Foreign Trade Policy (FTP) 2023 was recently introduced by the Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles. This policy, effective from April 1, 2023, aims to maintain the continuity of well-established schemes that support exports while also being adaptable and responsive to the evolving needs of trade. The policy aims to achieve a long-term vision of increasing India’s exports of goods and services to $2 trillion by 2030, which would enhance India’s share in global trade and boost its economic growth. The policy also seeks to align India’s foreign trade with its national priorities and global commitments.
In this article, we will read about Foreign Trade Policy (FTP) 2023, its impact on the future of India, challenges related to this policy, etc.
Table of Content
- What is Foreign Trade Policy 2023?
- What is India’s Foreign Trade Policy?
- Types of Foreign Trade Policy (FTP)
- Features of Foreign Trade Policy 2023
- Objectives of Foreign Trade Policy (FTP)
- Highlights of Foreign Trade Policy 2023
- Impact of Foreign Trade Policy 2023
- Challenges to the Foreign Trade Policy (FTP) 2023
- Latest News On – Foreign Trade Policy (FTP)
What is Foreign Trade Policy 2023?
The FTP 2023 is a document containing policies of time-tested schemes for making exports easier. The Foreign Trade Policy (FTP) 2023 was launched by Union Minister Shri Piyush Goel. The goal of the FTP 2023 is process automation and re-engineering to make it easier for exporters to conduct business. Additionally, it concentrates on new fields such as working with States and Districts to promote exports, enabling the export of e-commerce, and dual-use high-end technological items under SCOMET.
Pillars of Foreign Trade Policy 2023
- The government is rewarding and extending support to encourage exporters.
- Indian exporters from different regions of India and outside the country work together to boost the export of Indian goods.
- The government makes it easy for businesses to continue smoothly by reducing the costs of transactions and using online platforms.
- Encouragement to new businesses such as e-commerce and development of districts.
What is India’s Foreign Trade Policy?
India’s Foreign trade policy (FTP) is a set of rules for the import and export of goods that aims to improve and encourage international trade. The foreign trade policy is made by the Directorate General of Foreign Trade Policy under the government of India. The export and import policy is announced by the Ministry of Commerce and Industry on April 1 every five years.
Types of Foreign Trade Policy (FTP)
There are two types of foreign trade policies: Protective Trade Policy and Free Trade Policy.
- Protective Trade Policy shields the internal economy of the nation from foreign competition that might be a threat to the national markets in goods and services which is perfect for India as a developing nation.
- Free Trade Policy as the name indicates gives no limitations on the exchange of goods and services for trading nations. There are no restrictions on consumption and manufacturing, also no subsidies and tariffs followed by them. This is best for developing nations.
Features of Foreign Trade Policy 2023
The foreign trade policy of 2023 is based on the principle of partnership and trust with exports. It aims to make the process of doing business easier. Important features of FTP 2023 are as follows:
- Increasing exports to $2 trillion by 2030.
- Digitalization of application process.
- Responsive and continuous framework with no end date.
- Introduction of schemes to promote exports.
- Making the Indian rupee the global currency.
- Making India a trade hub.
- Restructuring the Department of Commerce.
- Reducing the cost of transactions for exporters by 50%.
Objectives of Foreign Trade Policy (FTP)
The objectives of foreign trade policy are provided below:
- Promoting Exports: A primary objective of any FTP is to promote exports from the country. This includes identifying new markets, diversifying the export basket, and enhancing the competitiveness of exports in the global market.
- Simplifying Procedures: Streamlining and simplifying procedures related to exports and imports to make them more efficient and less time-consuming. This often involves reducing bureaucratic hurdles and making the process more transparent.
- Trade Facilitation: Enhancing the ease of doing business by improving logistics, infrastructure, and processes related to international trade. This can include upgrading ports, improving customs procedures, and adopting digital technologies.
- Boosting Foreign Direct Investment (FDI): Attracting more foreign direct investment by creating a favorable policy environment. This could involve relaxing FDI norms in certain sectors and simplifying the approval process.
- Supporting Small and Medium Enterprises (SMEs): Providing special support and incentives to SMEs to help them grow and compete in the global market. This can include financial incentives, training, and access to global trade platforms.
Key Objective of Foreign Trade Policy 2023
Deal, negotiation and collaboration for India financial and economy , new emerging market high growth country concept.
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Highlights of Foreign Trade Policy 2023
These policy changes have been carried out since 2015 without the announcement of a new FTP. The key highlights of the foreign trade policy 2023 are as follows:
- Reducing minimum exports required for exporters to be recognized as a high achievers. This allows small exporters to receive the benefits of low transaction costs.
- Introduction of e-initiatives to provide easier access to the global market for MSMEs.
- Encouraged recognition of new towns through the “Towns of Export Excellence Scheme”.
- FTP 2023 has no sunset provision meaning it has no end date.
Impact of Foreign Trade Policy 2023
The foreign trade policy of 2023 had a big impact on how we do business with other countries. The policy makes the business easier for the exporters by use of technology. This policy encourages exports in different towns by introducing various schemes. This helps the businesses and promotes economic growth by making the process efficient and smooth.
1. Making the Business Easy by Reducing Transition Costs and Providing e-Initiatives
Simplifying the process of getting approval under foreign trade policy. Giving immediate approval of application through automatic route for exporters. This can be explained through the table below:
|
Type of Permissions |
Processing Time |
Processing Time for Automatic Route |
|---|---|---|
|
Advance authorization issuance |
3 to 7 days |
1 day |
|
EPCG issuance |
3 to 7 days |
1 day |
|
Revalidation of authorizations |
3 days to 1 month |
1 day |
|
Extension of export obligation period |
3 days to 1 month |
1 day |
- Reduction in fees for Export Promotion for Capital Goods (EPCG) and Advance Authorization schemes.
- Arranging e-Certificate of Origin(CoOs)-provide for self-certification along with automatic approval of CoOs. Providing for online exchange of CoOs with future partner countries.
- All required applications to be paperless in addition to issuance also being paperless. This makes the entire process paperless.
2. Introducing Schemes to Promote Exports
- Helping the exporters achieve higher status and reducing the cost of export transactions.
- Allowing Indian intermediaries to ship goods without touching the Indian shores.
- Allowing payments and settlement of imports and exports to be done in rupees.
- Addition of four new towns to the list of Towns of Export Excellence (TEEs) along with other 39 existing TEEs.
- Improving trade by the development of logistics and Infrastructure.
3. E-Commerce Exports
Facilitate e-commerce exports and help small businesses to access global markets.
4. Boosting Manufacturing
The government has taken various steps to promote the manufacturing sector through various schemes like the introduction of goods and services tax, reduction of corporate tax, and reforming FDI policy.
5. Promote Manufacturing, Employment, and Exports
- Decentralizing export promotion in India to increase foreign trade.
- Strengthening the organization’s ability to achieve its mission.
6. Special One-Time Amnesty Scheme
- The scheme is a part of the “Vivaad se Vishwas” initiative which aims to settle tax issues.
- The scheme provides relief to importers who are not able to fulfill export requirements under the EPCG and AA schemes.
7. Streamlining the SCOMET Licensing Procedure
- SCOMET stands for special chemicals, organisms, materials, equipment, and technologies.
- This policy focuses on simplifying the process for exporting certain SCOMET items.
Challenges to the Foreign Trade Policy (FTP) 2023
Although Foreign Trade Policy 2023 has several benefits, it falls short of some important parts of Indian trade like research & development and highly skilled labour. FTP 2023 follows all the rules given by WTO to make paperwork for trade easier but It does not give attention to important issues holding back exports like no investments for new Ideas & research and lack of skilled workers.
Even though the main aim is to increase exports internationally, FTP 2023 does not define the amount of time and money required. The policy only helps certain companies with training and consultation for trade leaving behind others in need. This not only ignores the important problems but also makes the government less accountable and distracts one from the main goals of the policy.
Latest News On – Foreign Trade Policy (FTP)
- In 2024, India’s Foreign Trade Policy (FTP) underwent a significant transformation. The Central government decided to replace the traditional five-year term FTP with a more flexible, open-ended one to keep up with the rapidly evolving global trade trends.
- Additionally, India signed a Free Trade Agreement with the European Free Trade Association (EFTA), marking a subtle policy shift from New Delhi.
- The World Economic Forum’s Annual Meeting in Davos emphasized the importance of rejuvenating trade. The reconfiguration of supply chains and global growth are viewed as opportunities rather than challenges.
- Furthermore, the Director-General of Foreign Trade (DGFT) hinted at potential policy liberalization for e-commerce exporters.
Conclusion – Foreign Trade Policy (FTP) 2023
The future of the Indian economy is fully dependent on how well it can adapt to emerging global trends, particularly in areas like green technology. By adding sustainability and environmental considerations into trade policies, India can become a leader in eco-friendly practices. Also putting more effort into strengthening strategic partnerships and investing in educating the workforce and teaching them new skills will add to India’s competitiveness in the global markets. The FTP 2023 along with target reforms can potentially make the way for a sustainable economic future for India.
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FAQs on Foreign Trade Policy (FTP) 2023
What is the aim of Foreign Trade Policy 2023?
The new FTP 2023 AIMS boosts the globalisation of trade in Indian rupees by the settlement of Indian trade in the currency of India. It is a set of rules for the import and export of goods that aims to improve and encourage international trade.
What is the main focus of FTP 2023?
The main goal of this FTP 2023 is to reach US$2 trillion in exports by shifting from a motive-driven economy to an enlightened one. This was aimed to increase economic growth, increase competition, and integrate into the global economy.
What is the new Foreign trade policy of India in 2023?
The FTP 2023 is a document containing policies of time-tested schemes for making exports easier. FTP is based on the principles of partnership and trust with the exporters.
What are the four pillars of FTP 2023?
The FTP 2023 is based on 4 pillars:
- The government is rewarding and extending support to encourage exporters.
- Indian exporters from different regions of India and outside the country work together to boost the export of Indian goods.
- The government makes it easy for businesses to continue smoothly by reducing the costs of transactions and using online platforms.
- Encouragement to new businesses such as e-commerce and development of districts.
Who launched the foreign trade policy in 2023?
The Foreign Trade Policy (FTP) 2023 was launched by Union Minister Shri Piyush Goel on April 1. It is a document containing policies of time-tested schemes for making exports easier.
Who controls India’s foreign trade?
The Ministry of Commerce and Industry controls the foreign trade in India.