Gujarat tops NITI Aayog's Export Preparedness Index; Maharashtra, Tamil Nadu follow

Gujarat has topped the NITI Aayog's Export Preparedness Index (EPI) 2020 that examines export preparedness and performance of Indian states. The EPI is meant to help policymakers identify challenges and opportunities in export promotion, enhance the effectiveness of government policies, and encourage a facilitative regulatory framework.

The EPI was released on Wednesday by top NITI Aayog officials in New Delhi.

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.

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.”

In a statement, the government-backed think tank said the EPI shows that most Indian states performed well on average across the sub-pillars of export diversification, transport connectivity, and infrastructure. The average score of Indian states in these three sub-pillars was above 50%.

There is a high scoring range amongst Indian states on the EPI where Gujarat has the highest score of 75.14 and Jammu and Kashmir with the lowest score of 12.27.

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Category-wise rankers

• 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, the NITI Aayog said.

According to the think tank, 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.

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Challenges and strategies

Based on the findings of the report, the Aayog said 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, the NITI Aayog said.

"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 think tank said.

Access the full EPI Report here

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