Centre launches Foreign Trade Policy 2023, aims $2 trillion exports by 2030
The policy will continue to adopt consultative approach to resolve issues of trade and Industry with wider participation of states and districts in promoting exports from the grassroots
India on Friday launched a “dynamic and responsive” Foreign Trade Policy (FTP) without any sunset clause that will be effective from April 1 with an aim to achieve $2 trillion goods and services exports by 2030 while encouraging trade settlements in rupee and adhere to the global principle that duties should not be exported.
Unveiling the new FTP, commerce minister Piyush Goyal pointed at the highly dynamic nature of global markets that require quick policy response. Hence, the new trade policy is nibble and does not come with a five-year expiry date, government officials said.
The current FTP 2015-20 – which expires on March 31, 2023 after having extended several times on demand of the industry because of global uncertainties such as Covid-19 pandemic and the Ukraine war.
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The new trade policy is taking forward the government’s ongoing efforts to boost exports, the minister said.
The policy will continue to adopt consultative approach to resolve issues of trade and Industry with wider participation of states and districts in promoting exports from the grassroots, he added.
He said India does not bank on subsidies to push its exports, and it will leverage its strength to achieve higher goals.
Goyal said despite global headwinds India is all set to cross $760 billion goods and services exports in 2022-23, which will be a new record.
The minister expressed confidence in crossing the $2 trillion exports by 2023 based on the new policy approach but asked the industry to focus on merchandise exports so that they do not lag behind fast growing service exports.
Besides merchandise and services exports, the FTP 2023 is also focusing on new sectors such as e-commerce, providing all benefits to exports through e-commerce. It increased the value limit for exports through courier service from ₹5 lakh to ₹10 lakh per consignment.
The government may soon frame guidelines in consultation with all stakeholders to facilitate exports through e-commerce.
Directorate General of Foreign Trade director general Santosh Kumar Sarangi said that the e-commerce exports has a potential to grow to $200-300 billion by 2030.
FTP 2023 will continue duty-free imports of inputs and raw materials from overseas suppliers through advance authorisation. It also streamlined special chemicals, organisms, materials, equipment and technologies (SCOMET) at one place for ease of understanding and compliance by the industry.
SCOMET policy emphasizes India’s export control in line with its international commitments under various export control regimes. The focus is on simplifying policies to facilitate export of dual use high end goods and technology such as UAV, drones, cryogenic tanks, and certain chemicals.
The new FTP has focused on the ease of doing business through paperless regulation and rule-based automatic approval systems. It also rationalised export performance threshold to enable more beneficiaries to achieve higher recognition and reduce transaction cost for exports, for example, qualifying criterion for a five-star exporter has been reduced from $2 billion to $800 million.
FTP 2023 announced four new Towns of Export Excellence (TEE) – Faridabad for apparel, Moradabad for handicrafts, Mirzapur for handmade carpets, and Varanasi for handloom and handicrafts – which are in addition to the already existing 39 towns of export excellence. The facility helps in global recognition, provides financial assistance for marketing, and offers common service provider (CSP) facility that helps in increasing competitiveness of entire cluster by enabling common use of capital goods for exports. The policy also recommends restructuring of the Department of Commerce to make it future ready.
Abhishek Jain, tax partner at consultancy firm KPMG said: “The launch of the new Foreign Trade Policy 2023 was being watched closely by the industry and the new FTP seems to be largely appreciated by the stakeholders.”
“Continuation of schemes such as Advance Authorisation, EPCG with procedural ease will continue to promote exports from India and foster ease of doing business. Requisite thrust has been provided to emerging sectors including battery vehicles, e-commerce and merchanting trade. Another big item has been the launch of Amnesty Scheme which should be leveraged by various exporters. Lastly, for sectors/ industries having unresolved expectations/issues, timely representations should be filed so as to ensure updations in policy,” he said.