India Unveils New Foreign Trade Policy 2023 Unlike previous policies that were announced for five years, the FTP 2023 reportedly has no end date and will be updated as needed
By Teena Jose
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Commerce and industry minister Piyush Goyal on Friday unveiled the Foreign Trade Policy (FTP) 2023 to promote India's exports to $2 trillion by 2030. The FTP 2023 will come into effect on April 1, 2023.
"We have to meet our export target going forward. We will achieve $2 trillion in exports by 2030, but should ensure merchandise exports don't fall behind service exports," said Goyal in a statement.
According to reports, under the new policy, provisions for merchanting trade are also proposed. A merchanting transaction is one which involves the shipment of goods from one foreign country to another foreign country involving an Indian Intermediary. The government believes merchanting trade is expected to facilitate trade, making India a trade hub. Also, four new towns of export excellence (TEE) are being declared in addition to the already existing 39 towns of export excellence. They are Faridabad for apparel, Moradabad for handicrafts, Mirzapur for handmade carpet and dari, and Varanasi for handloom and handicraft. The benefits of such export excellence are recognition, market access initiative scheme, and common service provider facility.
Also, unlike previous policies that were announced for five years, the FTP 2023 reportedly has no end date and will be updated as needed.
The government estimates suggest that e-commerce exports are expected to grow to $200-300 billion by 2030. The government will set sector-specific targets to achieve the goal of trillion dollar merchandise exports by 2030. The government will also restructure the Department of Commerce to make it future-ready, added the report.
India's Foreign Trade Policy is a set of guidelines for goods and services imported and exported. These are usually developed by the Directorate General of Foreign Trade (DGFT), the Ministry of Commerce and Industry's regulating body for the promotion and facilitation of exports and imports. The Government, through the policy, primarily focuses on adopting a twin strategy of promoting traditional and sunrise sectors of exports including services.
Commenting on the FTP 2023, Nisschal Jaain, Founder and CEO, Shypmax, a cross-border logistics platform, has said that, "Amid the interim slowdown in the otherwise booming global trade especially with regards to the Indian Exim landscape, the Foreign Trade Policy (FTP) 2023 provides the right impetus to EXIM, e-commerce, as well as logistics stakeholders to boost exports. The decision to increase the value limit for exports through courier services from INR 5 lakh to INR 10 lakh per consignment, provides the much needed boost to the logistics sector. With this, the e-commerce exports are expected to grow to $200-300 billion by 2030. By minimising the export license fees from around 100,000 to 5,000, MSMEs have been given their due share of relief. This will also expand the horizons of the export market in India and make India's a far more competitive ecosystem. Another factor which strengthens India's footing in the global market is the internationalisation of rupee which comes off as very beneficial for exporters. Their dependency on dollar pricing will start to decline. Additionally, 4 new towns of excellence along with 39 existing towns will focus on exports of handicrafts, handlooms supporting the small-scale artisans. All in all, when these orders come into effect, logistics stakeholders including logistics players will witness a competitive environment in terms of export orders, trade and employment opportunities. This has to be the FTP of Amrit Kaal due to its focus on small and new-age businesses (e-commerce)."
