Context: Gujarat has topped the Niti Aayog's Export Preparedness Index 2020 followed by Maharashtra and Tamil Nadu in the second and third place respectively, according to the government think tank's report released last week. According to the report, six of eight coastal states feature in the top ten rankings, indicating the presence of strong enabling and facilitating factors to promote exports. Among the landlocked states, Rajasthan has performed the best, followed by Telangana and Haryana. Among the Himalayan states, Uttarakhand topped the chart, followed by Tripura and Himachal Pradesh; the report said adding that across Union Territories, Delhi has performed the best, followed by Goa and Chandigarh. The report noted that Chhattisgarh and Jharkhand are two landlocked states that had initiated several measures to promote exports.

About EPI 2020

• Its aim is to identify challenges and opportunities, enhance the effectiveness of government policies and encourage a facilitative regulatory framework for export.

The index ranked states on four key pillars:

• Policy: A comprehensive trade policy providing a strategic direction for exports and  imports.
• Business Ecosystem: An efficient business ecosystem helping states attract investments and create an enabling infrastructure for individuals to initiate start-ups.
• Export Ecosystem: Assess the business environment, which is specific to exports.
• Export Performance: This is the only output-based parameter and examines the reach ofexport footprints of States and Union Territories.
• Sub-pillars: 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.
• Features: The EPI is a data-driven effort to identify the core areas crucial for export promotion at the sub-national level (states and union territories).
• Benefit: The Index would be a helpful guide for the state governments to benchmark regional performance with respect to export promotion and thus deliver key policy insights on how to improve and enhance the exports.

Performace of States/UTs

• Overall States: Gujarat has topped the index followed by Maharashtra and Tamil Nadu.The other States that have made it to the top 10 include Rajasthan, Odisha, Telangana, Haryana, Chhattisgarh, Karnataka and Kerala.
• Coastal States: Gujarat emerged as the top-performing state followed by Maharashtra and Tamil Nadu.
• Landlocked States: Rajasthan has performed the best followed by Telangana and Haryana.
• Himalayan states: Uttarakhand is the highest followed by Tripura and Himachal Pradesh.
• Union Territories: Delhi has performed the best followed by Chandigarh.

Significance

• Indian economy holds immense potential to become a strong exporter on the world stage.
• To realize this, it is crucial that India turns to its states and UTs and make them active participants in the country’s export efforts.
• The Export Preparedness Index 2020 evaluates states’ potentials and capacities.
• The detailed insights from this Index will guide all stakeholders towards strengthening the export ecosystem at both the National and sub-national levels.

The export promotion in India faces three fundamental challenges:

• Intra- and inter-regional disparities in export infrastructure.
• Poor trade support and growth orientation among states.
• Poor research & development infrastructure to promote complex and unique exports.

What needs to be done?
There is a need to emphasise on key strategies to address these challenges:

• a joint development of export infrastructure
• strengthening industry-academia linkages
• creating state-level engagements for economic diplomacy.

To achieve the target of making India a developed economy by focusing on 'Atmanirbhar Bharat,' there is a need to increase exports from all the states and Union Territories. The EPI provides invaluable insights on how states can attain this goal. 
Ket Facts

• Indian states scored average 50% in sub-pillars of Exports Diversification, Transport Connectivity, and Infrastructure. 
• Overall, most of the Coastal States are the best performers. 
• Top Coastal States: Gujarat, Maharashtra and Tamil Nadu 
• Top landlocked states: Rajasthan, Telangana and Haryana.
• Top Himalayan states: Uttarakhand, Tripura and Himachal Pradesh.
• Top Union Territories: Delhi, Goa and Chandigarh.

Global Index related to Trade and India's Performance

• Global Competitiveness Index: India, which was ranked 58th in the annual Global Competitiveness Index compiled by Geneva-based World Economic Forum (WEF), is among the worst-performing BRICS nations along with Brazil (ranked even lower than India at 71st this year).
• The World Bank released an annual report on 'Ease of Doing Business: Trading Across Borders 2019': India climbed 14 rungs in the World Bank’s Ease of Doing Business 2020 survey to stand at 63, among 190 countries, making it the one of world’s top 10 most improved countries for the third consecutive time.
• Global Enabling Trade Report: India has been ranked 102nd among 136 nations in the 2016 Enabling Trade Index (ETI), as per recently published ‘Global Enabling Trade Report 2016 of World Economic Forum (WEF) and the Global Alliance for Trade Facilitation. The list is topped by Singapore followed by the Netherlands, Hong Kong SAR, Luxembourg and Sweden. The index assesses the extent to which economies have in place the factors facilitating the free flow of goods over borders and to their destinations. It takes into consideration various factors, including domestic and foreign market access, border administration, transport and digital infrastructure and operating environment.

Road Ahead

• The per capita exports in India stood at about USD 241, as compared to USD 11,900 in South Korea and USD 18,000 in China. Therefore, Indian economy has a huge potential to become a strong exporter on the world stage. This can be achieved by making India’s states and union territories active participants in the country's export efforts.
• Currently, 70% of India’s export has been dominated by five states- Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana.
• Emphasis on key strategies like a development of export infrastructure, strengthening industry-academia linkages and creating state-level engagements for economic diplomacy to address the challenges in exports.
• The private sector can also play an important role in export promotion.
• Increase in exports can help India to achieve the target of making India a developed economy by focusing on ‘Atma Nirbhar Bharat’. The exports can also help generate employment in India.