Foreign Trade Policy 2023 announced

Source: The post is based on the following articles

• “Foreign Trade Policy 2023 announced” published in PIB on 31st March 2023
• “India aims for $2 tn in exports by 2030” published in Livemint on 1st April 2023
• “Foreign Trade Policy 2023 announced” published in PIB on 1st April 2023
• “Government vows swifter nod for exporters” and “FTP expands export promotion scheme to include PM MITRA” published in PIB on 1st April 2023 

What is the News?

The Union Minister of Commerce and Industry has launched the Foreign Trade Policy 2023.

What is Foreign Trade Policy 2023?

Foreign Trade Policy (2023) is a policy document which is based on continuity of time-tested schemes facilitating exports as well as a document which is nimble and responsive to the requirements of trade. It is based on principles of ‘trust’ and ‘partnership’ with exporters.

The policy is based on these 4 pillars: 1) Incentive to Remission, 2) Export promotion through collaboration – Exporters, States, Districts, Indian Missions, 3) Ease of doing business, reduction in transaction cost and e-initiatives and 4) Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy.

This policy comes after much delay as the last Foreign Trade Policy effective from 2015-20 saw four extensions amid major global supply chain disruptions such as covid-19 and the Russia-Ukraine war.

What are the key features of the Foreign Trade Policy 2023?

Process Re-Engineering and Automation: 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.

– Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits.

– 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.

Towns of Export Excellence: 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 Market Access Initiative (MAI) scheme.

– It will also be able to avail Common Service Provider (CSP) benefits for export fulfillment under the Export Promotion Capital Goods (EPCG) Scheme.

Recognition of Exporters: Exporter firms recognized with ‘status’ based on export performance will now be partners in capacity-building initiatives on a best-endeavour basis.

– 2-star and above status holders would be encouraged to provide trade-related training based on a model curriculum to interested individuals.

Promoting Export from the Districts: The FTP aims at building partnerships with State governments and taking forward the Districts as Export Hubs (DEH) initiative.

– This would promote exports at the district level and accelerate the development of the grassroots trade ecosystem.

Streamlining SCOMET Policy: India is placing more emphasis on the “export control” regime as its integration with export control regime countries strengthens.

– There is a wider outreach and understanding of SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) among stakeholders.

Facilitating E-Commerce Exports: E-commerce exports are a promising category that requires distinct policy interventions from traditional offline trade.

– Various estimates suggest India’s e-commerce export potential in the range of $200 to $300 billion by 2030.

– FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and related elements.

Facilitation under Advance authorization Scheme: Advance authorization Scheme accessed by Domestic Tariff Area (DTA) units provides duty-free import of raw materials for manufacturing export items.

– Based on interactions with industry and Export Promotion councils, certain facilitation provisions have been added in the FTP 2023.

Amnesty Scheme: Government is strongly committed to reducing litigation and fostering trust-based relationships to help alleviate the issues faced by exporters.

– In line with “Vivaad se Vishwaas” initiative, which sought to settle tax disputes amicably, the government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default on Export Obligations.

– This scheme is intended to provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations.