Our new foreign trade policy is transformational and futuristic

Source: The post is based on the article “Our new foreign trade policy is transformational and futuristic” published in the Livemint on 6th April 2023.

Syllabus: GS – 3: changes in industrial policy and their effects on industrial growth.

Relevance: About new Foreign Trade Policy 2023 (FTP 2023).

News: Recently, the government unveiled a new Foreign Trade Policy (FTP).

What are the salient features of India’s FTP 2023?

Lending export competitiveness to Indian products is the key focus of the new policy. It aims to ease taxation and operations along the entire trade cycle.

How this FTP 2023 is different from previous ones?

What are the challenges associated with the FTP 2023?

What are the potential benefits of the FTP?

-Targeted interventions have already resulted in exports of electronic goods jumping by 162% from $6 billion in 2015-16 to $16 billion in 2021-22, of engineering goods by 81% and of toys by 89%. The FTP will further improve this.

-Expanding India’s self-ratification scheme for fixing input-output norms to two-star and above status holders will reduce operational hassles for exporters. The export-performance threshold for recognition of status has also lowered significantly.

-India is the world’s largest milk producer, with a 24% global share of milk production but less than 0.5 % of world dairy exports. So, special measures have been taken to support the dairy industry in upgrading technology through an exemption from export obligations.

-The latest FTP provides for reduced export obligations for battery electric vehicles, vertical farming equipment, wastewater treatment and recycling, rainwater harvesting systems and green-technology products. This will promote sustainability and climate change mitigation.

-Internationalization of trade in the Indian rupee will also promote exports.

-The FTP encourages active participation by Indian states and also Indian missions abroad for market identification, facilitating the entry of Indian products to overseas markets, marking a strategic transformation in India’s export strategy.