19th October 2020

Confidant Classes

A Premier Judicial Service Coaching

The 2020 Export Preparedness Index (EPI)

The 2020 Export Preparedness Index (EPI) released on Wednesday highlighted regional disparities in ‘poor’ export infrastructure, trade support and growth direction, as well as research and development infrastructure as key obstacles to boosting India’s exports.

  • While the index attempts to counter the one-size-fits-all approach by examining each state’s performance against various benchmarks, lessons have shown that “most” of these states have not addressed these top three issues.

“The inability of most states to propose strategies relevant to these three areas raises the question of whether states lack the capacity to address these problems. This should be explored outside the context of this study, as it requires a very detailed analysis, ”

said the report, produced by NITI Aayog in association with the Institute for Competitiveness.
  • At the same time, it offered short-term solutions to these “big” bottlenecks, ranging from facilitating the joint development of export infrastructure to collaborating with academic institutions.
  • Creating convergence for the construction of export infrastructure, facilitating strong links between industry, academia and government to create commercial support networks, promoting state-level commitments on economic diplomacy and by emphasizing designs and standards, India could draw some of the key lessons from this analysis.
  • States should not only focus on increasing and diversifying exports, but they should also focus on upstream and downstream integration in global value chains, which would allow states to export goods. and services with higher added value, add the report.
  • It also pointed to India’s inability to take advantage of China’s declining export capacity in 2014-2016, losing to countries like Vietnam due to a delay in action.
  • This “useful life” had allowed other developing economies to enter and subsume production chains in which China had weakened or its influence was waning.

“India introduced reforms at the end of 2017 to ensure that the export sector remains competitive and attracts potential investors. However, Bangladesh and Vietnam have made the most of the situation ahead of India and improved their competitiveness in exporting by targeting its strengths ”,

Report said, its export potential and its performance.
  • The index weighted the 28 states and eight territories of the Union on 50 different parameters, parameters include export promotion policy, business environment, support for research and development, export diversification, infrastructure, etc.
  • Gujarat’s announced new industrial policy has export-oriented units in 15 thrust sectors, according to the statement. Gujarat handles 40 percent of India’s cargo and exports services and goods to 180 countries.
  • In the first Export Preparedness Index published by NITI Aayog, Gujarat topped the state ranking because Gujarat topped Niti Aayog’s 2020 Export Readiness Index, followed by Maharashtra and Tamil Nadu in second and third respectively, according to the report of the group of governmental experts.
  • Six coastal states – Gujarat, Maharashtra, Tamil Nadu, Odisha, Karnataka and Kerala – are in the top ten, indicating the presence of strong enabling and facilitating factors to promote exports, according to the report.
  • Among the landlocked states, Rajasthan performed the best, followed by Telangana and Haryana.
  • Among the Himalayan states, Uttarakhand tops the list, followed by Tripura and Himachal Pradesh. Across the Union Territories, Delhi performed the best, followed by Goa and Chandigarh.
  • The report indicated that Chattisgarh and Jharkhand were two landlocked states that had taken various measures to promote exports.
  • The report notes that other states facing similar socio-economic challenges may examine the measures taken by Chhattisgarh and Jharkhand and try to implement them to increase their exports.

Highlights of EPI- 2020

Niti Aayog in partnership with the Institute of Competitiveness released the first Export Preparedness Index (EPI) 2020. The EPI intends to identify challenges and opportunities and encourage a facilitative regulatory framework.

  • The index ranked states on four key parameters – policy; business ecosystem; export ecosystem; export performance.
  • The index also took into consideration 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.
  • On policy parameters, Maharashtra topped the index followed by Gujarat and Jharkhand, while on business ecosystem parameter, Gujarat was ranked number one followed by Delhi and Tamil Nadu.
  • In the export ecosystem parameter, Maharashtra topped the Index followed by Odisha and Rajasthan and on the export performance parameter, Mizoram led the index, followed by Gujarat and Maharashtra.
  • The report pointed out that at present, 70 per cent of India’s export has been dominated by five states – Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana.
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