Tamil Nadu has emerged as India’s most export-competitive state, topping Niti Aayog’s Export Preparedness Index 2022.
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EPI (Export Preparedness Index)
- The EPI is a comprehensive tool for assessing the export readiness of India’s states and union territories (UTs).
- The index examines different characteristics, allowing for the identification of regional strengths and weaknesses and providing vital insights for better policy creation.
EPI focuses on four pillars:
- Policy: This pillar assesses a state’s trade policy effectiveness, offering strategic direction for both exports and imports.
- Business Ecosystem: The effectiveness of a business ecosystem is critical for attracting investments and creating an enabling environment for startups and entrepreneurship.
- Export Ecosystem: This pillar evaluates the export-specific business environment, assessing the level of assistance and facilitation provided to exporters.
- Export Achievement: This pillar’s single output-based metric investigates the reach of export footprints in states and UTs, quantifying real export achievements.
- Export Promotion Policy; Institutional Framework; Business Environment; Infrastructure; Transport Connectivity; Export Infrastructure; Trade Support; R&D Infrastructure; Export Diversification; and Growth Orientation are among the ten sub-pillars.
Export-Competitive State Performance:
- Top Contenders: Maharashtra, Karnataka, and Gujarat (last year’s leader) were close behind, with Haryana taking fifth place.
- Dominance of Coastal States: Coastal states dominated the top ranks, occupying four of the top five positions. Andhra Pradesh was also ranked ninth.
- Gujarat’s Top Merchandise Exporter: Gujarat is the major merchandise exporter, accounting for one-third of total Indian merchandise exports.
- Top Five Exporting States: India’s top five exporters are Maharashtra, Tamil Nadu, Karnataka, and Uttar Pradesh.
- Dominance of Seven States: Only seven states generate an amazing 75% of India’s total exports.
Reasons for an increase in exports
- Policies for Export Promotion: Export promotion programmes have been implemented at both the state and district levels in the top-performing states.
- Diversified Export Basket: These states’ export baskets are diverse, demonstrating their global influence.
- Promoting Unique Products: Successful states promote products that are unique to their region. Tamil Nadu and Karnataka are the leaders in geographical indication (GI) goods exports.
The Export Performance of India
- Despite pandemic problems and supply-side issues, India’s commodities exports remained strong, reaching an all-time high of $447 billion in FY23.
- Target for FY24: Due to global headwinds, the government has refrained from announcing a particular export target for FY24, but may aim for $450 billion to $500 billion in goods exports.
- Services exports totaled $323 billion in FY23, raising India’s overall exports to $770 billion.
Source: https://www.niti.gov.in/sites/default/files/2023-07/Export-Preparedness-Index-2022_0.pdf