Hyderabad: Prime Minister in his independence speech from Red Fort on 15 August, 2019 highlighted the importance of creating each district of every state to transform as an Export Hub. Since then, the Department of Commerce under the Director General of Foreign Trade has taken initiatives to activate state governments and UTs to find the exportable products from each district and to provide a conducive environment and also to create the institutional mechanism to facilitate the exports from respective districts.
Though Andhra Pradesh is strategically located and the gateway to East and Southeast Asia for the trade and commerce with the second longest coaster line of 974 Km, with 14 non-notified ports (5 functional) and one major port of Visakhapatnam, state has not encashed the export potential because of the non-conducive environment of the previous government.
Instead of government support to exporters, the ruling party ministers / prominent leaders used to give a threat to some exporters demanding ransom or share in their exportable products. With these kind of activities, export growth and industrial growth have taken a back seat.
Many industries / establishments which were supposed to take birth in Andhra Pradesh has diverted their investments to neighbouring states. We have seen that their own party leaders were not able to face such harassment by bureaucrats and local leaders, they have shifted their establishments to neighboring states.
Andhra Pradesh state contributes to 4.4% share in India’s exports with Rs. 1,59,368.02 Cr in 2022-23 while it was 4.57% during 2022-22 as per ministry of commerces state wise export data, while Gujarat stand at No.1 with 33.4%, Maharastra with 16.06% at 2nd position and Tamil Nadu at 3rd position with 9.02% as top 3 states during 2022-23.
During the last regime of Sri N Chandra Babu Naidu set a vision of making Andhra Pradesh to be among top 3 best states by 2022 could not be seen because of change of his Government. Now with the new government under his leadership we expect to see his vision of making a developed state by 2029.
As per the Neeti Ayog 3rd edition of Export Preparedness Index of 2022 published during July 2023 shows, Andhra Pradesh is standing at 8th rank with a score of 59.27 being a coastal state, while Telangana stands at 6th rank with a score of 61.63 being a landlocked state.
Andhra Pradesh is rich in diverse natural resources, including fertile agricultural land, mineral deposits, and a long coastline suitable for fisheries. This resource abundance presents opportunities for export-oriented sectors such as agriculture, food processing, mining, pharmaceuticals, and aquaculture.
With a strong agricultural base with a wide range of crops, including rice, cotton, spices, fruits, and vegetables. The state's favorable agro-climatic conditions and irrigation infrastructure support high agricultural productivity.
Just to talk about some of the areas in and around Visakhapatnam, this district has established itself as a major industrial and export hub in Andhra Pradesh with a major sea port. The district's key export sectors include pharmaceuticals, chemicals, seafood, textiles, jaggery, cashew and automotive components.
East and West Godavari has a strong agricultural base and is a significant contributor to Andhra Pradesh's food and agro-processing sector. These district's major exports include rice, seafood, edible oils, coconut, banana, coir , lace, human hair and spices.
Krishna district's major exports comprise rice, fruits including Mango, vegetables, processed food products, Kalamkari and textiles, imitation jewelry. Guntur district is renowned for its chili production and is a major exporter of cotton, Red Chillies, Turmeric and spices. Other prominent sectors in the district include textiles, tobacco, and engineering goods.
Ongole and Prakash districts contribute granite and slabs, spices and acqua. Nellore is contributing with rice, seafood processing, various minerals like quartz, feldspar, limestone etc.
Chittoor district with a diverse range of export-oriented sectors, majorly Mango pulp and food processing, textiles, granite, leather products, electronics, and automobile parts. Anantapur, Kadapa has a potential of millets, fruits like banana, tomatoes, textiles, and various minerals and its processed minerals which has good potential for exports. Likewise from all districts a lot of products are contributing directly or indirectly to the export basket.
Also, the State has industrial infrastructure development, including industrial parks, special economic zones (SEZs), and dedicated manufacturing clusters. These infrastructure initiatives had a conducive environment for export-oriented industries to set up operations. Despite the immense potential and favourable conditions, Andhra Pradesh has struggled to achieve significant export growth in recent years as the focus on exports was neglected by the previous Govt. Now it is going to be the biggest challenge for the new Government to build the state industrial and export growth from scratch like building the state capital again from scratch.
Challenges:
The new Government needs to address several challenges and barriers to increase its Andhra Pradesh export share. Some of the key challenges include: Improvement in upgrading transportation networks, including roads, railways, and ports, is crucial for efficient movement of goods. Developing specialized export-oriented infrastructure, such as logistics parks and cold storage facilities, can enhance the state's export competitiveness. Lack of sector-specific policies and incentives to address the unique challenges faced by different export sectors. Tailored policies for agriculture, textiles, pharmaceuticals, electronics, auto components and other key industries can stimulate growth and competitiveness. None of the ministers in the previous government focussed on their respective departments and never addressed the press about the developments in their ministry. Every minister used to address the press to blame and scold the opposition leaders only. This is their portfolio as Sector specific.
Though Andhra Pradesh was ranking in top on ease of doing business, no such significant investments were attracted mainly due to bureaucratic hurdles, and demands of the politicians in their respective areas. It was also pointed out by some of the economists that officials have manipulated the figures to gain the high ranking in all the central government reports. As such there is no real development and growth was witnessed by the trade and industry of Andhra Pradesh.
Under the previous government, there was a lack of effective trade promotion strategies to expand market access for Andhra Pradesh's exports. Inadequate engagement in bilateral and multilateral trade agreements limited the state's ability to tap into new markets and establish stronger trade relationships. Insufficient support for participation in international exhibitions, trade fairs, and trade delegations further restricted the exposure and visibility of Andhra Pradesh's export products.
The new Government should learn from the mistakes done by the previous government and focus has to be given to bring the export growth of Andhra Pradesh on a track. In fact, Andhra Pradesh has excellent product profiles from all 26 districts which can be exported to about 200 countries. Under the Export Hubs initiative by Govt. of India, under the Ministry of commerce, a list of products has been finalized from each district of the state by the earlier Government as per central directions and further export initiative has been taken up. If we look at the product profile every district has highly potential products for exports and all are contributing to India’s exports. State should focus on the champion sectors like Marine & Sea Food products, Pharma & Formulations, Granite and Mineral based industries, Organic Chemicals, Iron & Steel, Ship and Boat floating structures, rice and cereals, spices and coffee, Auto Components and engineering products, Imitation jewellery etc. Apart from these sectors, there is a big scope for the Readymade Garments, Food processing, Electronic components.
Some of the recommendations to the New Government for Export Promotion: Setting up of a state level committee for officials and the experts from respective sectors with a state level coordination committee with the officials of state and DGFT to resolve the issues related to export promotion. There is a dire need to develop and increase the warehousing capacity in the state to meet the growing demand of agri products storage. Developing Multi Model Logistics Hubs to make Andhra Pradesh as Logistic Hub under the central scheme of National Highway Logistics Management Ltd. Inland Container depots and import port connectivity. Earlier left out, the ambition of the TDP government of making all the 14 ports operational to increase the waterways transport under Sagar Mala Project is also to be revived.
Also reactivating the International Air Cargo facilities from all the airports of Andhra Pradesh can give a leverage to enhance the exports through Air. Otherwise as of now those shipments are going to Chennai or Hyderabad. Also diversifying its export markets to reduce reliance on a few destinations. Expanding into new markets requires market research, trade missions, and promotional activities to raise awareness about the state's products. This can be achieved with the close coordination of the export promotion councils present in the state like APEDA, MPEDA, FIEO, SPICE BOARD, TOBACCO BOARD to give awareness and training to the respective aspiring exporters.
Organizing access to export financing and insurance in collaboration with financial institutions and export credit agencies can provide affordable and accessible financing options for exporters. Promoting export credit insurance schemes can mitigate risks associated with international trade and provide assurance to exporters. Conducting Investors meets for “INVEST IN ANDHRA PRADESH” like it was done earlier to invite new industries and international companies to establish their export manufacturing facilities which contributes to state exports.
Andhra Pradesh should encourage collaboration between industry and academia, provide grants for R&D projects, and establish technology incubation centers to support innovation and product development in export-oriented industries and also skill development as per the industry based Demanding Ministry of Commerce to recognise GUNTUR for Chillies and Cheemakurti / Ongole for the Granite as town of excellence, under Foreign Trade Policy, which funds the location for the infrastructure for common facility centre, exhibition centre and various provisions for the development of the respective sectors.
To meet the evolving demands of export-oriented industries there is a need for continuous skill development initiatives. Focus should be placed on providing industry-relevant training, enhancing vocational education, and fostering innovation and entrepreneurship. Bridging the skill gap will enable industries to enhance productivity, quality, and innovation, thereby improving their competitiveness in global markets. By leveraging these resources effectively, Andhra Pradesh can enhance its export competitiveness in these sectors.
(The author is Founder & CEO Global EXIM Institute)
