Bottlenecks in exports from Northeast

Access to sea ports in Bangladesh and transborder connectivity projects raised hopes of the northeast region becoming a new hub for Indian exports. The third edition of the Export Preparedness Index (EPI)’ released by the NITI Aayog laid bare the poor preparedness of the states in the region to tap the potential. The report highlights that of the total 680 districts in the country from which goods and services are exported, the top 100 districts account for 87% of the total exports. None of the districts in the Northeast region figure among these 100 districts despite the region having 98% of international borders, which speaks volumes about the persistent paradoxical situation. Among the ten states included in the landlocked category’, Assam has slipped a notch to the eighth rank compared to the seventh rank in the previous index, while most other states in the region included in the ‘Himalayan States’ category except Manipur have scored less than 40 on a scale of 1 to 100. The states in the region are showcased as resource-rich and having good export potential, but the NITI Aayog’s report brings to the fore that among the Himalayan states, Arunachal Pradesh, Manipur, Mizoram, and Tripura have no sector-specific policy measures, a method to publicly disseminate information on quality standards, or facilitation of export promotion measures by awards or incentives. Arunachal Pradesh in particular has not identified thrust sectors for exports and does not provide any marketing support to manufacturers, it adds. Such findings point towards the gap between the export dream over the region’s potential shaped by India’s Act East Policy and Neighbourhood First policies and ground realities in states. The strengths of all landlocked states, including Assam, include having an export promotion policy as well as sector-specific strategies to boost exports. Along with this, all these states have a public forum for quality standards, organise workshops, and aid marketing to support manufacturers in their respective states. Except for one district in Telangana and three districts in Rajasthan, all districts in these states are covered under the government’s ‘One District, One Product (ODOP)’ scheme, which, as highlighted in the report, reflects efforts to boost exports. Ironically, only 37% of districts in Assam have drafted an export action plan, which implies that the majority of the districts are still clueless about how to export the products identified under the ODOP scheme. District Export Action Plans identify products and services for overseas markets and include specific actions needed to support local exporters and manufacturers in producing and manufacturing identified products in adequate quantities and quality to tap potential export markets. The government informed the parliament that ODOP has been merged with the Districts as Export Hubs initiative with the objective of helping producers and manufacturers address challenges for exports of such identified products and services, such as infrastructural bottlenecks, supply chain gaps, and improving market accessibility for boosting exports. The report acknowledges positive growth in exports and in the number of exporters in landlocked states, including Assam, and recommends the establishment of more agri-export zones to facilitate agricultural exports, building an exporters’ database, stakeholders’ consultations, and capacity-building workshops for improving the export ecosystem. Boosting millet production can unlock new opportunities in agri-export from the northeast region. The Index scorecards show that Manipur, Tripura, Nagaland, Meghalaya, Arunachal Pradesh, Mizoram, Sikkim, and Nagaland have performed below the national average in export preparedness to enhance their performance. The recommendations for these states to improve the ecosystem include improvement in the manufacturing sector, strengthening linkages between industries to enhance cluster strength and drive state productivity, improving connectivity to remove the geographical disadvantage, and establishing air cargo terminals, cold storages, and warehouses to facilitate exports and improve connectivity. States in the region not performing well in export preparedness only means that tremendous opportunities unlocked by deepening trade and commerce ties between India and neighbouring countries like Bangladesh, Myanmar, Bhutan, and ASEAN countries have escaped the imagination of stakeholders in the region. The uniqueness of a product in the region alone is not sufficient for export viability, and exporters must be assured of adequate production and smooth supply according to the demand of the export markets. States in the region creating common inventories of identified products and the availability of exportable surplus can help exporters get an idea of the availability of identified products and explore export potential. Adoption of the hub and spoke model for identified products can help create export hubs at places in the region well connected with highways, railways, airways, and waterways. Aligning these hubs with integrated check posts, land customs stations, and sea ports in Bangladesh and Myanmar is critical to ensuring the smooth flow of products and services to identified markets in the neighbouring countries and other global markets through these countries. It is high time for stakeholders in the region to stop being complacent about exports and start focusing on improving export preparedness. The NITI Aayog’s Export Preparedness Index can be a useful guide for the North-Eastern states to identify bottlenecks and improve their export ecosystem.