Global ambitions, local lens: Niti Aayog’s state-level export preparedness report misses the big picture

Subscribe to enjoy similar stories. One characteristic of this era of social media, globally, has been an erosion in the credibility of expertise. Niti Aayog’s Export Preparedness Index 2024, a laborious attempt to measure how ready India’s different states are to generate exports, is not designed to counter that trend.

Released last week, it delves into the export readiness of states classified as ‘large,’ comprising 17 of them, and the rest—based on four pillars with 13 sub-pillars and as many as 70 parameters. Evidently, a lot of work has gone into it. Unfortunately, though, a missing macroeconomic perspective on export success dims the glow of its little gems of fact and insight.

The notion that individual states and districts within states can boost exports just on the strength of their initiative and drive is dubious. Take the 50% import duty that the US has levied on non-services, non-pharma exports from India. Garment exports from India have been hit, regardless of how prepared our garment-exporting states have been to support shipments.

The exchange rate is a crucial variable that determines how much a country can export and that is beyond the control of any state government. Access to foreign markets is majorly influenced by trade deals and partnerships, apart from the ability to figure in global supply chains. Neither is a state-specific capability.

The forging of supply network links is a function of nation-level industrial policy, supported with funds for design, R&D and infrastructure. The cost of capital, similarly, is under control of the central bank’s monetary policy committee. Import duties on inputs are critical determinants of how viable particular exports are, regardless of where production is