An efficient Foreign Trade Policy is one of the crucial and economic driving policies of any country.
A new foreign trade policy (FTP) has been released by the Government of India with a target to enhance the country’s exports to a tune of USD 2 trillion by 2030. The new FTP came into effect from April 01, 2023, shifting its paradigm to remission and entitlement based regime from incentives based regime.
Another highlight of this new FTP is that the policy has no end, that is not the case with prior FTPs as traditional practice each FTP would come with a tenure of five years. New FTP will be updated by the central government from time to time as and when required to meet the changing equations of trade at regional and international level.
Prior FTP came into effect in April 01, 2015, but it got extended several times (last extension being given in September, 2022 to March 31, 2023) due to the economic crisis resulted as a consequence of the covid 19. Exceptional growth was registered in the area of Merchandise and Services Exports during prior FTP period spanning (April, 2015 to March, 2023).
Key features of new FTP are as follows:
1) Making Indian rupee as a global currency is one of major goals of new FTP – Further central government is also making all efforts to explore available options and to make other countries to agree to trade with India in rupees.
2) Equipping Department of Commerce with innovative and advanced tools and systems to deal with all future challenges.
3) Providing a great platform for trade with adoption of technology, automation and continuous re-engineering process.
4) Primary focus on emerging trade areas in export segment via promoting significant collaboration between key players involved in the export segment.
5) Faridabad, Moradabad, Mirzapur and Varanasi are identified as new Towns of Export Excellence (TEE) – Which takes the total count of TEEs to 43. Advantage of TEEs is that industrial units which are part of TEE will have a chance to get a recognition at global level.
6) TEE are aimed to maximum the economic potential of these cities by enabling them to scale up in the economic aspect by tapping new economic avenues. Another advantage of industrial units which are part of TEE is that they could get financial support to explore diversified trade fairs to get exposure to new economic opportunities.
7) Growth of e-commerce exports projected to be at USD 200-300 billion by 2030 – Further, e-commerce exports to receive the FTP benefits.
8) Indian intermediaries permitted to be part of merchandize trading with involvement of trade from one foreign country to another foreign country without touching Indian ports – Items covered under CITES and SCOMET list are exempted from this.
9) Automation of approval process under FTP to simplify approval process with a significant reduction in time lines with a aim to provide appropriate approvals in day or two. Further paperless filing systems is extended to authorisation redemption applications
10) Significant reduction in application fees for Advance Authorization and EPCG Schemes to benefit MSMEs as more than 55 to 60% of the applicants are MSMEs.
11) Value for exports through courier service increased to Rs 10 lakh per consignment – Earlier such value limit was capped at INR 5 lakhs.
12) Rationalization of Status Holder Export Threshold to enabling more exporters to achieve higher status and reduced transaction cost for exports.
13) Enabling States and Districts to be partners of export segment to identify products of global reach. Involvement of states and districts will make administration more efficient at state and district level and take exports administration to new efficient level.
14) Core objective of inclusion of Districts in the exports segment is to educate on and empower the district level authorities to:
a) Identify new exports and new economic opportunities
b) Promote awareness among exporters (existing or potential) about training and financial assistance programs
c) Work on creation of branding, packaging, design and marketing of identified products and services.
15) Green technology products extended to Green Hydrogen, all type of Battery Electric Vehicles (BEV), Wastewater Treatment and Recycling, Rainwater harvesting system and Rainwater Filters, and Vertical Farming equipment – These products are eligible to reduced Export Obligation requirement under EPCG Scheme.
16) Development of warehousing facility to ensure adequate infrastructure is developed to facilitate storage and return processing of products.
17) Transportation and logistics are key aspects which requires a special focus to ensure smooth transportation of exports to destination points without any impediment. Special focus is placed on improving logistics supply chain to ensure transportation of exports does not have any impediment.
18) National wide operation of Dak Ghar Niryat Kendras to work in a hub-and-spoke model with Foreign Post Offices (FPOs). This national wide operation is aimed to facilitate cross-border e-Commerce and to enable local and remote exporters to reach international markets.
19) PM MITRA scheme is launched to claim benefits under CSP(Common Service Provider) Scheme of Export Promotion capital Goods Scheme(EPCG).
20) To promote dairy sector to upgrade the technology, it is exempted from maintaining Average Export Obligation.
21) Amnesty scheme (available until 30.09.2023) introduced as a one-time settlement of default (excluding cases of fraud and diversion) in export obligation.
22)Consolidated Policy for export of dual use items under (Special Chemicals, Organisms, Materials, Equipment and Technologies) SCOMET for ease of understanding and compliance by industry.
23)SCOMET policy is aimed at ensuring trade control with respect to sensitive and dual use items on par with international commitments under various international regimes.
Source : pib.gov.in
