NITI Aayog has recently introduced the 3rd edition of the Export Preparedness Index (EPI) for the year 2022, assessing the readiness of India’s States and Union Territories (UTs) for exports. This comprehensive tool evaluates the nation’s export performance in the current global trade scenario in FY22 alongside an evaluation of the sectorwise export performance.
Understanding the Export Preparedness Index (EPI)
The EPI is designed to gauge the export preparedness of states and UTs. It becomes crucial as exports stimulate economic growth and development. A comprehensive analysis undertaken by this index across export-related factors helps identify their strengths and weaknesses.
It is based on four primary pillars such as policy, business ecosystem, export ecosystem, and export performance. In addition, it considers ten sub-pillars including export promotion policy, institutional framework, business environment, Infrastructure, transport connectivity, export Infrastructure, trade support, R & D infrastructure, export diversification, and growth orientation.
Key Findings from the EPI 2022
Tamil Nadu, Maharashtra, and Karnataka have emerged as the top performers in the EPI 2022. While Tamil Nadu excelled in export performance indicators, Gujarat, the top performer in 2021, moved down to the fourth slot. Uttarakhand topped among hilly/Himalayan states, followed by Himachal Pradesh and Manipur. Among landlocked regions, Haryana showed outstanding preparedness for exports. For union territories and small states, Goa acquitted itself best in the EPI 2022.
The global trade scenario in 2021 improved due to increased demand for goods, fiscal policies, efficient vaccine distribution, and easing of restrictions. However, the Russo-Ukrainian war in February 2022 affected the recovery process, primarily impacting sectors such as grain, oil, and natural gas.
India’s Export Trends
Despite the global slowdown, India’s exports in 2021-22 showed remarkable performance, crossing an unprecedented USD 675 Billion. The value of merchandise exports surpassed the government’s set target and reached up to USD 422 billion by March 2022. This progress was made possible because of several factors including increased global commodity prices and demand from developed countries.
Key Learnings from the Exports Preparedness Index (EPI)
Coastal states have been successful across all indicators with six out of the top states emerging from the coastal region. Considerable progress has been made in policy ecosystems, with numerous states implementing necessary policy measures to boost exports.
Although majority of districts have export action plans and are covered under the ‘One District One Product’ scheme, they lag behind in terms of transport connectivity. The study underscores the need for state governments to extend their support to struggling industries and improve the R&D sector. It also highlights the lack of capacity-building workshops for exporters, which restricts their penetration into global markets.
Recommendations from EPI for Enhancing Export Performance
The EPI suggests several measures to improve export performance. States are encouraged to adopt best practices from successful states, while also investing in R&D to drive product innovation and improve efficiency. They are advised to capitalize on their unique Geographical Indication (GI) products and diversify their export markets by identifying and promoting high-growth sectors.
Last Modified: February 22, 2024