Govt announces measures for new FTP

Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal launched the Foreign Trade Policy 2023 last week. He stated that the policy is dynamic and has been kept open-ended to accommodate the emerging needs of the time. The policy has been under discussion for a long time and has been formulated after multiple stakeholder consultations. 

The new FTP aims to provide policy continuity and a responsive policy framework for promoting India’s exports of goods and services, according to DGFT notification. The key approach to the policy is based on 4 pillars, namely:

• Incentive to Remission 
• Export promotion through collaboration – Exporters, States, Districts, Indian Missions
• Ease of doing business, reduction in transaction cost and e-initiatives 
• Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) policy. 

MSMEs are being guaranteed a reduction in fee and approximately, 50-60% of the beneficiaries belong to this category. Previously, they were paying approximately INR 100,000 for their licenses, but now they will only have to pay INR 5000.

India’s economy remains in a relatively favourable position amidst global turmoil, with the highest GDP growth among comparable economies.

India’s overall exports, including services and merchandise exports, have already crossed US$ 750 billion and is expected to cross US$ 760 billion this year.  and the ambition of reaching US$ 2 trillion in exports by 2030 will be continuously pursued. The government is revising the export performance threshold, with a five-star export house now eligible to be recognized with a threshold of US$ 800 million of exports instead of the earlier US$ 2 trillion.

The government has also declared four new towns as Towns of Export Excellence (TEE), in addition to the 39 towns already approved. Union Commerce Minister Piyush Goyal further stated that flexibility in foreign trade policy would help grow India’s export potential and that the government would engage in massive trade outreach across the globe in terms of sectors and nations in the coming months.

There has been a greater thrust on emerging areas with huge export potential. All FTP benefits will be extended to e-commerce exports, including an increase in the value limit from INR 500,000 to INR 1 million. The policy has widened the basket covered under the Remission of Duties and Taxes on Exported Products (RoDTEP) and addressed the anomalies that exporters face. The policy also introduced an amnesty scheme for a one-time settlement of default in export obligations.

The FTP 2015-20 was extended until March 31, 2021, due to the pandemic and consequent lockdowns, with several other extensions granted due to the pandemic’s aftermath. The latest extension was granted in September 2022 until March 31, 2023. 

Source: Economic Times