Syllabus: GS: III & V: Infrastructure

Why in the news?

The NITI Aayog released the Export Preparedness Index (EPI) 2024, which flagged structural deficiencies in Assam’s export sector, while also identifying new growth opportunities that could help the state emerge as a regional export hub.

What the EPI 2024 reveals about Assam

• Infrastructure progress acknowledged: Expansion of roads, railways, and inland waterways has improved physical connectivity.
• Logistics efficiency remains weak: Poor warehousing, limited cold storage, congestion, and high handling costs reduce competitiveness.
• Narrow export base: Tea alone accounts for nearly 50% of Assam’s merchandise exports, exposing the state to global price and climate risks.
• Agriculture-heavy workforce: Over 70% of workers are engaged in agriculture, limiting industrial diversification and value addition.

Business ecosystem: the weakest link

• Assam’s poor ranking in the business ecosystem pillar drags down its overall EPI score.
• Key issues include:
  • High fiscal deficit and debt burden
  • Limited access to credit, especially in remote areas
  • Slow loan disbursal for Micro, Small and Medium Enterprises
  • Low awareness of government export-linked schemes
• The report stresses that ease of doing business, skilled labour, and access to finance are central to export success.

Critical infrastructure and institutional gaps

• Energy constraints: Limited installed and captive power capacity restricts industrial growth.
• Testing and certification bottleneck: Acute shortage of National Accreditation Board for Testing and Calibration Laboratories-accredited and Export Inspection Council-approved labs for tea and agri-products.
  • Exporters depend on labs in Kolkata and Hyderabad, increasing cost and delay, especially for small enterprises.
• Digital lag: Slow adoption of digital export documentation and procedures weakens alignment with global trade practices.

Emerging opportunities highlighted by EPI

• Strategic trade planning: Assam has 13 export roadmaps, among the highest in India, reflecting strong institutional intent.
• High-tech manufacturing: The Tata Group’s outsourced semiconductor assembly and testing facility at Jagiroad positions Assam as a future electronics export node.
• Geographical Indication products: Muga silk, Joha rice, and Assam Orthodox tea can drive exports if supported by branding, certification, and market linkages.

The way forward

• Diversify beyond tea through value-added agro-processing and manufacturing.
• Expand accredited testing infrastructure within the state.
• Improve logistics, power availability, and digital trade systems.
• Push banks for faster credit flow and wider scheme awareness.
• Ensure exporters follow formal trade channels and standard procedures to build trust and transparency.

One-line wrap

Assam can become an export hub only by diversifying beyond tea, fixing logistics and certification gaps, and strengthening its business ecosystem.

Exam Hook

Key Takeaways

• Export competitiveness depends as much on institutions and logistics as on production.
• Over-reliance on a single commodity weakens export resilience.
• Testing, certification, and digital systems are critical links in global trade.

Mains Question

“The Export Preparedness Index 2024 highlights both structural constraints and emerging opportunities for Assam.” Examine the challenges and suggest a roadmap to make Assam a sustainable export hub.

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