Coastal States Emerge as Leader in Export Preparedness
·
Rajasthan Leads in Landlocked Group
NITI Aayog in partnership with
the Institute of Competitiveness released the Export Preparedness Index (EPI)
2020 on. The first report to examine export preparedness and performance of
Indian states, EPI intends to identify challenges and opportunities; enhance
the effectiveness of government policies; and encourage a facilitative
regulatory framework.
The structure of the EPI includes 4 pillars –Policy;
Business Ecosystem; Export Ecosystem; Export Performance – and 11 sub-pillars
–Export Promotion Policy; Institutional Framework; Business Environment;
Infrastructure; Transport Connectivity; Access to Finance; Export Infrastructure;
Trade Support; R&D Infrastructure; Export Diversification; and Growth
Orientation.
“The Indian economy holds immense potential to become a
strong exporter on the world stage. To realize this potential, it is crucial
that India turns to its states and union territories and makes them active
participants in the country’s export efforts. In an attempt to realize this
vision, the Export Preparedness Index 2020 evaluates states’ potentials and
capacities. It is hoped that the detailed insights from this Index will guide
all stakeholders towards strengthening the export ecosystem at both the
national and sub-national levels,” said NITI Aayog
Vice Chairman Dr Rajiv Kumar.
Amitabh Kant, Chief Executive Officer, NITI Aayog, said, “The Export Preparedness Index is a
data-driven effort to identify the core areas crucial for export promotion at
the sub-national level. All the states and union territories have been assessed
on crucial parameters that are critical for any typical economic unit to
achieve sustainable export growth. The Index would be a helpful guide for the
state governments to benchmark regional performance with respect to export
promotion and thus deliver key policy insights on how to improve and enhance
the same.”
What this edition of the EPI has shown is that most
Indian states performed well on average across the sub-pillars of Exports
Diversification, Transport Connectivity, and Infrastructure. The average score
of Indian states in these three sub-pillars was above 50%. Also, given the low standard
deviation in Export Diversification and Transport Connectivity, the averages
are not skewed to the higher side by a few over-achievers. However, Indian
states should also focus on other key components in order to improve export
competitiveness.
Overall, most of the Coastal States are the best
performers. Gujarat, Maharashtra and Tamil Nadu occupy the top three ranks,
respectively. Six of eight coastal states feature in the top ten rankings,
indicating the presence of strong enabling and facilitating factors to promote
exports. In the landlocked states, Rajasthan has performed the best, followed
by Telangana and Haryana. Among the Himalayan states, Uttarakhand
is the highest, followed by Tripura and Himachal Pradesh. Across the Union
Territories, Delhi has performed the best, followed by Goa and Chandigarh.
The report also highlights that export orientation and
preparedness are not just restricted to prosperous states. Even emerging states
can undertake dynamic export policy measures, have functioning promotional
councils, and synchronize with national logistical plans to grow their exports.
Chhattisgarh and Jharkhand are two landlocked states that had initiated several
measures to promote exports. Other states facing similar socio-economic
challenges can look at the measures taken by Chhattisgarh and Jharkhand and try
to implement them to grow their exports.
Many northeastern states under the Growth Orientation
sub-pillar were able to export more by focusing on their indigenous product
baskets. This shows that a focused development of such baskets (like spices)
can drive exports on one hand and also improve farmer incomes on the other in
these states.
Based on the findings of the report, export promotion in
India faces three fundamental challenges: intra- and inter-regional disparities
in export infrastructure; poor trade support and growth orientation among
states; and poor R&D infrastructure to promote complex and unique exports.
There is a need to emphasize on key strategies to address
these challenges: a joint development of export infrastructure; strengthening
industry-academia linkages; and creating state-level engagements for economic
diplomacy. These strategies could be supported by revamped designs and
standards for local products and by harnessing the innovating tendencies to
provide new use cases for such products, with adequate support from the Centre.
To achieve the target of making India a developed economy
by focusing on ‘Atmanirbhar Bharat’, there is a need
to increase exports from all the states and union territories. The EPI provides
invaluable insights on how states can attain this goal.
The final framework of the EPI was based on essential
feedback from states, UTs and organizations like EXIM Bank, IIFT and DGCIS. The
data has been primarily provided by state governments. For some of the
indicators, RBI, DGCIS and Central ministries were consulted.
Framework
·
The 4 pillars and the
rationale behind selection of each of them are given below:
·
Policy: A
comprehensive trade policy provides a strategic direction for exports and
imports.
·
Business Ecosystem:
An efficient business ecosystem can help states attract investments and create
an enabling infrastructure for individuals to initiate start-ups.
·
Export Ecosystem:
This pillar aims to assess the business environment, which is specific to
exports.
·
Export Performance:
This is the only output-based pillar and examines the reach of export
footprints of States and Union Territories.
Access the Report here:
[Digital_ExportPreparednessIndex2020_0]
Below is the link of the Launch event: