Have You Heard About This New Foreign Trade Policy in 2023?

India’s Foreign Trade Policy 2023 aims to boost exports and facilitate business conduct, focusing on the “Export Control” regime. It includes incentives for remission, cooperation promotion, ease of doing business, and developing areas, fostering trust and engagement with exporters. Now we will have a look into the new foreign trade policy of India.

Overview of the New Foreign Trade Policy of India

The new foreign trade policy 2023 places a higher priority on initiatives including promoting e-commerce exports and modernizing the Export Promotion Capital Goods program.

The Foreign Trade (Development and Regulation) Act of 1992 gave rise to the central government’s publication of the Foreign Trade Policy, a legislative document. The purpose of this policy is to enable trade by reducing transaction and transit costs and time. It supports export and trade.

Objectives of New Foreign Trade Policy 2023

The FTP 2023 aims at

• The FTP 2023 aims to streamline export business processes through re-engineering and automation, promoting automated IT systems, risk management, and reduced fee structures, thereby enhancing accessibility for MSMEs.
• The government aims to increase India’s total exports to $2 trillion by 2030 with equal contributions from the goods and services sectors.
• The government also intends to promote the use of the Indian currency in cross-border trade, which is to be helped by the new payment settlement framework introduced by the RBI in July 2022.
• The approach of this FTP is to gradually move away from the incentive-based regime and create an enabling ecosystem to support the philosophy of ‘Atma Nirbhar Bharat‘ and ‘Local Go Global’.
• As India is on track to become a developed nation by 2047, the policy lays down a roadmap to integrate India with global markets and make it a reliable and trusted trading partner.

Necessity of Recent Foreign Trade Policy 2023

In short, the FTP 2023 is required-

• To boost India’s exports
• To comply with WTO guidelines
• Help advance the MSMSE industry
• To incorporate new sectors

To handle the grievance procedures

Highlights

The key pointers to understanding the recent foreign trade policy of 2023 include-

Modernization and automation of processes

• The new policy emphasizes the use of technology and cooperation to support exports.
• Small and Medium Enterprises (MSMEs) will have easier access to export benefits through lower fee structures and the introduction of IT-based systems.
• Manual processes will be replaced by an automated system for implementing duty exemption schemes, managed through regional authorities.

Cities of Export Excellence (TEE)

• Besides the existing 39 cities, four more cities – Faridabad, Mirzapur, Moradabad, and Varanasi – have been designated as TEEs.
• TEEs will have priority access to export promotion funds under the MAI scheme and can avail of the benefits of a common service provider (CSP) for export fulfillment under the EPCG scheme.

Recognition for exporters

• Export firms that achieve recognized “status” based on their export performance will play a role in capacity-building initiatives voluntarily.
• Exporters rated 2 stars or above will be encouraged to provide trade-related training according to a standardized curriculum.
• The criteria for achieving 4 and 5 star ratings have been adjusted, allowing more companies to qualify and improving their branding opportunities in international markets.

Export support at the district level

• FTP 2023 emphasizes partnering with state governments to promote exports at the district level through the Districts as Export Hubs (DEH) initiative.
• State Export Promotion Committees and District Export Promotion Committees will work to identify products/services suitable for export and resolve issues at the district level.
• Each district will have a specific export action plan tailored to its unique circumstances to promote the identified products and services.

Strengthening SCOMET policy

• India is focusing more on its “export control” strategy and aligning it with countries with an export control regime to strengthen integration.
• Increased awareness and understanding of SCOMET (Specialty Chemicals, Organisms, Materials, Equipment, and Technologies) among stakeholders.
• The export control system will be strengthened to comply with international treaties and agreements, giving Indian exporters access to world-class goods and technology while ensuring SCOMET-compliant exports.

Boosting e-commerce exports

• The policy outlines plans to set up e-commerce hubs with streamlined processes.
• As a first step, the limit for e-commerce exports through couriers has been increased from ₹5 to ₹
• Adjustments to the cap will be made based on feedback from exporters.

Improvements to the EPCG scheme

• The EPCG regime, which facilitates duty-free import of capital goods for export production, is being improved.
• The PM MITRA scheme has been subsumed into the CSP EPCG scheme and offers additional benefits.
• Exemption from the average export duty for the dairy sector and reduced export duty for green technology products.

Advances in the Prior Authorization Scheme

• The advance clearance regime for DTA units, which provides duty-free import of raw materials for the manufacture of export items, is now at par with the EOU and SEZ regimes.
• The apparel and clothing industry is now included in the special advance clearance system based on self-declaration and expediting export orders.
• The benefits of a self-ratification system for fixing Input-Output Norms extended to holders of 2-star and above status along with authorized economic operators.

Amnesty Scheme

• As part of the amnesty, an online portal will be introduced to allow exporters to participate within six months.
• The scheme resolves outstanding cases of non-fulfillment of export obligations and offers regularization after payment of duty in proportion to the defaulted obligations.

Summarizing New Foreign Trade Policy 2023

• The latest foreign trade policy 2023 introduces new schemes like one-time Amnesty, Towns of Export Excellence, Status Holder, Advance Authorization, and EPCG, facilitating Indian merchant trade and resolving old authorizations
• The FTP 2023 policy focuses on district-level export promotion and grassroots trade ecosystem development. It partners with state governments and introduces Districts as Export Hubs to identify export-worthy products and services.
• India’s integration with countries with an export control regime is being strengthened and the policy regime is being strengthened to implement international agreements. FTP 2023 brings a wider reach and understanding of Specialty Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) among stakeholders to ensure compliance with international regulations.

Conclusion

All things considered, the FTP 2023 is a dynamic policy document that seeks to increase India’s exports and facilitate its multiplication over the next many years. The policy, which places a strong focus on collaboration, technological interface, and ease of doing business, is anticipated to support the expansion of the export sector and foster an atmosphere that will allow SMEs and other firms to take advantage of export advantages.

FTP 2023 serves as a roadmap for Indian exports to soar to new heights and establish the country as a leader in the export sector worldwide.

In case of any query regarding the new foreign trade policy of India, a team of expert advisors from Legal Window is here to assist you at every step. Feel free to reach us at admin@legalwindow.in.