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Export Preparedness Index (EPI) 2020

Topics Covered: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Export Preparedness Index (EPI) 2020:


Context:

NITI Aayog in partnership with the Institute of Competitiveness has released the Export Preparedness Index (EPI) 2020.

EPI is the first report to examine export preparedness and performance of Indian states.

How were states ranked?

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.

Highlights of the report:

  1. Top 3 states: Gujarat, Maharashtra and Tamil Nadu.
  2. Among the landlocked states, Rajasthan has performed the best, followed by Telangana and Haryana.
  3. Among the Himalayan states, Uttarakhand topped the chart, followed by Tripura and Himachal Pradesh.
  4. Across Union Territories/City States, Delhi has performed the best, followed by Goa and Chandigarh.
  5. On policy parameters, Maharashtra topped the index followed by Gujarat and Jharkhand.
  6. On business ecosystem parameter, Gujarat was ranked number one followed by Delhi and Tamil Nadu.
  7. In the export ecosystem parameter, Maharashtra topped the Index followed by Odisha and Rajasthan.
  8. On the export performance parameter, Mizoram led the index, followed by Gujarat and Maharashtra.
  9. At present, 70 per cent of India’s export has been dominated by five states – Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana.

Export promotion in India faces three fundamental 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.

What needs to be done?

  1. A joint development of export infrastructure.
  2. Strengthening industry-academia linkages.
  3. Creating state-level engagements for economic diplomacy.
  4. Revamped designs and standards for local products.
  5. Harness the innovating tendencies to provide new use cases for such products, with adequate support from the Centre.

Way ahead:

Rapid growth of exports is a crucial component for long-term economic growth. A favourable ecosystem enables a country to contribute significantly to global value chains and reap the benefits of integrated production networks, globally.

InstaLinks:

Prelims Link:

  1. Who releases the Export Preparedness Index (EPI)?
  2. Performance of various states under various categories.
  3. How are the states ranked?

Mains Link:

Discuss the significance of the Export Preparedness Index (EPI) 2020.

Sources: pib.