Telangana Emerges as 8th Best State in Exports, Says NITI Aayog Index

Hyderabad: Telangana has emerged as the top eighth state in terms of encouraging exports in the country with a score of 57.14, says the Niti Aayog’s fourth Export Preparedness Index (EPI) 2024 report.

The report, which was released on Wednesday, placed Maharashtra as the best state in the country in export preparedness, with a score of 68.01. The score was based on the state’s policy, infrastructure, business environment, and export performance.

According to the EPI report, Telangana’s industrial strength is anchored by its globally recognised pharmaceutical hubs, mature industrial clusters, skilled workforce, and a vibrant start-up ecosystem that has positioned the state as a major life sciences and innovation destination.

“Flagship facilities such as Genome Valley and the MedTech Park have established Telangana as a life sciences leader, contributing about 32 per cent to India’s pharmaceutical output and hosting over 800 companies, which has created a strong manufacturing and research backbone.”

The state has also developed established industrial clusters in electronics, aerospace, automotive, textiles, and food processing across regions including Zaheerabad, Warangal, and Mahbubnagar, supported by reliable infrastructure, investor-friendly policies, and industrial parks.

The presence of premier technical institutions has strengthened the availability of a technically-skilled workforce, while the start-up ecosystem provides innovation support, mentoring, and access to funding. These factors together have created a conducive environment for entrepreneurship, technology-driven growth, and export-oriented industries.

The report identified strong opportunities for Telangana in high-growth, export-oriented sectors. In electric vehicle manufacturing, the state aims to attract investments of Rs.33,472 crore and generate about 1.2 lakh jobs by 2030, supported by dedicated EV clusters, testing facilities, and favourable policies.

The aerospace and defence sector has emerged as a major driver, contributing 31 per cent of the state’s exports, valued at $3.61 billion between April and December 2024, led by hubs such as the Adibatla SEZ and Hyderabad Aerospace Park.

Telangana is also transitioning from being a Global Capability Centre hub to a Global Value Chain hub, with over 355 GCCs employing more than three lakh professionals in advanced research and development.

In agriculture exports, initiatives such as mega food parks, agri export zones, and PM-FME are enhancing value addition, while improved cold chain logistics and market linkages are expected to boost agri exports and stimulate regional development.

However, the report pointed out that despite consistent export growth, Telangana faces structural challenges that constrain its full potential. Land acquisition hurdles, including regulatory delays, legal complexities, and local resistance, have slowed the progress of large-scale projects, thereby affecting investor confidence and project timelines.

The state’s landlocked geography and dependence on distant ports such as Krishnapatnam and Visakhapatnam, located about 600 to 700 km away, increase logistics costs and transit times, placing pressure on road and rail infrastructure.

Economic activity remains heavily concentrated around Hyderabad, while districts like Mulugu and Asifabad remain relatively underdeveloped, reflecting regional imbalances in infrastructure, investment, and skill development that hinder inclusive and broad-based growth.

It also warned of emerging threats, noting that Telangana’s export profile remains heavily tilted towards IT and service exports, leaving merchandise exports relatively underdeveloped and reducing diversification. Rising competition from countries like Vietnam, Thailand, and Bangladesh is eroding competitiveness in sectors such as rice, textiles, and light manufacturing due to their lower production costs and stronger trade linkages.

The concentration of nearly 28 per cent of Telangana’s total exports in the United States also exposes the state to risks from tariff hikes, protectionist measures, and geopolitical uncertainties, underscoring the need for market diversification and a stronger manufacturing-led export strategy.