Government think tank Niti Aayog and the commerce ministry are working on an index to rank states on their readiness for exports and promote a healthy competition among them, senior officials said.
The export index will rank states on half-a-dozen key parameters, including their policies, ease of doing business, infrastructure, access to finance, and output, which will assess the overall export market and exports from each state.
A senior government official said there will be 30-40 parameters under the six main sub-heads, based on international trade parameters but tweaked to Indian scenario.
“The government is seized of the fact that if India intends to increase its exports and subsequently its share of global trade, we will have to improve the export readiness of states,” he told ET. “Hence, the whole idea of an export index is to make states more competitive.” According to the official, export policies of various states are being studied to identify the best practices. “We will also collate the best practices as part of the first report to help other states benefit,” he added.
The commerce department has identified indicators to reflect issues such as truck stoppages, anti-competitive practices and role of intermediaries affecting exports. These preliminary indicators will be based on efficiency in processes, ease of arranging logistics, quality of infrastructure, adherence to time lines, competence and quality of logistic operators. They will provide qualitative and quantitative assessment of the logistics available to export consignments. The draft logistics policy also seeks to ease bottlenecks.
While computing the index, Aayog will seek inputs from trade bodies like Export-Import Bank of India, and Indian Institute of Foreign Trade, besides different divisions of the commerce ministry including Director General of Foreign Trade. Aayog has been aggressively moving towards outcome-based monitoring and has been in the process of ranking states on key indices like health, education, water composite index, and agriculture, much in line with its role of promoting competitive and cooperative federalism.
The government expects India’s merchandise exports to grow 7.3% year on year to $325 billion in 2018-19. The growth rate would be lower than 9.8% clocked in 2017-18 due to factors including muted growth of traditional exports such as gems and jewellery, farm and engineering, a liquidity crunch, and global factors. India’s exports stood at $303 billion in 2017-18.
Trade has been a top priority for the government. However, infrastructure bottlenecks, high transaction costs and manufacturing constraints continue to be big challenges for exports. With the implementation of goods and services tax, however, India has become a unified market, subsuming more than a dozen federal and provincial levies, freeing up trade.