New Foreign Trade Policy 2023-28

Table of Contents

Context: The union government recently unveiled a new Foreign Trade Policy (FTP) 2023-28.

Background: Foreign Trade Policy (FTP) 2015-20

FTP 2015-20 which was to end on 31.3.2020 was extended due to COVID pandemic and volatile geo-political scenario till 31.03.2023.
Performance: India has reach record high Export Performance in Merchandise and Services Exports during this period.

India’s Merchandise and Services exports is expected to cross record USD 760 Billion in FY2022-23.

It is a policy document based on continuity of time-tested schemes facilitating exports as well as a document which is nimble and responsive to the requirements of trade.
Principles: The policy is based on principles of ‘trust’ and ‘partnership’ with exporters.
Goal: FTP 2023 sets a $2 trillion target for exports of goods and services by 2030 with a shift from incentives to remission and entitlement-based regime.
Open ended: FTP 2023-28 is dynamic and has no end date and will be updated as and when needed.
Four key pillars of the new FTP 2023-28:
- A shift from incentives to tax remission
- Trade facilitation through technology, automation, and continuous process re-engineering
- Export promotion through collaboration: Exporters, States, Districts
- Focus on Emerging Areas – E-Commerce Exports, Developing Districts as Export Hubs, Streamlining SCOMET policy etc.

Ease of Doing Business

Online approvals without physical interface: Automatic approval of various permissions under Foreign Trade Policy based on process simplification and technology implementation.
- Reduction in processing time and immediate approval of applications under automatic route for exporters.
E-Certificate of Origin: Revamp of the e-Certificate of Origin (CoO) platform proposed- to provide for self-certification of CoOs as well as automatic approval of CoOs, where feasible.
- Initiatives for electronic exchange of CoO data with partner countries envisaged.
Paperless filing of export obligation discharge applications: All authorisation redemption applications to be paperless. With this, the entire lifecycle of the authorization shall become paperless.

Export Promotion Initiatives

Recognition of Exporters: Exporter firms recognized with ‘status’ based on export performance will now be partners in capacity-building initiatives on a best-endeavour basis.
- 2-star and above status holders would be encouraged to provide trade-related training based on a model curriculum to interested individuals.
Towns of Export Excellence (TEE): Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been designated as TEE in addition to the existing 39 towns.
- The TEEs will have priority access to export promotion funds under the Market Access Initiative (MAI) scheme.
- The MAI Scheme was launched in 2013 to support the Indian exporters in penetrating and expanding their exports to foreign markets by providing financial assistance for various export promotion activities.
Promoting Export from the Districts: The FTP aims at building partnerships with State governments and taking forward the Districts as Export Hubs (DEH) initiative.
- This would promote exports at the district level and accelerate the development of the grassroots trade ecosystem.
Rupee payment to be accepted under FTP Schemes: FTP benefits extended for rupee realisations through special Vostro accounts setup as per RBI circular issued on 11 July 2022.
- This is an effective step towards internationalisation of Rupee.

E-Commerce Exports

Facilitation for E-Commerce exports: All FTP benefits will be extended to e-Commerce exports.
- Various estimates suggest India’s e-commerce export potential in the range of $200 to $300 billion by 2030.
Dak Niryat facilitation: Dak Ghar Niryat Kendras shall be operationalised throughout the country to work in a hub-and-spoke model with Foreign Post Offices (FPOs) to facilitate cross-border e-Commerce and to enable artisans, weavers, craftsmen, MSMEs in the hinterland and land-locked regions to reach international markets.
E-Commerce Export Hubs: Designated hubs with warehousing facility to be notified, to help e-commerce aggregators for easy stocking, customs clearance and returns processing.

Streamlining SCOMET Policy

India is placing more emphasis on the “export control” regime as its integration with export control regime countries strengthens.
There is a wider outreach and understanding of SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) among stakeholders.

Amnesty Scheme

Government is strongly committed to reducing litigation and fostering trust-based relationships to help alleviate the issues faced by exporters.
In line with “Vivaad se Vishwaas” initiative, which sought to settle tax disputes amicably, the government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default on Export Obligations.
This scheme is intended to provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations.