank.

As already discussed that mining is a core sector for the State because of vast mineral resources of the State. Odisha leads in the national mineral production of

Chromite (100percent)  iron ore (50.0 percent),  bauxite (35.2 percent),  manganese (25.5 percent) and  coal (20.1 percent) 

.This sub-sector seems poised for rapid growth notwithstanding the current problems. One specific concern relating to the mining sector is the observed trend in adoption of more and more capital intensive and labour saving technologies for improving global competitiveness. This may result in lower growth in employment generation in the sector.

Forest-based products provide livelihood to a large section of the population of the state. Agriculture and allied sectors have provided employment, directly or indirectly, to more than 60 per cent of the state’s total workforce.

The Odisha State Cooperative Handicrafts Corporation is engaged in strengthening the production base, enlarging marketing opportunities, encouraging exporters and introducing new designs and technology in the handicrafts sector. According to state budget 2016-17, an amount of US$ 33.27 million has been proposed for various schemes under the handloom, textile and handicrafts sectors in the state.

Odisha is one of the favoured investment destinations for domestic and international iron and steel players as well as one of the largest producers of iron and steel in India. The total production of iron ore in Odisha was recorded to be 80.87 million tonnes during 2015-16.

Odisha is amongst the top ten states accounting for the highest number of MSME enterprises. The state offers a wide range of fiscal and policy incentives for businesses under the Industrial Policy Resolution, 2007. Additionally, the state has sector-specific policies for IT and micro, small and medium enterprises. The state government has constituted “Team Odisha” to help with investment promotion.

Micro, Small and Medium Enterprises (MSME)

It is a rapidly growing sector and provides employment to the people. During 2015-16, the maximum numbers of MSMEs were set up in Sundargarh district, followed by Cuttack, Sambalpur, Ganjam & Khurda. Among manufacturing units, the largest number of MSME units belong to the Repairing & Services sectors followed by Textile sector. The handicraft and cottage industry in Odisha exhibits a declining trend in terms of number of units as well as employment generation. Industrial sickness continues to be a problem area for the MSMEs.

Recent Initiatives by the State Government

Odisha government has come with various recent development to make Odisha the favored investment destination. The following are some of the major initiatives taken by the government to promote Odisha as an investment destination.

The Odisha Cabinet has approved the Odisha start-up policy, aimed at setting up at least 1,000 start-ups over the next five years and bringing the state amongst the top three start-up hubs by 2020.

In order to increase the employment opportunities in the state, Odisha government has announced plans to invest US$ 28.69 billion in the manufacturing sector generating nearly three lakh job opportunities by 2020.

In June 2015, in an effort to increase the traffic of foreign airlines in the state, the state government exempted the Value Added Tax (VAT) imposed on aviation turbine fuel.

In July 2015, the state government announced plans to frame a rural Business Process Outsourcing (BPO) scheme under which subsidies are planned to be offered for establishing BPO units. In places where STPI (Software Technology Parks of India) stations are situated, employment opportunities are expected to be generated in the state. STPIs in the state are located in Bhubaneswar, Balasore, Rourkela and Berhampur.

As per budget 2016-17, US$ 39.71 million has been proposed by the state government for developing new railway projects such as the ongoing Khurda-Bolangir line, new Jaypore-Malkangiri, Jaypore-Nabarangpur railway lines, etc. in the state through direct state funding.

As per state budget 2016-17, the state government allocated US$ 1.52 million for development and enhancement of eco-tourism in Odisha.

A biopharma IT park at Bhubaneswar is being established under the public private partnership (PPP) model over a land area of 64.68 acres.

A mega food park is being established near Bhubaneswar over 282 acres through the PPP mode. Odisha Industrial Infrastructure Development Corporation (IDCO) is the nodal agency for the establishment of this park.

In order to strengthen the artisan-based enterprises in the handicrafts sector, 19 handicraft training centres are functioning in different districts.



The fourth edition of the six-day MSME trade fair organised by the MSME department of the Odisha government with an objective to promote startups.

In a bid to encourage innovation and entrepreneurship among youth, Chief Minister also gave away Youth Innovation Awards to 20 start-ups for their business ideas.

Over 250 small and medium enterprises including 50 startups have showcased a wide-range of products including IT products, agro-based and food-processing industries, pollution control devices, electrical equipments, chemicals and petrochemicals, polymers tourism, textiles and handicrafts.

In a bid to mentor the emerging entrepreneurs of the state, a seminar on ‘Mission 1000 Startups’ was organized. Successful Entrepreneurs, Venture Capitalists and Experts discussed various aspects of developing an enterprise and enlightened the budding entrepreneurs. The seminar proved to be a valuable platform for all the budding entrepreneurs and aspirants of the state who wish to begin their startup journey. People of all age groups were seen attending the seminar and also got the opportunity to interact with the dignitaries.

Various seminars on the start-up policy of Odisha, export promotion, food processing, tourism and procurement policy and credit mobilization of MSME are scheduled to be hosted, wherein experts from these fields will throw light on various prospects of growth and share their opinions.

Services Sector

Services sector also contribute to the growth of the economy and provides employment to large number of people of the state. The Services sector with a majority share of 44 percent of GSDP as per 2016-17 estimates at 2011-12 prices, is the leading sector of Odisha economy. The shares of its sub-sectors are Trade (11 percent), Transport & communication (7 percent), Real Estate (8 percent), Public Administration (4.27 percent ) and Other Services like Education& Health (9.17 percent). The sector has been consistently exhibiting accelerated growth rate from a level of 6.94 percent in 2012-13 to 8.08 percent in 2016- 17.

Economy largely depends on the banking sector as it provides impetus to the growth and development of not only the state but also to the growth and development of the country. Banking and insurance sub-sector has been steadily growing in the State. Presently about 80 percent of all bank branches are located in rural and semi urban areas. During 2015-16 number of bank branches grew by 9.13 percent. Total bank deposits and advances grew by 11.5 percent and 14 percent respectively. The advances to priority sector and agriculture sector increased by 26.8 and 28.4 percent respectively. The share of priority sector advance to total advances by banks remained high at 63.94 percent against the benchmark of 40 percent. Co-operative banks have been mainly focusing on rural areas and the agriculture sector.

Launching of Centrally Sponsored e-platform for setting up national agriculture market by Odisha State Agriculture Marketing Board is expected to provide remunerative prices to the agriculture producers and accessibility to a wider market across the nation particularly for agricultural produce like Maize, Cotton, Onion, Coconut and Turmeric.

In Odisha construction sector plays an important role as it helps in infrastructure upgradation and construction activities being labour intensive, growth in this sector contributes to growth in employment generation. The share of the construction sub-sector in the Odisha’s GSDP was around 8 percent as per 2015-16 estimates.

For the growth of the economy Tourism sector can’t be ignored. There still remains unutilized potential that can be exploited to achieve further growth in the sector. The State Government has been taking several measures to promote Tourism in the State. Odisha Tourism Policy 2013 and interventions like improved institutional mechanism, marketing support, expanded hotel industries has improved the tourism prospects in the State The domestic tourist arrival from within the State and outside State increased by 2.6 times and 1.8 times respectively during the year. Efforts have also been initiated to attract more and more foreign tourists .

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