19 Jul 2023 Export Preparedness Index (EPI)
This article covers “Daily Current Affairs” and the topic details “Export Preparedness Index”. The topic “Export Preparedness Index” has relevance in the Economy section of the UPSC CSE exam.
For Prelims:
About Export Preparedness Index (EPI) 2022?
For Mains:
GS 3: Economy
Key Learnings from EPI?
Recommendations?
Why in the news?
Tamil Nadu has been ranked the No. 1 State in Export Preparedness Index (EPI) for 2022. It is followed by Maharashtra and Karnataka. Gujarat has been pushed to the fourth slot this time. Tamil Nadu has been in the top 5 list among Large/Coastal States’ categories in the past two years.
Export Preparedness Index (EPI) 2022
- The Export Preparedness Index (EPI), released by NITI Aayog, is a comprehensive tool that measures the export preparedness of Indian states and Union Territories (UTs).
- It analyzes export-related parameters to identify the strengths and weaknesses of different regions to stimulate economic growth and development through exports.
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Key Highlights of EPI 2022:
Performance of States:
- Tamil Nadu secured the top spot in EPI 2022, followed by Maharashtra and Karnataka.
- Gujarat, which held the top position in EPI 2021, slipped to the fourth slot in EPI 2022.
- Tamil Nadu’s strong export performance indicators contributed to its leadership, especially in automotive, leather, textiles, and electronic goods sectors.
Hilly/Himalayan States:
Uttarakhand topped among hilly/Himalayan states, followed by Himachal Pradesh, Manipur, and others.
Landlocked Regions:
Haryana emerged as the top performer among landlocked regions, showcasing its preparedness for exports.
Union Territories/Small States:
Goa ranked first among Union Territories and small states, with Jammu and Kashmir, Delhi, Andaman and Nicobar Islands, and Ladakh following.
Global Economy:
- Global trade in 2021 showed signs of recovery from the Covid-19 pandemic, driven by increased demand for goods, fiscal policies, vaccine distribution, and eased restrictions.
- The Russo-Ukrainian war in February 2022 impacted sectors like grain, oil, and natural gas, temporarily slowing down recovery.
India’s Export Trends:
- Despite global slowdown, India’s exports in 2021-22 crossed an unprecedented USD 675 billion, with goods accounting for USD 420 billion.
- The increase in commodity prices and demand from developed countries boosted India’s merchandise exports.
Key Learnings from EPI:
- Coastal States Dominance: Coastal states performed the best across all indicators, with Tamil Nadu, Maharashtra, Karnataka, and Gujarat leading the pack.
- Policy Ecosystem: States have shown positive progress in adopting necessary policy measures to drive exports.
- Transport Connectivity: The absence of air connectivity affects goods movement, particularly in landlocked or geographically disadvantaged states.
- Research and Development: R&D investments are crucial for driving product innovation, quality improvement, and efficiency enhancement in exports.
- Leveraging Geographical Indication (GI) Products: States should promote and improve the manufacturing and quality of unique GI products to establish a presence in the global market.
- Export Market Diversification: States should identify high-growth sectors and focus on information technology, pharmaceuticals, automotive, textiles, and renewable energy.
Recommendations:
- Adoption of Good Practices: States should learn from successful peers and adopt relevant practices to improve export performance.
- Investment in Research and Development (R&D): States should invest in R&D for product innovation and market-specific creation to boost exports.
- Leveraging Geographical Indication (GI) Products: States should capitalize on their unique GI products and enhance their manufacturing and quality for improved exports.
- Export Market Diversification: Identifying and promoting high-growth sectors can enhance India’s export potential.
Conclusion:
The Export Preparedness Index serves as a vital tool to identify strengths and weaknesses, empowering states and UTs to enhance their export potential and contribute to India’s economic growth and development. The recommended strategies can further support states in their export endeavors, contributing to India’s global competitiveness.
Q.1 What is the Export Preparedness Index (EPI)?
(a) A comprehensive tool to measure the export performance of countries globally.
(b) An index that evaluates the export readiness of Indian states and Union Territories.
(c) A report published by the World Trade Organization (WTO) on global trade trends.
(d) A measure of a country’s trade balance and current account surplus.
Answer: (b)
Q,2 Which state topped the Export Preparedness Index (EPI) 2022?
(a) Maharashtra
(b) Gujarat
(c) Tamil Nadu
(d) Karnataka
Answer: (c)
Q.3 Discuss the key findings and recommendations of the Export Preparedness Index (EPI) 2022 in enhancing India’s export potential. How can states leverage their strengths and address the identified weaknesses to drive economic growth through exports?
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