On March 31, 2023, the Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal, launched the Foreign Trade Policy (FTP) 2023.
The policy is based on continuity and adaptability to facilitate exports and is responsive to emerging situations.
The FTP 2023 is aimed at process re-engineering, automation to facilitate ease of doing business for exporters, dual-use high-end technology items under SCOMET, and e-commerce exports.
The policy document is based on principles of ‘trust’ and ‘partnership’ with exporters, and every opportunity for export must be captured and utilized effectively.
Four Pillars
The FTP 2023 is based on four pillars: Incentive to Remission, Export promotion through collaboration – Exporters, States, Districts, Indian Missions, Ease of doing business, reduction in transaction cost, and e-initiatives and Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy. T
he policy emphasizes export promotion and development, moving away from an incentive regime to a regime that is facilitating, based on technology interface, and principles of collaboration.
The policy aims to facilitate ease of doing business for exporters. Greater faith is being reposed on exporters through automated IT systems with a risk management system for various approvals in the new FTP.
The policy emphasizes export promotion and development, moving away from an incentive regime to a regime which is facilitating, based on technology interface, and principles of collaboration.
Duty exemption schemes for export production will now be implemented through Regional Offices in a rule-based IT system environment, eliminating the need for manual interface. During the FY23-24, all processes under the Advance and EPCG Schemes, including issue, re-validation, and EO extension, will be covered in a phased manner.
Towns of Export Excellence
The policy encourages recognition of new towns through “Towns of Export Excellence Scheme” and exporters through “Status Holder Scheme”. The FTP 2023 is facilitating exports by streamlining the popular Advance Authorization and EPCG schemes, and enabling merchanting trade from India.
Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns.
The TEEs will have priority access to export promotion funds under the MAI scheme and will be able to avail Common Service Provider (CSP) benefits for export fulfillment under the EPCG Scheme. This addition is expected to boost the exports of handlooms, handicrafts, and carpets.
Exporter firms recognized with ‘status’ based on export performance will now be partners in capacity-building initiatives on a best-endeavor basis.
Similar to the ‘each one teach one’ initiative, 2-star and above status holders would be encouraged to provide trade-related skills, knowledge, and experience to MSMEs and other stakeholders to improve their competitiveness.
One-time Amnesty Scheme
The FTP 2023 is introducing a one-time Amnesty Scheme for exporters to close old pending authorizations and start afresh. This will help the exporters who may have some legacy issues or may have been unable to perform optimally for some reasons.
The policy recognizes the importance of emerging areas like dual-use high-end technology items under SCOMET, facilitating e-commerce export, collaborating with States and Districts for export promotion.
The FTP 2023 codifies implementation mechanisms in a paperless, online environment, building on earlier ‘ease of doing business’ initiatives. Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits.
The policy aims to increase exports and get more deeply involved in the global value chain.
E-commerce Export
The FTP 2023 recognizes the potential of e-commerce exports and aims to promote it through various measures like simplified procedures for export of low-value shipments, improving logistics, and creating awareness among MSMEs about the benefits of e-commerce exports.
Collaboration with States and Districts
The FTP 2023 aims to collaborate with States and Districts for export promotion. This will help in creating export hubs in various regions and will also help in promoting exports of region-specific products.
Conclusion
The launch of the Foreign Trade Policy 2023 is a significant step towards promoting exports and facilitating ease of doing business for exporters. The policy is based on the principles of trust and partnership with exporters and aims to streamline processes and promote emerging areas like e-commerce exports and high-end technology exports.
The policy also focuses on collaboration with States and Districts for export promotion and recognizes the potential of small towns in boosting exports.
The one-time Amnesty Scheme and streamlining of the SCOMET policy will also help in reducing the burden of litigation and promoting ease of doing business for exporters.
The policy is expected to give a boost to India’s exports and help in achieving the target of USD 1 trillion in exports by 2025.