Export Preparedness Index: Telangana best performer in business environment, not in `overseas trade infra'

Hyderabad: Telangana has emerged as the best performer state in the business environment category in the newly-released Niti Aayog's Export Preparedness Index 2021.

Telangana ranked tenth in the Export Preparedness Index 2021. The index is aimed at assessing the readiness of the states in terms of their export potential and performance.

Being a landlocked state which depends on the sea routes of neighboring states, Telanagana emerged as the best performer in the business environment but fell short in export infrastructure

Telangana has slipped from 2nd to 4th position in the landlocked category. Its performance has improved in the Business Environment, Access to finance, and R&D infrastructure.

But its overall scores have fallen in the export ecosystem and export performance pillars. Moreover, the state needs to improve its efforts in strengthening policy measures for better performance in the export preparedness index.

Gujarat, for the second consecutive time, topped the list followed by Maharashtra, Karnataka, Tamil Nadu, Haryana, Uttar Pradesh, Madhya Pradesh, Punjab, Andhra Pradesh, and Telangana.

Business Environment

Telangana, a landlocked state, has shown the best performance with 100 scores, leaving Uttar Pradesh and Rajasthan behind. According to NITi Aayog, this is primarily due to its innovation index performance and lower power cost.

Hyderabad is a hub for Information Technology (I.T.) and the pharmaceutical industry. This is also reflected in its top 10 export basket commodities. Moreover, Hyderabad is emerging as a hotspot in the data center space. IT, ITeS, pharmaceuticals, and cloud solution companies' presence in the state act as demand drivers for significant ticket investments.

National Payments Corporation of India (NPCI) invests $ 70 million in its Tier-IV data center in Hyderabad. This has been reflected in its Ease of doing business score of 48.6. Telangana's performance is a positive outlier; hence it must be understood relative to other states. The state's efforts at improving the business environment are commendable. Still, there is scope for improvement in the state's performance in the future.

Export Infrastructure

Telangana, which scored 17.45 out of 100, is just ahead of Jharkhand (16.50). According to NITI Aayog, the state needs to fill gaps in its infrastructure facilities to improve the overall export ecosystem. This can be done by introducing export promotion hubs SEZ in the regions and making trade guides more transparent and accessible with relevant export information.

This will improve the existing export infrastructure, improving the export of various commodities and services. On the other hand, UP (55.28) and Punjab(45.53) have ranked high due to Agri export zones and performed well in other indicators.