Model Answer
0 min readIntroduction
India’s Foreign Trade Policy (FTP) serves as a framework for promoting exports and facilitating trade. The New FTP 2023-28, announced on March 31, 2023, replaces the previous policy (2017-22) and aims to boost India’s exports to $2 trillion by 2030. It shifts from a primarily incentive-based regime to a scheme based on rewards, recognizing export performance. This policy is particularly significant in the context of global economic uncertainties, supply chain disruptions, and India’s ambition to become a leading global trading nation. The FTP 2023 emphasizes four pillars: Promotion of Exports, Development of Export Infrastructure, Streamlining Logistics, and Technology Adoption.
Salient Features of FTP 2023
1. Shift in Approach: From Incentives to Rewards
The FTP 2023 marks a significant departure from previous policies by moving away from primarily incentive-based schemes to a reward system. This is reflected in the revamped schemes like the Duty Remission Scheme and the introduction of the Advance Authorization Scheme (AAS) which are designed to reward exporters based on their performance rather than providing upfront incentives. This aligns with WTO norms and promotes a more competitive export environment.
2. One-Time Amnesty Scheme (OTS)
A one-time amnesty scheme for exporters has been introduced to settle outstanding dues under various export promotion schemes. This provides relief to exporters and allows them to focus on future export activities without the burden of past liabilities. This scheme is applicable to cases where the default was not due to any fraudulent intent.
3. Streamlining Export Procedures & Digitalization
The policy emphasizes streamlining export procedures through digitalization and automation. Key initiatives include:
- Reduced Documentation: Efforts are underway to reduce the documentation required for exports, making the process faster and more efficient.
- Online Platforms: Enhanced online platforms for applying for licenses, submitting documents, and tracking shipments.
- Integration with ICEGATE: Further integration with the Indian Customs Electronic Gateway (ICEGATE) to facilitate seamless data exchange.
4. Focus on Export Infrastructure & Logistics
Recognizing the importance of robust infrastructure, the FTP 2023 focuses on improving export infrastructure and logistics. This includes:
- Development of Export Hubs: Promoting the development of sector-specific export hubs to enhance competitiveness.
- Common Facility Centers: Establishing common facility centers to provide exporters with access to modern infrastructure and technology.
- Logistics Efficiency: Improving logistics efficiency through initiatives like the National Logistics Policy (NLP) 2023, aiming to reduce logistics costs and transit times.
5. Promoting Emerging Technologies & Diversification of Export Basket
The policy encourages the adoption of emerging technologies and diversification of the export basket. Key aspects include:
- Focus on High-Growth Sectors: Prioritizing exports in sectors like electronics, pharmaceuticals, and value-added agricultural products.
- Promotion of E-Commerce: Facilitating exports through e-commerce platforms, particularly for MSMEs.
- Support for Green Technologies: Promoting exports of green technologies and sustainable products.
6. Revamped Schemes & Incentives
Several existing schemes have been revamped or new schemes introduced:
| Scheme | Key Features |
|---|---|
| Duty Remission Scheme | Replaces the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, providing duty remission on input taxes. |
| Advance Authorization Scheme (AAS) | Allows duty-free import of inputs required for export production. |
| Export Promotion Council (EPC) | Strengthening EPCs to provide better support to exporters. |
7. Town of Export Excellence (TEE) Scheme
The FTP 2023 introduces the Town of Export Excellence (TEE) scheme to boost exports from specific regions known for particular products. This scheme aims to create a focused ecosystem for export promotion, providing infrastructure support and marketing assistance to local exporters.
8. Collaboration with States & Districts as Export Hubs
The policy emphasizes collaboration with state governments and the identification of districts as export hubs. This involves working with states to develop export infrastructure, promote investment, and streamline regulatory processes at the local level. The ‘Districts as Export Hubs’ initiative under the ODOP (One District One Product) scheme is a key component.
Conclusion
The New FTP 2023 represents a significant step towards enhancing India’s export competitiveness and achieving its ambitious export targets. The shift towards a reward-based system, coupled with a focus on digitalization, infrastructure development, and technology adoption, is expected to create a more conducive environment for exporters. Successful implementation will require effective coordination between the central government, state governments, and export promotion councils. The policy’s success will ultimately depend on its ability to address the challenges faced by Indian exporters and capitalize on emerging global trade opportunities.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.