Export Preparedness Index 2022 | Economic Survey & Government Reports - UPSC PDF Download

NITI Aayog has recently released the 3rd edition of the Export Preparedness Index (EPI) for States and Union Territories (UTs) for 2022. This report evaluates India's export performance amid global trade conditions in FY22, providing insights into sector-specific export achievements.

What is the Export Preparedness Index?

About:

The EPI is a comprehensive tool designed to measure the readiness of States and UTs in India for exports. Given the critical role of exports in driving economic growth and development, the index identifies factors influencing export performance. It analyzes strengths and weaknesses across States and UTs related to exports.

Pillars:

1. Policy: Evaluates the strategic direction provided by trade policies for exports and imports.
2. Business Ecosystem: Assesses how effectively States can attract investments and support start-ups through robust infrastructure.
3. Export Ecosystem: Analyzes the business environment specific to exports.
4. Export Performance: The sole output-based pillar, focusing on the extent of export footprints across States and UTs.

Sub-Pillars:

The index considers 10 sub-pillars: Export Promotion Policy, Institutional Framework, Business Environment, Infrastructure, Transport Connectivity, Export Infrastructure, Trade Support, R&D Infrastructure, Export Diversification, and Growth Orientation.

Features:

The EPI uses data-driven analysis to identify critical areas for export promotion at the sub-national level. It highlights export potential by examining the contributions of individual States and UTs.

What are the Key Highlights of the EPI 2022?

Performance of States:

1. Top Performers:

   • Tamil Nadu ranked first in EPI 2022, followed by Maharashtra and Karnataka.
   • Gujarat, which led in EPI 2021, dropped to fourth place.
   • Tamil Nadu excelled in export value, export concentration, and global market footprint, leading in sectors like automotive, leather, textiles, and electronic goods.

2. Hilly/Himalayan States:

   • Uttarakhand topped this category, followed by Himachal Pradesh and Manipur.

3. Landlocked Regions:

   • Haryana secured the highest rank, followed by Telangana and Uttar Pradesh.

4. Union Territories/Small States:

   • Goa ranked first, with Jammu and Kashmir, Delhi, Andaman and Nicobar Islands, and Ladakh following.

Global Economy:

• Global trade recovered in 2021 due to increased demand, fiscal policies, vaccine rollout, and eased restrictions, showing a 27% rise in merchandise trade and a 16% rise in services trade compared to 2020.
• However, the Russia-Ukraine war in 2022 disrupted recovery, especially in grain, oil, and natural gas sectors.

India’s Export Trends:

• In 2021-22, India’s exports surpassed USD 675 billion, with merchandise trade contributing USD 422 billion.
• Higher global commodity prices and rising demand from developed nations drove this growth.

What are the Key Learnings of the Exports Preparedness Index (EPI)?

• Coastal States performed best, with six among the top States located in coastal regions. Tamil Nadu, Maharashtra, Karnataka, and Gujarat stood out in specific pillars.
• The policy ecosystem showed promise, with many States adopting measures to enhance exports.
• At the district level, 73% have export action plans, and over 99% participate in the ‘One District One Product’ scheme.
• Transport connectivity remains a challenge, particularly for landlocked and geographically disadvantaged States.
• Limited emphasis on Research and Development (R&D) hampers innovation in exports.
• Many industries face challenges despite government support, with 26 States experiencing reduced gross value addition in manufacturing and 10 States seeing decreased FDI inflows.
• Lack of capacity-building workshops for exporters remains a barrier, with 25 States organizing fewer than 10 workshops annually.
• Timely approval of projects is essential to maximize the impact of government schemes.

What are the Recommendations of the EPI?

1. Adoption of Good Practices: States should learn from successful peers to enhance their export strategies.
2. Investment in R&D: Focus on R&D for innovation, quality improvement, cost efficiency, and market-specific product development. Dedicated research institutes with steady funding can boost exports.
3. Leveraging Geographical Indication (GI) Products: Promote unique GI products like Tamil Nadu’s Kancheepuram Silk to establish a global market presence.
4. Diversification of Export Markets: Identify and support high-growth sectors such as IT, pharmaceuticals, automotive, textiles, and renewable energy to expand export opportunities.