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India unveils Foreign Trade Policy 2023 eyes USD 2 trillion exports by 2030

The government introduced the Foreign Trade Policy (FTP) 2023, which aims to increase the country’s exports to USD 2 trillion by 2030. The new policy is different from the previous 5-year FTP announcements as it has no specific end date and will be revised as needed, according to the Director General of Foreign Trade (DGFT), Santosh Sarangi. Commerce and Industry Minister Piyush Goyal presented FTP 2023, which will be implemented starting from April 1, 2023, and emphasizes a shift from incentive-based approaches to remission and entitlement-based measures.

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.

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Merchandise exports target: $1 trillion by 2030

Key Highlights of New Foreign Trade Policy 2023:

BQ Prime on Twitter: "Finance Minister Piyush Goyal unveils #ForeignTradePolicy2023. This policy will come into effect from April 1, 2023. https://t.co/Eb2f6gRsO7" / Twitter

  • The new Foreign Trade Policy (FTP) 2023, announced by Commerce and Industry Minister Piyush Goyal, will take effect from April 1, 2023.
  • The FTP aims to increase India’s exports to USD 2 trillion by 2030 and has no specific end date, but will be updated as needed. India is expected to end the current fiscal year with total exports of USD 760-770 billion, up from USD 676 billion in 2021-22.
  • The policy identifies four new Towns of Export Excellence (TEE) – Faridabad, Moradabad, Mirzapur, and Varanasi – in addition to the existing 39 TEEs. The policy extends FTP benefits to e-commerce exports and increases the value limit for exports through courier services.
  • The new FTP also seeks to make the Indian rupee a global currency, introduces an amnesty scheme for export obligation defaulters, and exempts the dairy sector from maintaining an average export obligation.

Foreign Trade Policy(FTP) 2023: Govt to introduce amnesty scheme for one time settlement of export obligation defaults:

In $2 Trillion Export Push, India Unveils Foreign Trade Policy 2023

As part of the Foreign Trade Policy (FTP) 2023, the Indian government has introduced an amnesty scheme for the one-time settlement of export obligation defaults.

The scheme will allow holders of Advance Authorization and Export Promotion Capital Goods (EPCG) authorizations to settle their export obligation defaults and renew their authorizations without attracting any penalties or legal action.

This move is expected to provide relief to exporters who may have defaulted on their export obligations due to the COVID-19 pandemic or other reasons.

Foreign Trade Policy(FTP) 2023: 4 New Towns of Export Excellence(TEE):

DGFT on Twitter: "During launch of the Foreign Trade Policy 2023, Hon'ble Minister of Commerce and Industry thanked Indian exporters for making India achieve record exports of $760 Bn. 3/n https://t.co/vQFyDZ20Yq" /

The four new towns – Faridabad, Mirzapur, Moradabad, and Varanasi – have been identified as Towns of Export Excellence (TEE) under the Foreign Trade Policy (FTP) 2023.

These TEEs will receive priority access to export promotion funds under the Market Access Initiative (MAI) scheme and will be able to avail Common Service Provider (CSP) benefits for export fulfillment under the Export Promotion Capital Goods (EPCG) Scheme.

This move is expected to boost the exports of handlooms, handicrafts, and carpets, which are the mainstay of these towns’ economies.

The existing 39 TEEs have been identified based on their export performance and potential, and the new additions are expected to contribute significantly to India’s export growth.

Foreign Trade Policy(FTP) 2023: Facilitating E-Commerce Exports:

Mint on Twitter: "One of the key features of the FTP 2023 is the extension of its benefits to e-commerce exports, which are predicted to reach USD 200-300 billion by 2030. Read

The Foreign Trade Policy (FTP) 2023 recognizes the potential of e-commerce exports and has introduced policy interventions to facilitate the growth of this sector.

The FTP outlines a roadmap for establishing e-commerce hubs and related elements such as payment reconciliation, book-keeping, returns policy, and export entitlements. The consignment-wise cap on e-commerce exports through courier has been raised from ₹5 lakhs to ₹10 lakhs in the FTP 2023, which is expected to boost the exports of small and medium-sized e-commerce enterprises.

Various estimates suggest that e-commerce exports have the potential to reach $200 to $300 billion by 2030, and the policy measures introduced under FTP 2023 are expected to help achieve this goal.

(image credit- respective producer)

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