NITI Aayog’s export preparedness report paints a mixed picture

NITI Aayog’s export preparedness report paints a mixed picture

Subject :Economy

Section: External sector

In News: NITI Aayog releases Export Preparedness Index (EPI) for 2022.

Key Points:

• The EPI 2022 Report evaluates the performance of the states across four pillars – Policy, Business Ecosystem, Export Ecosystem, and Export Performance. The index uses 56 indicators which holistically capture the export preparedness of States and UTs in terms of exports at both the state and district-level.
• Tamil Nadu has been ranked the No. 1 State in Export Preparedness Index (EPI) for 2022. It is followed by Maharashtra and Karnataka.
• Gujarat has been pushed to the fourth slot this time. Tamil Nadu has been in the top 5 list among Large/Coastal States’ categories in the past two years.
• Concerns:
  • Twenty six States in India saw a decrease in gross value addition by their manufacturing sector, indicating the continued presence of impact of pandemic,
  • Some ten States have also reported a decrease in inflow of foreign direct investment (FDI).
•  Amongst the Union Territories and small States, Haryana and Goa are ranked one; while the top spot among the Himalayan States goes to Uttarakhand.
• In comparison, landlocked States have had a “satisfactory performance” with Uttar Pradesh and Haryana being the “positive outliers”. In case of States like Punjab and Telangana, “their regional advantages are untapped”.
• Himalayan States and Union Territories, barring four- Uttarakhand, Himachal Pradesh, Goa and Delhi, have reported “unsatisfactory performances” indicating the urgent need for reforms here.
• At the district level, 73 per cent have an export action plan in place and over 99 per cent are covered under the ‘One District One Product’ scheme.
• States have a decent business environment with many States boasting of dedicated industrial presence, single-window clearance, and health export credit rates
• Some 10-odd commodities account for 90 per cent of the exports; whereas 100 districts in the country account for nearly 87 per cent of the exports.
• Among export districts, Jamnagar in Gujarat topped the chart. It was followed by Surat.
• While Jamnagar is the hub of petroleum, Surat is the main centre for gems and jewellery.
• The report also mentioned that Karnataka and Tamil Nadu have the highest number of GI products being exported.

Recommendations

• The Niti Aayog report adds that States have lagged in transport connectivity. The absence of air connectivity hampers the movement of goods across regions, especially which are landlocked or geographically dis-advantaged
• Recommendations include diversification of export markets including tapping of GI products for export purposes.
• States should also identify other markets for their existing products.
• Promoting high growth sectors like IT, automotive, textiles and renewable energy also enhances export competitiveness.
• Leveraging FTAs and improving data availability for exports have also been suggested.