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Monday, September 28, 2020

States failed to address three main issues: NITI report on export preparedness

While the index tries to counter the one-size-fits-all approach by scrutinising the performance of each state against various criteria, the learnings have shown that “most” of these states have failed to address these three main issues.

By: ENS Economic Bureau | New Delhi | August 27, 2020 2:01:35 am
Global MPI is an international measure of multidimensional poverty covering 107 developing countries. (File)

The Export Preparedness Index (EPI) 2020 launched Wednesday flagged regional disparities in export infrastructure, “poor” trade support and growth orientation as well as research and development infrastructure as key barriers to boosting India’s exports. While the index tries to counter the one-size-fits-all approach by scrutinising the performance of each state against various criteria, the learnings have shown that “most” of these states have failed to address these three main issues.

“The inability of most states to come up with relevant strategies for these three domains raises the question if the states do not have the capacity to address these issues. This has to be explored outside the context of this study as it requires a much-detailed analysis,” stated the report, prepared by NITI Aayog in partnership with the Institute for Competitiveness.

At the same time, it has offered some short-term solutions to these “significant” bottlenecks, ranging from facilitating joint development of export infrastructure to collaborating with academic institutions. “By creating convergence for building export infrastructure, facilitating robust industry-academia-government linkages to build trade-support networks, promoting state-level engagements for economic diplomacy, and an emphasized focus on designs and standards, India would be able to develop some of the key learnings of this analysis.”

“States will not only have to focus on increasing and diversifying exports but also need to focus on ensuring forward and backward integration to global value chains, which would allow the states to export higher value-added goods and services,” the report added.

It also highlighted India’s inability to take advantage of China’s falling export capacity during 2014-16, and losing out to nations like Vietnam due to delayed action. This “vital period” had served as an opening for other developing economies to enter and subsume lines of production from where China had either been weakened or its influence toned down.

“India did bring in reforms in late 2017 to ensure that the export sector remained competitive and attracts potential investors. However, Bangladesh and Vietnam had made the most of the situation before India and enhanced their export competitiveness by targeting their strengths,” it stated.

Gujarat tops NITI rankings

Ahmedabad: In the first ever Export Preparedness Index released by NITI Aayog, Gujarat topped the ranking among the states for their potential for exports and performance.

The index weighed all the 28 states and eight Union Territories on 50 different parameters, stated an official release from the Gujarat government on Wednesday.

The parameters include export promotion policy, business environment, R&D support, export diversification, infrastructure, etc. The new industrial policy announced by Gujarat has export oriented units among 15 thrust sectors, the release said. Gujarat handles 40 per cent of India’s cargo and exports services and goods to 180 nations. —ENS

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