Gujarat has topped the Niti Aayog's Export Preparedness Index 2020 followed by Maharashtra in second place and Tamil Nadu in the third place, as per a report released by NITI Aayog on August 26, 2020.
Speaking during the release of the report, NITI Aayog Vice Chairman Rajiv Kumar said that exports are an integral part of Aatmanirbhar Bharat and India will have to continue to strive to increase the share of exports in GDP and world trade. He said that we will try to double India's share in world trade in the coming years.
The report- Export Preparedness Index (EPI) 2020 was released by Niti Aayog in partnership with the Institute of Competitiveness.
The index ranked states on four key parameters:
1. Policy
2. Business Ecosystem
3. Export Ecosystem
4. Export Performance.
The index also took into consideration 11 sub-pillars including export promotion policy, infrastructure, transport connectivity, export infrastructure, export diversification, institutional framework, business environment, access to finance, trade support, growth orientation and R&D infrastructure.
NITI Aayog Report: Key Highlights
• While Gujarat topped the index, Maharashtra and Tamil Nadu came second and third respectively.
• Overall, six of the eight coastal states featured among the top ten states, performing the best across India. This indicates the presence of strong enabling and facilitating factors to promote exports in the coastal areas of the country.
• Uttarakhand performed the best among the Himalayan states, followed by Tripura and Himachal Pradesh.
• Delhi performed the best across the Union Territories, followed by Goa and Chandigarh.
• Among the landlocked states, Rajasthan performed the best followed by Telangana and Haryana.
• Two other landlocked states- Chhattisgarh and Jharkhand were also mentioned in the report for initiating several measures to promote exports. By stating their example, the report highlighted that export orientation and preparedness is not restricted to only prosperous states.
• The report stated that other states facing similar socio-economic challenges can look at the measures taken up by Chhattisgarh and Jharkhand and try to implement them to grow their exports.
Why is there a distinction between coastal states and landlocked states?
According to NITI Aayog Vice-Chairman, there is a need to distinguish between coastal states and landlocked states because conditions for exports in coastal states and landlocked states are very different.
Niti Aayog CEO Amitabh Kant said that the rapid growth of exports is a crucial component for long-term economic growth. He further added saying that a favourable ecosystem enables a country to contribute significantly to global value chains and reap the benefits of integrated production networks, globally.
Key Challenges
• The report revealed that export promotion in India faces three key challenges:
1. Intra- and inter-regional disparities in export infrastructure
2. Poor trade support and growth orientation among states
3. Poor R&D infrastructure to promote complex and unique exports.
• The report highlighted that there is a need to focus on key strategies to address these challenges such as strengthening industry-academia linkages, creating state-level engagements for economic diplomacy and joint development of export infrastructure.
• The report stated that these strategies can be supported by revamped designs and standards for local products with adequate support from the central government. It further noted that to make India a developed economy and an ‘Atmanirbhar Bharat’, it is important to increase exports from all the states and union territories.
Background
India's per capita exports currently stand at USD 241, in comparison to China's USD 18,000 and South Korea's USD 11,900.The Indian government has made it clear that production linked incentive (PLI) schemes are critical to promoting exports.
India's merchandise exports have witnessed an increasing rise from USD 275.9 billion in 2016-17 to USD 303.5 billion in 2017- 18, to USD 331.0 billion in 2018-19.
The COVID-19 pandemic has, however, dealt a severe blow to the current fiscal and this led India's exports to shrink by almost 60 percent in April 2020.
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