Introduction:
The Indian government recently unveiled its highly anticipated Foreign Trade Policy (FTP) 2023, outlining its vision to boost exports and position India as a global trade powerhouse. With ambitious targets set for the coming years, the FTP aims to provide a comprehensive framework to support Indian businesses in expanding their international trade activities. In this blog post, we will explore the key highlights of the FTP 2023 and its potential to drive India towards achieving $2 trillion in exports by 2030.
An Overview of the FTP 2023:
The new FTP introduces a range of initiatives and measures to promote export growth and facilitate trade for Indian businesses. Unlike its predecessors, the FTP 2023 does not have an end date, allowing for continuous updates and adaptations to address the evolving needs of the global trade landscape. This flexibility ensures that India remains competitive and responsive to changing market dynamics.
Key Highlights and Objectives:
- Online Approvals and Paperless Processes: The FTP 2023 emphasizes digitalization by enabling online approvals, e-certificates of origin, and paperless filing of export applications and discharge applications. This streamlines the export process, reducing paperwork and enhancing efficiency.
- Reduction of Fees for MSMEs: Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in India’s export sector. To support their growth, the FTP 2023 offers a significant reduction in fees for advanced authorizations and EPCG (Export Promotion Capital Goods) schemes. This reduction helps alleviate the financial burden on MSMEs and encourages their active participation in international trade.
- Export Promotion Incentives: The FTP revisits export promotion incentives to provide greater support and encourage export performance. Businesses can now achieve a five-star exporter status with a lower export value, boosting their competitiveness in international markets.
- Cross-Border Trade and Rupee Trade: The FTP introduces provisions for cross-border trade, enabling businesses to purchase goods from one country and sell them to another without physically touching Indian shores. Additionally, the rupee trade is expected to receive a significant boost, facilitating trade transactions.
- District Export Hubs: The FTP emphasizes the development of district-level export hubs to promote export activities. This approach aims to enhance infrastructure, logistics, and capacity at the local level, empowering businesses in different regions to engage in international trade. The government’s focus on the “One District One Product” (ODOP) initiative further strengthens the export potential of specific districts.
- Boost for E-commerce Exports: The FTP extends support to e-commerce exports, especially in the business-to-consumer (B2C) segment. The limits per consignment have been increased, and foreign post offices are enabled to facilitate more e-commerce exports. The creation of e-commerce export hubs further enhances India’s capabilities in this rapidly growing sector.
- Manufacturing Opportunities and Amnesty: The FTP provides various support systems for manufacturing, aiming to boost India’s manufacturing capabilities and competitiveness. Additionally, an amnesty is granted for export application defaults under the EPCG scheme, providing relief to businesses that have faced challenges in meeting export obligations.
Conclusion:
India’s Foreign Trade Policy 2023 sets a clear roadmap for the country to achieve $2 trillion in exports by 2030. With its focus on digitalization, reduction of fees for MSMEs, export promotion incentives, cross-border trade facilitation, district export hubs, e-commerce exports, manufacturing opportunities, and amnesty provisions, the FTP aims to create a conducive environment for businesses to thrive in the international trade arena. By leveraging these initiatives and embracing global opportunities, Indian businesses can expand their reach, diversify their markets, and contribute to India’s economic growth
