The Export Preparedness Index (EPI) 2024, released by NITI Aayog, provides a comprehensive assessment of the export readiness of Indian States and Union Territories by evaluating infrastructure, business ecosystem, policy and governance, and export performance. With a stronger focus on districts, MSMEs, human capital, and cost competitiveness, the index identifies key challenges and policy priorities, promotes cooperative federalism, and supports India’s long-term goal of achieving sustained, inclusive, and globally competitive export growth.
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NITI Aayog released the Export Preparedness Index (EPI) 2024, a comprehensive assessment of export readiness across India’s States and Union Territories (UTs). The Index recognises the diversity of subnational economic structures and their critical role in advancing India’s global trade ambitions.
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The Export Preparedness Index (EPI) is a composite index released by NITI Aayog to assess how well Indian States and Union Territories (UTs) are prepared to participate in and promote exports.
It evaluates the ecosystem required for exports, such as infrastructure, policies, institutions, and business environment, rather than only measuring export volumes.
The Export Preparedness Index (EPI) 2024 is designed as a comprehensive and evidence-based framework to assess the export readiness of Indian States and Union Territories. It is structured around four core pillars, which are further broken down into thirteen sub-pillars and seventy carefully selected indicators, enabling a granular, multidimensional, and policy-relevant evaluation of subnational export ecosystems.
Pillar I: Export Infrastructure (20%)
The Export Infrastructure pillar evaluates the physical and industrial foundations that enable the smooth movement of goods and services for exports. It assesses the adequacy and efficiency of trade and logistics infrastructure, including ports, roads, railways, and warehousing facilities. The pillar also examines the availability and reliability of connectivity and basic utilities such as power, water, and digital infrastructure, which are critical for export-oriented production. In addition, it evaluates the depth and quality of industrial infrastructure, including industrial parks, special economic zones, and manufacturing clusters that support export activity.
Pillar II: Business Ecosystem (40%)
The Business Ecosystem pillar, carrying the highest weightage, captures the broader economic and institutional environment in which export-oriented firms operate. It examines macroeconomic stability and cost competitiveness, which influence the ability of firms to compete in global markets. The pillar also evaluates the quality of human capital, focusing on skill availability and workforce readiness. Access to finance and credit, especially for exporters and MSMEs, forms a key component. Further, it assesses the strength of the MSME ecosystem and the overall industrial and innovation environment, reflecting a state’s capacity to support productivity, technology adoption, and value addition.
Pillar III: Policy and Governance (20%)
The Policy and Governance pillar assesses the role of State-level institutions and regulatory frameworks in facilitating exports. It examines the presence and effectiveness of State export policies, institutional coordination, and governance mechanisms. The pillar also evaluates the regulatory environment and compliance burden, including ease of doing business and transparency. Additionally, it measures institutional capacity and trade facilitation, such as the efficiency of export promotion agencies, single-window systems, and customs-related processes at the State level.
Pillar IV: Export Performance (20%)
The Export Performance pillar captures actual export outcomes and the ability of States to sustain and diversify exports over time. It evaluates export outcomes and growth trends, reflecting the scale and consistency of export activity. The pillar also assesses export diversification across products and markets, indicating resilience to external shocks. Further, it examines export promotion efforts, market access, and global integration, highlighting the extent to which States are integrated into global value chains and international markets.
Inclusion of macroeconomic and cost competitiveness dimensions: The EPI 2024 explicitly incorporates macroeconomic stability and cost competitiveness, allowing a more holistic assessment of the economic conditions that influence a State’s ability to compete in global markets and sustain export growth.
Enhanced focus on human capital and MSMEs: Greater emphasis has been placed on human capital development and the MSME ecosystem, recognising their pivotal role in driving export-led growth, employment generation, and value addition across regions.
Refinement of financial access and institutional indicators: The index introduces improved and more precise indicators for access to finance and institutional quality, enabling a clearer evaluation of credit availability, governance capacity, and policy effectiveness at the subnational level.
Strengthened district-centric approach: EPI 2024 adopts a stronger district-centric framework, recognising districts as the core units of export competitiveness and linking national export objectives with local capabilities, industrial clusters, and value-chain linkages.
States and UTs are grouped for fair comparison into:
Performance Categories
This classification encourages targeted reforms and peer-based policy learning.
Top Performing States and Union Territories (EPI 2024):
Large States
Small States, North Eastern States & UTs
Economic significance: The Export Preparedness Index plays a crucial economic role by supporting export-led growth and employment generation, particularly through MSMEs and labour-intensive sectors. It enhances India’s integration with Global Value Chains (GVCs) by identifying gaps in infrastructure, skills, and competitiveness. By highlighting cost-related and productivity constraints, the index helps States improve cost competitiveness and overall export efficiency.
Federal and governance significance: From a federal perspective, the EPI strengthens cooperative and competitive federalism by enabling comparison, peer learning, and performance benchmarking among States and Union Territories. It promotes evidence-based policymaking by grounding export strategies in data and measurable outcomes. Additionally, the index helps bridge regional disparities in export performance by identifying lagging regions and tailoring policy interventions accordingly.
Strategic significance: Strategically, the EPI helps India navigate global trade volatility by fostering diversified and resilient export ecosystems at the subnational level. It aligns State- and district-level export strategies with national trade ambitions, including the targets of USD 1 trillion in merchandise exports and Viksit Bharat @2047. The index also reinforces the Prime Minister’s emphasis on quality, standards, and competitiveness as key drivers of sustainable export growth.
Infrastructure and logistics gaps: The index highlights uneven export infrastructure and logistics quality across States, which adversely affects efficiency, cost competitiveness, and timely delivery of export consignments.
Constraints in access to finance: Limited access to finance and trade credit, especially for MSMEs, remains a major challenge, restricting firms’ ability to scale up production, diversify exports, and integrate into global value chains.
Skill deficits and human capital mismatch: The EPI points to skill gaps and weak alignment between human capital and export-oriented industries, undermining productivity and innovation potential.
Regulatory and compliance burden: Complex regulations and high compliance costs continue to pose barriers to ease of exporting and discourage participation of smaller firms in international trade.
Export concentration risks: The over-dependence of several States on a narrow range of products and export markets increases vulnerability to global demand shocks and trade disruptions.
District-as-export-hub and cluster-based strategy: The index underscores the need for a District-as-Export-Hub approach, supported by cluster-based and value-chain-driven strategies to leverage local strengths and decentralise export growth.
Strengthening logistics and connectivity: Greater investment in logistics infrastructure, ports, and multimodal connectivity is essential to reduce trade costs, improve reliability, and enhance export competitiveness.
Outcome-oriented state export policies: Strengthening State Export Policies with clear targets, institutional coordination, and outcome orientation is crucial for effective implementation and monitoring.
Expanding finance and credit support for MSMEs: The EPI calls for expanding trade finance, export credit, and risk-mitigation instruments for MSMEs to enable their deeper participation in export markets.
Emphasis on quality, standards, and branding: A stronger focus on product quality, global standards, certification, and branding is necessary to enhance competitiveness and move up global value chains.
The Export Preparedness Index (EPI) 2024 provides a comprehensive and forward-looking assessment of India’s subnational export ecosystems, highlighting both strengths and structural gaps across States and districts. By emphasising infrastructure, business environment, governance, and performance, and by adopting a district-centric approach, the index serves as a critical policy tool for fostering competitive federalism, inclusive growth, and deeper integration into global value chains, thereby supporting India’s long-term export and development ambitions.
Source: PIB
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Practice Question Q. “The Export Preparedness Index (EPI) reflects a shift towards a district-centric and ecosystem-based approach to export competitiveness in India.” Discuss the significance of EPI 2024 in strengthening India’s export performance and suggest measures to address the challenges highlighted by the Index. (250 Words) |
The Export Preparedness Index is a composite index released by NITI Aayog to assess the export readiness of Indian States and Union Territories by evaluating infrastructure, business ecosystem, policy environment, and export performance.
The first edition of the Export Preparedness Index was released in August 2020.
The Index is released by NITI Aayog, the Government of India’s premier policy think tank.
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