India’s new long-term Foreign Trade Policy (FTP) has endorsed the target of achieving $2 trillion worth of goods and services exports by 2030 ($1 trillion each), while doing away with an expiry date for the document.
FTP 2023, announced by Commerce & Industry Minister Piyush Goyal on Friday, focusses on measures for boosting e-commerce exports, promoting district export hubs, streamlining policy for special chemicals, organisms, materials, equipment and technologies (SCOMET) dual goods and encouraging the MSME sector.
The policy, while moving away from incentives to tax remissions to stick to WTO rules, also provides for a special one-time amnesty scheme for default in export obligations and introduces merchanting trade reform, allowing Indian intermediaries to send shipment of goods from one foreign country to another without touching Indian ports.
“FTP 2023 is a dynamic and open-ended policy that will accommodate emerging needs,” said Goyal. Despite many international problems, combined exports of goods and services could touch $765-770 billion against $672 billion in the previous fiscal, he said. He did not give a break-up but asked exporters to ensure that goods shouldn’t lag behind services.
The government is yet to fix an export target for FY24, amid apprehensions of growth in global trade in goods slowing down to 1 per cent in 2023, compared to 3.5 per cent in 2022, as per forecast made by the WTO.
Exporters largely welcomed the decision to do away with the five-year term for the FTP and introduce changes only when needed. “This will build in more certainty as exporters will not be apprehensive of losing benefits of schemes when the fiscal year draws to a close,” said EEPC chief Arun Garodia.
The policy has rightly emphasised on the ease of doing business with reduction in transaction cost and e-initiatives, said A Sakthivel, President, FIEO. “Online approvals with physical interface, reduction in user charges for MSMEs under various schemes, e-certificate of origin, paperless filing of export obligation discharge applications will reduce transaction time and costs,” he said.
India is ready to trade in the rupee with countries which are facing currency failure or have dollar shortage, Commerce Secretary Sunil Barthwal said, adding that FTP benefits had been extended for rupee realisations through special Vostro accounts set up as per RBI regulations.