The focus of the new policy on reducing points of friction across the system is unmistakable

Source– The post is based on the article “The focus of the new policy on reducing points of friction across the system is unmistakable” published in “The Indian Express” on 1st April 2023.

Syllabus: GS3- Indian economy

Relevance– External sector of the economy

News– Recently, the Foreign Trade Policy 2023 was unveiled by the Union government.

What are the aims of the new trade policy?

Shift from an incentive to a tax remission-based regime.

Improve the ease of doing business.

Promote exports through collaborations.

Focus on emerging areas.

The government has articulated the goal of achieving $2 trillion in export of goods and services by 2030.

What are the focus areas of the new policy?

The focus of the new policy is on reducing points of friction across the system. The measures focus on providing automatic approvals for various permissions.

For instance, the processing time for revalidation of various authorisations, which currently ranges from three days to one month, is expected to be brought down to one day.

Facilitation of e-commerce exports, widening the basket covered under RODTEP are also the focus areas.

Other thrust areas of the policy are steps being taken to boost manufacturing, rationalising the thresholds for recognition of exporters, merchanting trade reform, and greater use of the rupee in international trade.

Further, a one-time amnesty scheme has been introduced that aims at faster resolution of trade disputes.

What is the way forward for better implementation of the policy?

India accounts for a minuscule portion of global trade. Its share in global merchandise exports stands at around 1.8%, while that in services is roughly 4%. There is considerable scope for improvement for the country on this count.

The new policy needs to be supplemented with other measures to boost the country’s trade performance. These range from lowering import tariffs and ensuring a competitive exchange rate to signing broader and deeper free trade agreements.