Introduction:
In a move to boost India’s global trade presence and promote economic growth, the Indian government recently unveiled its new Foreign Trade Policy (FTP). With an emphasis on streamlining processes, supporting exporters, and expanding international market access, the FTP aims to position India as a formidable player in the global trade arena. In this blog post, we will delve into the key features of the new Foreign Trade Policy and its potential impact on India’s trade landscape.
Creating an Enabling Environment for Trade:
The FTP lays the groundwork for a conducive environment that fosters international trade. One of the key changes introduced is the shift towards digitalization and online platforms. This means that exporters can now benefit from paperless filing of export applications and gain e-certificates of origin, simplifying administrative processes and reducing time and cost burdens.
Supporting Micro, Small, and Medium Enterprises (MSMEs):
Recognizing the critical role of MSMEs in driving economic growth and employment generation, the FTP introduces measures to empower these enterprises in the international market. The reduction in fees for advanced authorizations and the Export Promotion Capital Goods (EPCG) scheme offers financial relief to MSMEs, encouraging their active participation in international trade.
Export Promotion Incentives:
The FTP places significant emphasis on export promotion incentives to enhance India’s export performance. The revision of export performance criteria enables exporters to achieve a five-star rating with a lower export value, making it easier for businesses to attain recognition for their export efforts. This recognition not only boosts their credibility but also opens doors to new market opportunities.
Cross-Border Trade and Rupee Trade:
With an aim to facilitate seamless cross-border trade, the FTP allows businesses to engage in cross-border transactions without physically touching Indian shores. This provision enables companies to purchase goods from one country and sell them to another, expanding their market reach and enhancing trade efficiency. Additionally, the promotion of rupee trade strengthens India’s position as a global trading hub.
District Export Hubs:
The FTP’s focus on developing district-level export hubs is a significant step towards decentralized trade promotion. By building capacity, infrastructure, and logistics at the district level, the government aims to boost exports and support the One District One Product (ODOP) initiative. This approach empowers local businesses, reduces dependency on central hubs, and promotes balanced regional growth.
E-commerce Exports:
In recognition of the growing significance of e-commerce in global trade, the FTP introduces measures to support e-commerce exports, particularly in the business-to-consumer (B2C) segment. The increase in limits per consignment, facilitation of foreign post offices for generating more e-commerce exports, and the creation of dedicated e-commerce export hubs are aimed at capitalizing on the tremendous potential of this sector.
Manufacturing Opportunities and Amnesty:
The FTP offers a variety of support systems to boost manufacturing in India, promoting self-reliance and enhancing export capabilities. Moreover, the provision of amnesty for export application defaults under the EPCG scheme provides relief to businesses that have faced challenges in meeting their export obligations, allowing them to recalibrate their strategies and leverage new opportunities.
Conclusion:
India’s new Foreign Trade Policy reflects the government’s commitment to fostering a vibrant and competitive export ecosystem. By embracing digitalization, supporting MSMEs, offering export incentives, facilitating cross-border trade, developing district export hubs, empowering e-commerce exports, and providing manufacturing opportunities, the FTP paves the way for India to expand its global trade footprint. With these proactive measures, India is well-positioned to unlock its full export potential, stimulate economic growth, and establish itself as a force to be reckoned with in the global trade arena.
