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CENTRAL UNIVERSITY KASHMIR, GREEN CAMPUS.

DEPARTMENT OF ECONOMICS.

REVIEW ON INDIAN FOREIGN TRADE

POLICY-2023.

● NAME: MUTEEBA SHOWKAT.

● ENROLMENT NO.: 2305-CUKmr-22 / SEM 1
● (BATCH 2023)

● COURSE TITLE: INTERNATIONAL ECONOMICS

● COURSE CODE: MEC-C-2314
● INCHARGE: DR. TOSIB ALAM

SIGNATURE ______________

DATE________________
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ABSTRACT:

The tenure of FTP 2015-2020 was completed on 31st March 2020 , but owing to the pandemic, it was extended
up to 31st March 2023. The EXIM policy was announced on 31st march 2023 by Union Minister of
Commerce and Industry –Shri Piyush Goyal.It is based on principles of ‘trust’ and ‘partnership’ with
exporters.The FTP 2023 aims at process re-engineering and automation to facilitate ease of doing business for
exporters. It aims to boost exports to $2 trillion by 2030, using E-commerce as its major tool for achieving
the said target, and also developing districts as export hubs.The new FTP is introducing a one-time Amnesty
Scheme for exporters to close the old pending authorizations and start afresh.The government also intends to
encourage the use of the Indian currency in cross border trade, aided by a new payment settlement
framework introduced by the RBI in July 2022.

OBJECTIVES OF FTP 2023

● To integrate India with the global markets: As India is on the path to becoming a developed
nation(VIKSIT BHARAT) by 2047, the policy lays down a blueprint to integrate India with the global
markets and make it a reliable and trusted trade partner.

● To build a future-ready India: fulfill India's strategic vision of making India one of the top
exporting nations in the ‘Amrit Kaal’.

● To create an enabling ecosystem: The approach of this FTP is to gradually move away from an
incentive-based regime and create an enabling ecosystem to support the philosophy of ‘Atma Nirbhar
Bharat’ and ‘Local goes Global’

● To collaborate with state governments: To build and encourage export promotion at the district
level.

● To triple India’s goods and services exports: The new policy will replace the existing policy that
had been in place since 2015. The new policy aims to almost triple India’s goods and services exports to
$2 trillion by 2030, from an estimated $760 billion in 2022-23.

HIGHLIGHTS OF FTP 2023.

● National Committee on Trade Facilitation (NCTF):. To facilitate coordination and
implementation of the World Trade Organization’s Trade Facilitation Agreement (TFA) provisions, an
inter-ministerial body i.e. the National Committee on Trade Facilitation (NCTF) has been constituted.

● DGFT as a facilitator of exports/imports: DGFT has the commitment to function as a facilitator

and not regulator of exports and imports.

● Export of perishable agricultural products: To reduce transaction and handling costs, a single
window clearance system to facilitate the export of perishable agricultural produce is being facilitated
through the Agricultural and Processed Food Products Export Development Authority (APEDA).
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● Niryat Bandhu: As a hand-holding scheme for new export/import entrepreneurs, DGFT is
implementing the Niryat Bandhu Scheme for mentoring new and potential exporters on the intricacies
and procedures of foreign trade.

● Merchanting trade :Merchanting trade of restricted and prohibited items under export policy would
now be possible.

● Online facility for e-Certificate of Origin (e-CoO): DGFT has created a common digital platform
for the issue of Preferential and Non-Preferential Certificate of Origin (e-CoO) by designated agencies.

● Facilitating E-Commerce Exports: The consignment-wise cap on E-Commerce exports through

courier has been raised from ₹5 Lakh to ₹10 Lakh in the FTP 2023.

● Dak Ghar Niryat Kendras shall be operationalised throughout the country to work in a
hub-and-spoke model with Foreign Post Offices (FPOs) to facilitate cross-border e-Commerce and to
enable artisans, weavers, craftsmen, MSMEs in the hinterland.

● Towns of Export Excellence (TEE): Four new towns, namely Faridabad, Mirzapur, Moradabad,
and Varanasi, have been designated as TEE in addition to the existing 39 towns. These towns that are
doing well in exports of specific goods and services are identified and provided by better infrastructure
facilities.This addition is expected to boost the exports of handlooms, handicrafts and carpets

● Recognition of Exporters: star exporting houses' based on export performance will now be partners
in capacity-building initiatives. 2-star and above status holders would be encouraged to provide
trade-related training to interested individuals.

● The EPCG Scheme, which allows the import of capital goods at zero customs duty for export
production, is being further rationalized.

● Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment
and Recycling, Rainwater harvesting system and Rainwater Filters, and Green Hydrogen are added to
Green Technology products – will now be eligible for reduced Export Obligation requirement under
EPCG Scheme

● Amnesty Scheme:.Government is strongly committed to reducing litigation and fostering trust-based

relationships to help alleviate the issues faced by exporters.

In line with “Vivaad se Vishwaas” initiative, which sought to settle tax disputes amicably, the
government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default
on Export Obligations.This scheme is intended to provide relief to exporters who have been unable to
meet their obligations under EPCG, and who are burdened by high duty and interest costs associated
with pending cases.

REVIEW ON FOREIGN TRADE POLICY-2023.

Assessing the success of FTP2023 is still too early, given we're still in January 2024. However, initial indicators
are promising. The policy focuses on boosting exports through ease of doing business, e-commerce initiatives,
and support for MSMEs.. Time will tell if it achieves its target of $2 trillion exports by 2030, but positive
feedback from industry suggests FTP 2023 is on the right track.
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However, there are some loopholes in the said policy. That are mentioned below:-

● Ambitious Target: The $2 trillion export target by 2030 seems ambitious, requiring aggressive
policy measures and significant infrastructure upgrades. Achieving this target solely through traditional
sectors might be challenging, necessitating diversification.

● Implementation Challenges: Effective execution of the policy hinges on efficient administrative

capabilities and robust technical infrastructure, which may not be uniformly available across all regions.

● Limited Scope: While the policy addresses e-commerce and district-level development, it may not
adequately cater to diversifying export categories beyond traditional sectors like textiles and
pharmaceuticals. This could limit India's export potential in emerging markets and high-value goods.

● Import Neglect: The focus on exports overshadows the importance of a balanced trade approach.
Neglecting import management could lead to trade deficits and hinder domestic industries competing
with foreign imports.

● Sustainability Concerns: The policy lacks explicit consideration for environmental and social
sustainability in trade practices. Integrating these principles could ensure long-term economic growth
while protecting the environment and promoting ethical trade practices.

CONCLUSION
FTP 2023 is an advancement from FTP 2020, as it has improved the ease of doing business, and has
sought to facilitate the international trade practices of India, however there are some areas where
improvement is possible, such as traditional sectors needs to be balanced with diversification, into new
areas like green technologies and high-value services. The real key to FTP 2023's success lies in
continuous monitoring, evaluation, and adaptation. Leveraging technology, investing in skills,
developing strategic partnerships, and integrating sustainability considerations are essential steps
forward.