The Commerce and Industry Ministry is working on implementing the new Foreign Trade Policy (FTP) on April 1, with officials giving the draft a final go-through, but a decision on its duration is yet to be taken, a source close to the development said.
“As decided earlier, there would be no big bang announcement on incentives as export sops are not compatible with WTO rules. The policy, however, will have a vision statement for future growth and various facilitating provisions in areas such as automation, IT enablement, trade facilitation, cost reduction, support for MSMEs, promotion of e-commerce, R&D, and district export hubs,” the source said.
‘Focus on policy’
Earlier this week, Commerce and Industry Minister Piyush Goyal also indicated that the new FTP could be announced soon and said officers were now focussed on it. “I have instructed my officials to start concentrating on the FTP as we are now free from the parliamentary (budget process),” he said in a post-budget interaction.
The new FTP, which was initially scheduled to be announced in 2020, has been postponed several times for various time durations, mainly to tide over the uncertainties created by the Covid-19 pandemic. The government had been extending the previous FTP (2015–20) on a piecemeal basis. The last extension was on October 1, 2022, until March 31, 2023.
While FTPs are usually for a five-year period, it is not yet certain whether the new policy will be for a full five-year period or of a different duration given the fact that it could not be executed on schedule in April 2020. The general elections scheduled in 2024 may also have some bearing on the duration of the new FTP, another source said.
“We are not sure whether the government will finally come up with a new FTP on April 1 as the uncertainty in the global economy is continuing. “Given the fact that there are elections next year, it might be more logical to come up with a new policy after the process is over and the new government is sworn in,” a Delhi-based exporter told businessline.
India’s goods exports, at the moment, are going through a difficult period due to a slowdown in global demand. High global inflation, rising interest rates, and key economies moving towards recession have all contributed in making the future uncertain.
After reaching an all-time high of $422 billion in goods exports in 2022–23, the country’s exports started slowing down in July 2022. It declined in October 2022, for the first time in the on-going fiscal year, falling 16.6 per cent (year-on-year) to $29.78 billion. It rose marginally by 0.6 per cent to $32 billion in November 2022 before declining again in December 2022 by 12.2 per cent (year-on-year) to $34.48 billion.