India Unveils New Foreign Trade Policy 2023–28 To Boost Exports

On March 31, 2023, India broke with convention and presented its eagerly anticipated new Foreign Trade Policy (FTP) 2023–28 in an effort to increase exports in the face of a weakening global economy. The current FTP 2015-20 expires on March 31, 2023, and has been frequently extended at the industry's request because of international threats like the Covid-19 epidemic and the Ukrainian conflict. In September 2022, the most recent extension—to March 31 of 2023—was given.

What is a Foreign Trade Policy?

Foreign Trade Policy is a complex framework designed to boost exports of products and services, create jobs, and boost value addition in the nation. Its main objective is to promote both the manufacturing and services sectors, with a focus on enhancing business accessibility. The policy was established by the Directorate General of Foreign Trade (DGFT), the ministry of commerce and industry's governing body for the promotion and facilitation of exports and imports. It places a strong emphasis on adopting a twin strategy of promoting traditional and emerging export sectors, including services.

???? ?? ??????? ?? ?? ????? ??????? ???? 2023-28 ?? ?????? ????

The Aim of the New Trade Policy 2023

The new trade policy has four objectives: to move from an incentive-based system to one based on tax remissions, to enhance the ease of doing business, to increase exports through partnerships, and to concentrate on emerging markets. In contrast to the $900 billion aim that the previous strategy had planned to reach by 2020, the government has now stated that it wants to export $2 trillion worth of goods and services by 2030. India's overall exports are anticipated to reach $760 billion by the end of 2022–2033, up from $676 billion in 2021–2022.

India’s New Foreign Policy 2023

The FTP 2023 will accelerate the expansion of exports from e-commerce, which are anticipated to reach $200–300 billion by 2023. An amnesty scheme is included in the Foreign Trade Plan 2023–28 for the one-time resolution of export requirement defaults. Under the new foreign trade policy, the dairy industry will be exempt from maintaining average export obligations, and textiles and clothes now fall under a special advance authorization procedure. Under the new FTP, locations including Faridabad, Moradabad, Mirzapur, and Varanasi have been named as new Towns of Export Excellence (TEE). According to the new legislation, the value of exports made through courier services has increased from Rs 5 lakh per cargo to Rs 10 lakh. The Ministry guarantees that this policy will be regularly amended and will not expire. The new FTP will enable rupee payments for foreign trade and aims to internationalise domestic currency.

Sectors that will Benefit from the New FTP

• PM Mega Integrated Textile Region and Apparel Parks is another CSP-eligible programme.
• The dairy industry will not be required to continue meeting the average export obligation.
• Equipment for vertical farming and battery-powered cars are included in the green technology product.
• Green technology goods now include rainwater collection systems, wastewater treatment, and recycling.
• Products utilising green technology now include rainwater filters and green hydrogen.
• Under the EPCG scheme, green technology items are eligible for lower export obligation requirements.

The Way Forward New FTP

There is a lot of room for improvement for the nation on this front, even though this policy is implemented at a time when there is a lot of uncertainty around the world. India accounts for a very small portion of global trade (its share in global merchandise exports is around 1.8%, while that in services is roughly 4%). To improve the nation's trade performance, the new policy needs to be complemented with other measures. Reduced import duties, a competitive exchange rate, and the negotiation of wider and more comprehensive free trade agreements are only a few of these.