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Foreign Trade Policy 2023 Unveiled: Ministry of Commerce and Industry

Foreign Trade Policy 2023 Unveiled: Ministry of Commerce and Industry

Reported By: Ankita Bhardwaj

Piyush Goyal, Minister of Commerce and Industry, has announced the new Foreign Trade Policy 2023 intending to boost exports amidst slowing global trade. The policy will focus on the internationalisation of trade in rupees and will attempt to take India’s goods and services exports to $2 trillion by 2030. The new FTP  will come into effect from April 1, 2023. It is expected that via this policy, India’s total exports in FY 2023 are projected to cross $760 billion as against $676 billion in 2021-22. The policy will overall promote ease of doing business through collaboration with exporters, states, districts, and Indian Missions.

Some key highlights of the policy are:

1) The government reiterated sector-specific targets to achieve the goal of $1 trillion in merchandise exports and $1 trillion in services exports by 2030. 

2) Under the new policy, Faridabad, Moradabad, Mirzapur and Varanasi have been declared as towns of export excellence for apparel, handicrafts, handmade carpet and dari, and handloom and handicraft categories, respectively. These are in addition to the existing 39 towns under the category. 

3) Changes for trade settlement in Rupee introduced in FTP for grant of export benefits, DGFT said. Provisions for merchanting trade to be introduced under FTP. 

4)  The DGFT said that the FTP 2023 will encourage e-commerce export, which is expected to grow to $200-300 billion by 2023.

5)  Foreign Trade Policy 2023-28 has introduced an amnesty scheme for one-time settlement of default in export obligation, Sarangi said.  

6) Under the new policy, the dairy sector has been exempted from maintaining average export obligation.   

7) A special advance authorisation scheme has been extended to apparel and clothing.  

8) Under the new policy, the value limit for exports through courier services increased to Rs 10 lakh from Rs 5 lakh per consignment.  

9) The ministry also rationalised the export performance threshold for recognition of exporters through status holders. This will enable more beneficiaries to achieve higher recognition and reduce transaction costs for exports. 

10) FTP 2023 will encourage e-commerce exports, which are expected to grow to $200-300 billion by 2023. 

11)  Under the new FTP 2023, a designated zone with a warehousing facility will be created. These will be designed to help e-commerce aggregators for easy stocking, customs clearance and returns processing. Processing facility to be allowed for last mile activities such as labelling, testing, repackaging etc. 

12) FTP 2023 is also aimed at streamlining the SCOMET policy, which covers special chemicals, organisms, materials, equipment and technologies. The policy for the export of dual-use items under the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) has been consolidated in one place for ease of understanding and compliance by the industry. 

Some of the sectors that will be majorly benefiting from the new FTP are: 

  •  PM Mega Integrated Textile Region and Apparel Parks additional scheme to claim benefits under CSP.  
  • The dairy sector gets benefits and will be exempted from maintaining the average export obligation.  
  • Battery electric vehicles and vertical farming equipment are added to the green technology product. 
  • Wastewater treatment and recycling, rainwater harvesting system added to green technology products.  
  • Rainwater filters and green hydrogen are added to green technology products.  
  • Green technology products are eligible for reduced export obligation requirements under the EPCG scheme.