Foreign trade policy may be released in April

The policy may leave scope for intervention to resolve immediate issues, and outline measures to expedite clearances and reduce physical interface.

The new FTP comes at a time when India’s outbound shipments have started declining due to slowing demand in advanced economies. The official said the long-term vision may recommend measures to achieve exports worth $1 trillion by 2030. These could include setting up economic zones outside India as part of the Atmanirbhar Bharat initiative and diversifying into exports of services outside the US and the European Union.

“We are looking at a dynamic foreign trade policy that lays out a vision covering multiple sectors that will facilitate achieving long-term goals. When policy reforms are needed, one cannot wait for five years is… Government is continuously doing IT enablement and changes… Earlier, exporters had to wait for five years of foreign trade policy to start any new scheme, like duty exemption scheme, etc. We earlier Already did so and did not wait for the FTP to start,” said the official on condition of anonymity.

The final decision on the declaration of FTP will be taken at the highest government level in March. According to the official quoted above, the FTP could have three new chapters – e-commerce, districts as export hubs and SCOMET (dual-use items used for civil/industrial and military use).

FTP is a set of guidelines and instructions established by the Director General of Foreign Trade (DGFT) of India in matters relating to import and export of goods. The government in September postponed the FTP for 2022-27, which was to be announced on September 30 as last-minute changes to the plans.

The government expects exports to remain flat at $417 billion in the current fiscal, as against the earlier expectation of $470 billion.

Exports fell 12.2% to $34.5 billion in December from a year earlier as a recessionary outlook in many advanced and emerging economies dampened consumer demand. This was the second such decline in FY23.

The government last year introduced WTO-compliant schemes, including the Remission of Duties and Taxes on Export Products (RoDTEP) and the Remission of State and Central Levies and Taxes (ROSCTL) schemes.

The Foreign Trade Policy 2015-20, which was to expire on 31 March 2020, has been extended four times so far, first due to the COVID-19 pandemic, and more recently due to global economic uncertainty. It is now valid till March 31.

An emailed query to the Department of Commerce remained unanswered till press time.

Federation of Indian Export Organizations (FIEO) director general and CEO Ajay Sahai said he expects the new FTP to lay out a roadmap for exports in the medium to long term, with an aim to reach $1 trillion each in goods and services exports. Will be the goal of. 2030, by striking a balance between traditional exports and sunrise sectors of exports – the former as an effective tool of employment generation, and the latter to align India’s exports to the global import profile. “A comprehensive FTP to address supply-side issues ranging from liquidity to logistics is needed over time, albeit within the ambit of WTO discipline,” Sahai said.

The commerce department is likely to propose developing 50 districts as export hubs in the first phase, which will be part of the FTP, and take it to the cabinet for approval, according to a second official, with the aim being to help domestic producers. The districts scale up manufacturing and find potential buyers outside India to boost exports. It will probably be proposed as a centrally sponsored scheme, with the center paying 60% of the estimated cost 50 crore per district

The second official said the chapter on e-commerce is likely to focus on e-commerce exports, which have not received any special incentives so far. The move is aimed at encouraging smaller players to tap overseas markets for growth and to accelerate exports of Geographical Indication (GI) products under the ‘One District One Product (ODOP)’ initiative. This will essentially help in enabling the facility in case of speedy approval.

Sanjay Budhia, Chairman, CII’s National Committee on EXIM, said exporters are anxiously waiting for the new FTP as the global export situation has changed a lot since the last FTP came out. “We have presented various inputs to the government for its formulation… Exporters expect the FTP to address diversification of export basket, expansion of markets, right incentive policies and ease of doing business,” Budhia said.

Praveen Khandelwal, general secretary, Confederation of All India Traders (CAIT), who is also a part of the trade body, said the policy should be planned in the backdrop of domestic trade. “It has to be planned that the policy should be formulated in such a way that the flow of goods and services from within the country to the outside world policy is a priority. It should be such that foreign goods and services do not eat up the domestic market.” Khandelwal said.