Therecently announced revised Foreign Trade Policy (FTP) 2023 will aid in the promotion of exports of sectors like as e-commerce, batteries for electric vehicles, and agriculture equipment, analysts said on Tuesday. Amid global uncertainty, India announced a new policy on March 31 aimed at expanding rupee trade, raising outbound shipments to USD 2 trillion by 2030, and supporting e-commerce exports.

What is Foreign Trade Policy 2023?

ForeignTrade Policy (FTP) 2023 is creative and distinct from its predecessors. Unlike previous FTPs, which included new programs and incentives, this FTP is an exception. It attempts to shift away from an incentive-based regime and towards the development of an enabling ecosystem for Indian exporters.

Thisis because the US contested a number of our export-linked subsidies, including some offered under the previous FTP (for 2015-20), as banned subsidies under the World Trade Organization's (WTO) Agreement on Subsidies and Countervailing Measures. In 2019, India lost the WTO lawsuit and was forced to withdraw these subsidies or replace them with WTO-compliant supports such as the Remission of Duties and Taxes on Export Products (Rodtep) Scheme, which replaced the prior Merchandise Exports from India Scheme (MEIS).

Thenew FTP has shifted away from announcing new subsidies and towards supporting the integration of Indian small and medium-sized companies (SMEs) into global value chains.

Foreign Trade Policy- Recent Notification

RumkiMajumdar, Economist at Deloitte India, stated that the policy places a long-term priority on the manufacturing and export industries.

Sectorssuch as batteries for electric vehicles, green hydrogen, and clothing, among others, will gain from the strategy, she said, adding that with over 80% of trade is done in USD, increasing trade in Indian rupees will be a relief.

Itwill also strengthen its resilience to external shocks and boost its bargaining power in international trade "Majumdar explained.

Accordingto Shashi Mathews, Partner at IndusLaw, the government's goal with the policy is to digitise and re-engineer processes to make them more business-friendly and less time-consuming.

However,some major aim areas that will profit include e-commerce, merchanting trade, green technology products such as EVs, and farming equipment.

Accordingto India export import data, the Chairperson of the CII NationalCommittee on Exports and Imports, the new policy will reignite business sentiment and help India reach its aspirational goal of becoming a global leader in exports.

"Thenew FTP's reduction of the export performance criterion is a welcome step because it will allow more exporters to obtain better status and lower transaction costs for exports. According to Indian import export data “The policy places a heavy emphasis on transaction cost reduction, internationalization of the INR, and e-commerce.

Certain Highlights of the New Policy 

• The new Policy will be in effect until it is repealed. That is, the new Policy does not include the standard 5-year sunset clause that was previously included.
• All redemption authorization applications will be paperless.
• The export performance criterion for recognizing exporters as Status Holders has been reduced, making it easier for more exporters to acquire higher status.
• All FTP advantages will be extended to e-Commerce exports.
• For MSMEs, the application fee for advance authorization and EPCG schemes would be decreased.
• The dairy industry has been spared from the EPCG scheme's average export obligation.
  

The Indian Ministry of Commerce andIndustry unveiled Foreign Trade Policy 2023 on March 31, 2023, with a new approach of tax remission rather than incentives; greater trade facilitation through technology, automation, and continuous process re-engineering; export promotion through collaboration; and a focus on emerging areas such ase-commerce exports, developing districts as export hubs, streamlining SCOMET policy, and so on. So, if you have any query related to India import export data, Trade Data, or HS Code related queries, please connect with Seair Exim Solutions professionals, as we are always ready to provide you withthe best for your business.