03 April 2023 • 9 min read
India's Foreign Trade Policy 2023
In order to help exporters, overcome their problems, the government is firmly devoted to reducing litigation and encouraging relationships built on trust.
The Foreign Trade Policy (FTP) 2023 has been announced by the Indian government, which claimed that it was flexible and maintained open-ended to meet any future demands. The policy was developed following extensive stakeholder discussions and has been under discussion for quite some time. India's total exports, which include both services and goods, have now surpassed US$ 750 billion for the financial year 2022-23.
These 4 pillars serve as the foundation for the policy's main approach:
- Incentives for remission
- Promoting exports through partnerships with exporters, states, districts, and Indian missions
- Business ease, lower transaction costs, e-initiatives, and
- Developing markets: E-Commerce, enhancing Special Chemicals, Organism, Materials, Equipment and Technologies (SCOMET) policy and developing districts as export hubs.
The FTP 2023 is a document that outlines policy. It is based on the continuation of tested export facilitation programmes. Its foundation is faith in and partnership with exporters.
Process Re-Engineering and Automation
Using automated IT systems with risk management features for multiple clearances in the new FTP, exporters are gaining more trust. The policy places a strong emphasis on export development and promotion, shifting from an incentive system to one that facilitates trade and is founded on concepts of cooperation and technological interface.
Given the success of some current programmes like Advance Authorization, EPCG, and others under FTP 2015–20, they will be maintained with significant process re-engineering and technological advancement to assist exporters.
FTP 2023 expands on "ease of doing business" initiatives by arranging implementation procedures in a paperless, online environment. It will be simpler for MSMEs and others to receive export benefits thanks to reduced fee structures and IT-based programmes.
Towns of Export Excellence
Together with the already existing 39 towns, four additional towns—Varanasi, Mirzapur, Faridabad and Moradabad —have been named Towns of Export Excellence (TEE). The TEEs will have priority access to finance for export promotion, and under the EPCG Scheme they will be eligible for Common Service Provider (CSP) incentives for export fulfilment. It is anticipated that this development will increase exports of carpets, handicrafts, and loom-made goods.
Recognition of Exporters
Exporter companies having "status" based on export performance will now participate as partners in capacity-building projects using their best efforts. Similar to the "each one teaches one" project, those with 2-star status and higher would be urged to give interested parties trade-related training based on a sample curriculum. This will assist India in creating a trained labour pool that can support a $5 trillion economy before 2030. In order to increase the number of exporting companies that receive 4 and 5-star ratings, status recognition requirements have been re-calibrated. This has improved branding potential in export markets.
Promoting Export from the Districts
The FTP seeks to establish relationships with State governments and advance the Districts as Export Hubs (DEH) programme, which seeks to encourage exports at the district level and hasten the growth of the informal trade ecosystem. The State Export Promotion Committee and District Export Promotion Committee at the State and District levels, respectively, will serve as the institutional vehicle for efforts to identify export-worthy goods and services and address issues at the district level. Each district will have its own export action plan, defining its unique approach to promoting the export of specified goods and services.
Facilitation Under Export Promotion of Capital Goods (EPCG) Scheme
The EPCG Program, which permits import of capital items at zero Customs charge for export production, is currently being streamlined further. The CSP (Common Service Provider) Scheme of EPCG now includes the Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme as an extra scheme that is eligible to receive benefits (EPCG).