Foreign Trade Policy 2023 unveiled, govt breaks tradition of target year
Mar 31, 2023
Unveiling the much-awaited Foreign Trade Policy, Commerce Ministry on Friday broke the tradition of a policy lasting for five years and will instead focus on 'long term'. There is no end date to the policy and will be updated as and when necessary, the ministry said. Further, Faridabad, Moradabad, Mirzapur and Varanasi have been declared as towns of export excellence.
Unveiling the much-awaited Foreign Trade Policy, Commerce Ministry on Friday broke the tradition of a policy lasting for five years and will instead adopt a 'long-term' focus. There is no end date to the policy and will be updated as and when necessary, the ministry said.
Further, the new policy will be shifting from incentives to a remission and entitlement-based regime.
"The policy will be dynamic. There is no end date to ensure when we have feedback, we will keep changing this document and update it. If there is a sector which feels this FTP does not have anything for them, don't feel disappointed," Santosh Sarangi, Director General of Foreign Trade (DGFT) said.
A consultative mechanism to address the concerns of trade will be put in, he added.
The FTP benefits have been extended to e-commerce exports, which are estimated to grow to USD 200-300 billion by 2030. The value limit for exports through courier service is being increased from Rs 5 lakh to Rs 10 lakh per consignment, he said.
The new FTP also seeks to make the Indian rupee a global currency and allow international trade settlement in the domestic currency. The DGFT said that the overall exports, inclusive of merchandise and services, are likely to touch $770 billion in FY23, against $676 billion in FY22.
"We will undertake a massive outreach globally in the next four months to boost exports," Union Minister Piyush Goyal said.
The policy seeks to encourage e-commerce exports which is expected to grow to $200-300 bn by 2023. An amnesty scheme for one-time settlement of default in export obligation has also been introduced.
Further, Faridabad, Moradabad, Mirzapur and Varanasi have been declared as towns of export excellence.
Top takeaways from the policy:
- FTP to provide the policy continuity and a responsive framework
- Approach of FTP: From Incentive to Remission
- Introduces scheme for remission of duties, taxes and govt levies on export goods
- Digitisation of applications pertaining to FTP
- Automatic system-based approval of FTP applications
- Pilot introduced for cutting processing of applications related to advance authorisation to 1 day
- Norms for recognition as Star Trading Houses eased
- Promotes trade in Indian Rupee
- Introduces provisions for merchanting trade
- Dairy sector to be exempted from maintaining average export obligation * Battery electric vehicles; vertical farming equipment & green hydrogen eligible for reduced obligation under
- Export Promotion Capital Goods (EPCG) scheme
- Special advance authorization scheme extended for apparel & clothing sector
- Extends all FTP benefits to e-commerce exports
- Value limit for exports through courier service increased from Rs 5 lakh to Rs 10 lakh per consignment
- Focus on engaging with states & districts through Districts as Export Hubs initiative
- Aims at streamlining export of dual use items under SCOMET policy
- Introduces amnesty scheme for one-time settlement of default in export obligation by advance authorisation and EPCG authorisation holders
- FTP to be dynamic and responsive to the emerging trade scenario
- Restructuring of Department of Commerce on the anvil to make it future-ready
India's new policy will also automate some trade approvals and cut charges for medium-sized and small businesses to secure some government-backed benefits.
The current foreign trade policy (2015-20) is in force till March 31, 2022. The term of the previous five year policy had ended in March 2020. However, it has been extended repeatedly in wake of Covid outbreak and resulting lockdowns. The last extension was given in September 2022 till March 31, 2023.
India's trade has been hit by supply chain disruptions and slowdown in global trade amidst ongoing Russia-Ukraine war.
[The Economic Times]