Key Features of Foreign Trade Policy – 2023

➢ FTP (2015-2020)
The Foreign Trade Policy 2015-20, which was scheduled to conclude on March 31,
2020, was prolonged until March 31, 2023, owing to the COVID pandemic and unstable
geopolitical circumstances. India has achieved an all-time high in its export
performance in both merchandise and services during this period. India's exports in
merchandise and services are anticipated to exceed a record-breaking USD 760 billion
in the fiscal year 2022-23. This notable export performance was made possible by the
contribution of the FTP 2015-20.

➢ FTP 2023
According to the narration, policy changes have been made since 2015, even without
the formal announcement of a new Foreign Trade Policy. These changes were made in
response to emerging situations and were adapted dynamically. The purpose of
announcing the Foreign Trade Policy 2023 is to provide policy continuity and a
responsive framework. Any subsequent revisions to the FTP will be made as and when
required and will not be linked to any specific date. To streamline processes and update
policies and procedures, continuous feedback from trade and industry will be taken into
account.
• Key Approach of New FTP 2023
1. The government has replaced incentives with tax remission to encourage
trade.
2. Technology, automation, and continuous process re-engineering are
being utilized to enhance trade facilitation.
3. Collaboration between exporters, states, and districts is being promoted
to boost exports.
4. The government is now focusing on emerging areas, such as e-
commerce exports, developing districts as export hubs, and streamlining
the SCOMET policy, among others, to facilitate trade.
KEY COMPONENTS OF FOREIGN TRADE POLICY

➢ EASE OF DOING BUSINESS, REDUCTION IN TRANSACTION COST AND E-

INITIATIVES
1. The Foreign Trade Policy will allow for online approvals without the
need for physical interaction. This will speed up the approval process
and allow for immediate approval of applications for exporters. The
process will be simplified using technology.
2. Micro, Small and Medium Enterprises (MSMEs) will benefit from a
reduction in user charges for Advance Authorization and EPCG
Schemes. The application fee will be reduced and this will benefit 55-
60% of exporters who are MSMEs.
3. The e-Certificate of Origin platform will be updated to allow for self-
certification of CoOs, as well as automatic approval of CoOs when
possible. Plans to electronically exchange CoO data with partner
countries are also being considered.
4. Authorization redemption applications will be paperless, in addition to
the already paperless application process for issuance. This will make
the entire lifecycle of the authorization paperless.
➢ Export Promotion Initiatives
1. The standards for recognizing exporters as status holders have been
rationalized, which will allow more exporters to achieve higher status
and reduce export transaction costs.
2. To boost merchanting activities from India, the government has allowed
merchanting trade involving an Indian intermediary, subject to RBI
guidelines. However, goods or items on the CITES and SCOMET list
are exempted.
3. The government has taken an effective step towards the
internationalization of the Indian rupee by extending FTP benefits for
rupee payments through special Vostro accounts. This was announced in
an RBI circular on July 11, 2022.
4. The government has added four new towns to the existing 39 towns of
export excellence under the scheme that promotes cluster-based
economic development. Faridabad, Mirzapur, Moradabad, and Varanasi
 have been recognized as industrial clusters with good export
performance, and the government aims to maximize their potential by
enabling them to move up the value chain and tap new markets.
➢ Districts as Export Hubs initiative
1. The aim of the "Districts as Export Hubs" program is to boost India's
foreign trade by involving the districts in export promotion. This
involves identifying products/services that can be exported from each
district and creating institutional mechanisms at the State and District
level to strategize exports. Additionally, District Export Action Plans are
prepared to outline the steps needed to promote these products/services.
The goal is to make States and Districts active stakeholders in promoting
exports.
2. The program also includes capacity building at the district level to create
new exporters and identify new markets. This involves training and
outreach programs by DGFT field offices in coordination with District
Industries Centers. Regional Authorities of DGFT work with the
States/UTs to prepare District-specific Export Plans. Export promotion
outreach programs in districts focus on branding, packaging, design, and
marketing of identified products & services.
3. Another important aspect of the program is infrastructure and logistics
development intervention to address bottlenecks that may impede
exports. This involves focusing on the development of logistics, testing
facilities, connectivity for exports, and another export-oriented
ecosystem. The program aims to converge ongoing schemes to support
these initiatives.
➢ E-Commerce Exports
1. The government plans to help e-commerce exporters by extending all
benefits from the Foreign Trade Policy (FTP) to them. The Department
of Commerce, Post, and CBIC will improve their IT systems in the next
six months to make this possible. To make e-commerce exports easier,
the government is working with other ministries to create guidelines.
Small e-commerce exporters will also receive special training and
assistance from industry and knowledge partners.
 2. The government is setting up Dak Ghar Niryat Kendras throughout the
country to help cross-border e-commerce. These centers will work with
Foreign Post Offices (FPOs) to enable artisans, weavers, craftsmen, and
MSMEs from remote and landlocked areas to access international
markets.
3. To make e-commerce exports more efficient, designated hubs with
warehousing facilities will be created. These hubs will make it easier for
e-commerce aggregators to stock, clear customs, and process returns.
Processing facilities will also be available for activities like labelling,
testing, and repackaging.
➢ Steps to Boost Manufacturing
1. The Prime Minister Mega Integrated Textile Region and Apparel Parks
PM MITRA scheme has been included in the CSP Scheme of the EPCG
Scheme, which means that textile and apparel parks can now also claim
benefits under this scheme.
2. The dairy sector will no longer have to maintain Average Export
Obligation, which will help it upgrade its technology.
3. Green technologies like Battery Electric Vehicles, Vertical Farming
equipment, Wastewater Treatment and Recycling, Rainwater harvesting
system and Rainwater Filters, and Green Hydrogen are now eligible for
reduced Export Obligation under the EPCG Scheme.
4. The Apparel and Clothing sector can now use the Special Advance
Authorisation Scheme under para 4.07 of HBP on a self-declaration
basis, which will help them execute their export orders more quickly.
Norms will be fixed within a fixed time-frame.
5. The Self-Ratification Scheme for Input-Output Norms will now be
available to 2 star and above status holders and Authorised Economic
Operators. Additionally, Fruits and Vegetables exporters will receive
double weightage for counting export performance under eligibility
criteria for Status House certification, in addition to the existing MSME
sector who also receive double weightage.
➢ Special one-time Amnesty Scheme for default in Export Obligations
To support trade and industry and encourage exports, relief will be given
to exporters who are unable to meet their Export Obligation (EO) against
 the EPCG and Advance Authorizations. An amnesty scheme will be
introduced to settle the default in export obligation for Advance
Authorization and EPCG authorization holders. This scheme will allow
the authorization holder to regularize all pending cases of default in EO
by paying all customs duties that were exempted in proportion to the
unfulfilled Export Obligation. The maximum interest that can be
charged is 100% of such duties exempted, but no interest is payable on
the portion of Additional Customs Duty and Special Additional Customs
Duty. This amnesty scheme is available for a limited period until
30.09.2023. However, cases that are being investigated for fraud and
diversion are not eligible for this scheme.
➢ Emphasis on streamlining SCOMET Licensing Procedure
1. The new Foreign Trade Policy (FTP) for 2023 will concentrate on
Special Chemicals, Organisms, Materials, Equipment, and Technologies
(SCOMET).
2. The policy for exporting dual-use items under SCOMET will be
consolidated in one place for easy understanding and compliance by the
industry.
3. The SCOMET policy emphasizes India's commitment to its
international agreements under various export control regimes such as
the Wassenaar arrangement, Australia group, and Missile Technology
Control Regime. The goal is to regulate the trade in sensitive and dual-
use items, including software and technology.
4. Recent changes in policy include the introduction of general
authorizations for exporting certain SCOMET items. This step will
streamline the licensing process and make the export of SCOMET items
more competitive globally.
5. The focus is on simplifying policies to make it easier to export high-end
dual-use goods/technology, such as UAV/Drones, Cryogenic Tanks,
Certain Chemicals, etc.

Suggestion/Wayforward

The new Foreign Trade Policy will be flexible and responsive to the changing trade
environment. The policy will focus on engaging with states and districts to promote grassroots-
level exports. Additionally, there will be a focus on streamlining processes for e-commerce
exports to facilitate growth in this space. To achieve the target of $1 trillion in merchandise
exports by 2030, there will be sector-specific goals set. A consultative mechanism will be put
in place to resolve issues faced by the trade and industry. There will also be efforts to make the
Indian Rupee a global currency and facilitate international trade settlements in INR. Finally,
the Department of Commerce will be restructured to make it ready for the future.