Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

Niti Aayog’s Export Preparedness Index, 2022


From UPSC perspective, the following things are important :

Prelims level: Export Preparedness Index (EPI

Mains level: Not Much

PC: Live Mint

Central Idea

  • Tamil Nadu has emerged as the most export-competitive state in India, securing the top spot in the Export Preparedness Index 2022 by Niti Aayog.

Export Preparedness Index (EPI)

  • EPI is a comprehensive tool aimed at gauging the export readiness of India’s states and union territories (UTs).
  • The index analyses various parameters, enabling the identification of strengths and weaknesses in each region and offering valuable insights for effective policy formulation.
  • EPI focuses on four pillars:
  1. Policy: This pillar evaluates the effectiveness of a state’s trade policy, providing strategic direction for both exports and imports.
  2. Business Ecosystem: The efficiency of a business ecosystem is crucial for attracting investments and fostering an enabling infrastructure for startups and entrepreneurship.
  3. Export Ecosystem: This pillar assesses the business environment specific to exports, determining the level of support and facilitation provided to exporters.
  4. Export Performance: The sole output-based parameter, this pillar examines the reach of export footprints in states and UTs, measuring their actual export achievements.
  • 10 Sub-pillars include: Export Promotion Policy; Institutional Framework; Business Environment; Infrastructure; Transport Connectivity; Export Infrastructure; Trade Support; R&D Infrastructure; Export Diversification; and Growth Orientation.

States performance

  • Export-Competitive State: Top Contenders: Maharashtra, Karnataka, and Gujarat (last year’s leader) followed closely, while Haryana claimed the fifth position.
  • Coastal States’ Dominance: Coastal states dominated the top rankings, with four out of the top five positions occupied by them. Andhra Pradesh also secured the ninth spot.
  • Gujarat- Leading Merchandise Exporter: Gujarat holds the top position as the leading merchandise exporter, accounting for one-third of India’s total merchandise exports.
  • Top Five Exporting States: Maharashtra, Tamil Nadu, Karnataka, and Uttar Pradesh complete India’s top five exporters.
  • Seven States’ Dominance: An impressive 75% of India’s total exports are contributed by just seven states.

Reasons for export boost

  • Export Promotion Policies: The top-performing states have implemented export promotion policies at both state and district levels.
  • Diversified Export Basket: These states have a diverse export basket, showcasing their global footprint.
  • Promoting Unique Products: Successful states focus on promoting products unique to their region. Tamil Nadu and Karnataka lead in exporting geographical indication (GI) products.

India’s Export Performance

  • Resilient Exports: Despite pandemic challenges and supply-side issues, India’s goods exports remained robust, reaching an all-time high of $447 billion in FY23.
  • Target for FY24: The government refrained from setting a specific export target for FY24 due to global headwinds but may aim for $450 billion to $500 billion in goods exports.
  • Services Exports: Services exports amounted to $323 billion in FY23, bringing India’s overall exports to $770 billion.

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