The Foreign Trade Policy (2023) is a document that outlines policy. It is flexible and receptive to the needs of trade. Firstly, 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
(iv) Emerging Areas E-Commerce, Developing Districts as Export Hubs, and streamlining SCOMET policy.
Additionally, a one-time amnesty program is being introduced by the new foreign trade policy. This program will allow exporters to finish up any old pending authorizations and start over. Furthermore, through the “Towns of Export Excellence Scheme” and the “Status Holder Scheme,” the FTP 2023 promotes the recognition of new towns and exporters, respectively. Moreover, by streamlining the well-known Advance Authorization and EPCG programs, and permitting merchanting trade from India, the FTP 2023 is facilitating exports.
Process Re-Engineering and Automation:
The foreign trade policy places a strong emphasis on export development and promotion. It shifts from an incentive system to one that facilitates trade and is founded on concepts of cooperation and technological interface. FTP 2023 expands on prior “ease of doing business” initiatives by codifying implementation procedures in a paperless, online environment.
Reduced fee structures and IT-based programs will simplify receiving export benefits for MSMEs and others. Regional Offices will now administer duty exemption programs for export production in a rule-based IT system environment.
This will do away with the requirement for manual interface. The Advance and EPCG Schemes will cover all processes, including issuance, revalidation, and EO extension. These changes will occur in a staggered manner over FY24.
Towns of Export Excellence:
The government has designated four new towns – Faridabad, Mirzapur, Moradabad, and Varanasi – as Towns of Export Excellence (TEE). This increases the total to 43 towns. These TEEs will receive priority access to export promotion funds under the MAI scheme. They can also avail of Common Service Provider (CSP) benefits for export fulfillment under the EPCG Scheme. This addition is expected to boost exports of handlooms, handicrafts, and carpets.
Recognition of Exporters:
Exporters recognized with ‘status’ based on export performance will now participate as partners in capacity-building projects. They will use their best efforts to assist India in creating a trained labor pool. This pool can support a $5 trillion economy before 2030. We have recalibrated the status recognition requirements to increase the number of exporting companies receiving 4 and 5-star ratings. This has improved branding potential in export markets.
Promoting Export from the Districts:
Foreign Trade Policy, in conjunction with State governments, is advancing the Districts as Export Hubs (DEH) initiative. This aims to encourage district-level exports and accelerate the creation of a grassroots trade ecosystem. An institutional system will facilitate this. The State Export Promotion Committee and District Export Promotion Committee at the State and District levels, respectively, will work to identify export-worthy goods and services. They will also address issues at the district level.
Streamlining SCOMET Policy:
India is strengthening the SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) policy regime. This aims to implement the international treaties and accords it has signed. A strong export control system in India will enable exporters to access dual-use, high-end goods, and technologies. It will also ease the export of SCOMET-controlled commodities and technologies from India.
Facilitating E-Commerce Exports:
Exports through e-commerce are a potential sector that requires different types of policy interventions than conventional offline trade. By 2030, e-commerce exports could reach between $200 and $300 billion. FTP 2023 outlines the goal and plan for creating e-commerce hubs. This includes aspects like payment reconciliation, bookkeeping, returns policy, and export entitlements. FTP 2023 has increased the consignment-based limit for courier-based e-commerce exports from $5 lakh to $10 lakh. Based on exporters’ feedback, this cap will either be further modified or ultimately eliminated. Exporters can make FTP claims once courier and postal exports integrate with ICEGATE.
Facilitation under the Export Promotion of Capital Goods (EPCG) Scheme:
The EPCG Scheme allows the import of capital goods at zero Customs duty for export production. It is undergoing further rationalization. Key changes include: The Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme is now eligible to claim benefits under the Common Service Provider (CSP) Scheme of the Export Promotion Capital Goods (EPCG) Scheme.
The dairy sector is exempt from maintaining Average Export Obligation. This supports technological upgrades in the industry. Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment and Recycling, Rainwater harvesting systems and Rainwater Filters, and Green Hydrogen are now eligible for reduced Export Obligation requirements under the EPCG Scheme.
Facilitation under Advance Authorization Scheme:
The Advance Authorization Scheme allows DTA units to import raw materials duty-free for manufacturing export items. This places them on par with EOU and SEZ schemes. However, DTA units can flexibly produce for both domestic and export markets. Based on interactions with industry and Export Promotion Councils, we have added certain facilitation provisions in the current foreign trade policy(FTP).
We have extended the Special Advance Authorization Scheme to the export of the Apparel and Clothing sector under para 4.07 of HBP on a self-declaration basis. This enables prompt execution of export orders. Norms will be fixed within a set timeframe.
Benefits of Self-Ratification Scheme for fixation of Input-Output Norms are extended to 2-star and above status holders. This is in addition to Authorized Economic Operators at present.
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