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Features of Foreign Trade Policy

2023:

4 pillars of FTP 2023:

Incentive to Remission, Export promotion through collaboration, Ease of doing business and
Emerging Areas

Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and
Textiles, Shri Piyush Goyal today launched the Foreign Trade Policy 2023 saying that it is dynamic
and has been kept open ended to accommodate the emerging needs of the time. He stated that the
policy had been under discussion for a long time and has been formulated after multiple stakeholder
consultations. India's overall exports, including services and merchandise exports, has already
crossed US$ 750 Billion and is expected to cross US$ 760 Billion this year, he said.

The Minister referred to the interaction that Prime Minister, Shri Narendra Modi with the exporters
on 06th August, 2021 and encouraged them to increase exports and get more deeply involved in the
global value chain. He lauded the vision and guidance of the Prime Minister who believed that given
the size of the Indian economy and manufacturing & service sector base, the potential for the country
to grow is manifold. He said that this vision is at the core of the policy.

The Minister noted that the remarkable achievement in the overall export figure of crossing US$ 760
Billion in these challenging times across the world has been the result of enthusiasm and
encouragement pumped in by the Prime Minister. He said that this achievement is in sync with the
target set in the roadmap in 2021 after the interaction with the Prime Minister.

He stressed that every opportunity for export must be captured and utilised effectively. He also
mentioned that in the next 5 months during India’s G20 presidency there should be a massive
concentrated outreach with the world both sector-wise and country-wise.

The release of the policy was also attended by Union Minister of State for Commerce & Industry,
Smt. Anupriya Patel, Commerce Secretary, Shri Sunil Barthwal and Member Customs, Central
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Board of Indirect Taxes and Customs, Shri Rajiv Talwar. Director General of Foreign Trade, Shri
Santosh Kumar Sarangi gave a detailed presentation on the policy.

The Key Approach to the policy is based on these 4 pillars: (i) Incentive to Remission, (ii) Export
promotion through collaboration - Exporters, States, Districts, Indian Missions, (iii) Ease of doing
business, reduction in transaction cost and e-initiatives and (iv) Emerging Areas – E-Commerce
Developing Districts as Export Hubs and streamlining SCOMET policy.

The Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution
and Textiles, Government of India has recently unveiled the new Foreign Trade Policy (FTP),
2023. In this article, you can read all the important features of the Foreign Trade Policy, 2023
and how it will impact the Indian economy.

Foreign Trade Policy 2023 Objectives

The objectives of the 2023 Foreign Trade Policy (FTP) are as under.

 To integrate India with the global markets: As India is on the path to becoming a
developed nation by 2047, the policy lays down a blueprint to integrate India with the
global markets and make it a reliable and trusted trade partner.

 To build a future-ready India: To build a future-ready India and to fulfil India’s

strategic vision of making India one of the top exporting nations in the ‘Amrit Kaal’.

 To create an enabling ecosystem: The approach of this FTP is to gradually move away
from an incentive-based regime and create an enabling ecosystem to support the
philosophy of ‘Atma Nirbhar Bharat’ and ‘Local goes Global’.

 To collaborate with state governments: To build and encourage export promotion at

the district level.

 To triple India’s goods and services exports: The new policy will replace the existing
policy that had been in place since 2015. The new policy aims to almost triple India’s
goods and services exports to $2 trillion by 2030, from an estimated $760 billion in
2022-23.
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Foreign Trade Policy 2023 Highlights

Trade Facilitation and Ease of Doing Business

 National Committee on Trade Facilitation (NCTF): India has ratified the World Trade
Organization’s Trade Facilitation Agreement (TFA) in April 2016. To facilitate
coordination and implementation of the TFA provisions, an inter-ministerial body i.e. the
National Committee on Trade Facilitation (NCTF) has been constituted.
 DGFT as a facilitator of exports/imports: DGFT has the commitment to function as a
facilitator of exports and imports. The focus is on good governance, which depends on
efficient, transparent and accountable delivery systems.
 Export of perishable agricultural products: To reduce transaction and handling costs,
a single window system to facilitate the export of perishable agricultural produce is being
facilitated through the Agricultural and Processed Food Products Export Development
Authority (APEDA).
 Niryat Bandhu: As a hand-holding scheme for new export/import entrepreneurs, DGFT
is implementing the Niryat Bandhu Scheme for mentoring new and potential exporters on
the intricacies of foreign trade.
 Online facility for e-Certificate of Origin (e-CoO): DGFT has created a common
digital platform for the issue of Preferential and Non-Preferential Certificate of Origin (e-
CoO) by designated agencies.
General Provisions regarding Imports and Exports

 Authority to specify procedures: DGFT

 Importer-Exporter Code (IEC): An IEC is a 10-character alpha-numeric number
allotted to an entity (firm/company/LLP, etc.) and is mandatory for undertaking any
export/import activities.
Developing districts as export hubs

 The FTP aims at building partnerships with State governments and taking forward the
Districts as Export Hubs (DEH) initiative to promote exports at the district level and
accelerate the development of a grassroots trade ecosystem.
Duty Exemption/Remission Schemes

 Duty Exemption Schemes. The Duty Exemption schemes consist of the following:
Advance Authorisation (AA) (which will include Advance Authorisation for Annual
Requirement) & the Duty-Free Import Authorisation (DFIA).
 Duty Remission Scheme. Duty Drawback (DBK) Scheme, administered by the
Department of Revenue.
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 Scheme for Rebate on State and Central Taxes and Levies (RoSCTL), as notified by the
Ministry of Textiles.
 Schemes for Remission of Duties and Taxes on Exported Products (RoDTEP), notified
by the Department of Commerce and administered by the Department of Revenue.
 Duty-Free Import Authorisation Scheme (DFIA):

 Duty-Free Import Authorisation is issued to allow duty-free import of inputs. In

addition, the import of oil and catalyst which is consumed/utilised in the process
of production of export products may also be allowed.
 Import of Tyres under the DFIA scheme is not allowed.
Export Promotion Capital Goods Scheme (EPCG)

 Facilitation under the Export Promotion of Capital Goods (EPCG) Scheme:

 The EPCG Scheme, which allows the import of capital goods at zero customs
duty for export production, is being further rationalised. Some key changes being
added are:

 The PM MITRA scheme has been added as an additional scheme eligible

to claim benefits under the CSP (Common Service Provider) Scheme of
the Export Promotion Capital Goods Scheme (EPCG).
 Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment,
Wastewater Treatment and Recycling, Rainwater harvesting system and
Rainwater Filters, and Green Hydrogen are added to Green Technology
products – will now be eligible for reduced Export Obligation requirement
under EPCG Scheme.
Amnesty Scheme:
 Amnesty Scheme under the FTP 2023 to address default on Export Obligations.
 This will provide relief to exporters who have been unable to meet their
obligations under EPCG and Advance Authorizations, and who are burdened by
high duty and interest costs associated with pending cases.
Export Oriented Units (EOUS), Electronics Hardware Technology Parks (EHTPS),
Software Technology Parks (STPS) And Bio-Technology Parks (BTPS):

 Units undertaking to export their entire production of goods and services (except
permissible sales in DTA), may be set up under the Export Oriented Unit (EOU) Scheme,
Electronics Hardware Technology Park (EHTP) Scheme, Software Technology
Park(STP) Scheme or Bio-Technology Park (BTP) Scheme for manufacture of goods.
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 The objectives of these schemes are to promote exports, enhance foreign exchange
earnings, attract investment for export production and employment generation.
 Facilitation under Advance Authorization Scheme:

 Advance Authorisation Scheme accessed by DTA (Domestic tariff area) units

provides duty-free import of raw materials for manufacturing export items and is
placed at a similar footing to EOU and SEZ Scheme.
Quality Complaints and Trade Disputes

 Complaints/Disputes between two or more Indian entities are not covered under this
mechanism. Similarly, complaints/disputes between two or more foreign entities are also
not covered.
 Mechanism for handling Complaints/Disputes:

 Committee on Quality Complaints and Trade Disputes (CQCTD): It will be

constituted in the Regional Authorities (RAs) of DGFT.
 Composition of the CQCTD: The CQCTD would be constituted under the
Chairpersonship of the Head of Office.
 Functions of CQCTD: The Committee (CQCTD) will be responsible for
enquiring and investigating all quality-related complaints and other trade-related
complaints falling under the jurisdiction of the respective RAs.
Promoting Cross-border Trade in Digital Economy

 Facilitating E-Commerce Exports:

 FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and
related elements such as payment reconciliation, bookkeeping, returns policy, and
export entitlements.
 The consignment-wise cap on E-Commerce exports through courier has been
raised from ₹5 Lakh to ₹10 Lakh in the FTP 2023.
 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.
 Integration of Courier and Postal exports with ICEGATE will enable exporters to
claim benefits under FTP.
SCOMET: Special Chemicals, Organisms, Materials, Equipment And Technologies:

 Streamlining SCOMET Policy:

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 More emphasis on the “export control” regime for better integration with export
control regime countries.
 A robust export control system in India would provide access to dual-use high-
end goods and technologies to Indian exporters while facilitating exports of
controlled items/technologies under SCOMET from India.
Other initiatives by the Government of India:

 The Government has undertaken several measures like opening new sectors for FDI,
improving the business environment, removing regulatory barriers, recognizing startups
and introducing schemes like Production Linked Incentive Scheme to enhance production
and productivity, attract investments and create jobs.
 As a result of its focused efforts, India achieved its highest-ever exports of over USD
676 billion in 2021-22, well on the way to achieving USD 750 billion in 2022-23.
 India has inked 13 Free Trade Agreements along with six limited-coverage Preferential
Trade Agreements and is negotiating new trade agreements with the European Union, the
UK, Canada and other countries on a fast-track basis.
 Over the next five years, the Government plans to focus on introducing path-breaking
reforms to strengthen its relations with different countries, which will help in setting a
robust foundation to achieve its strategic vision of becoming an export hub globally