Foreign Trade Policy

• The Foreign Trade Policy (FTP) 2023 is a policy framework announced by the Government of India to provide policy continuity and a responsive framework for foreign trade. 
• It was introduced after the extension of the previous FTP 2015-20 due to the COVID-19 pandemic and volatile geopolitical scenario until 31 March 2023.
• The FTP 2023 aims to streamline processes, update policies and procedures, and promote exports through incentives, tax remission, and greater trade facilitation through technology, automation, and continuous process re-engineering. It also focuses on emerging areas such as e-commerce exports, developing districts as export hubs, and streamlining SCOMET policy.

Key Highlights of the Foreign Trade Policy 2023 include:

1. Online approvals without physical interface: The policy allows for automatic approval of various permissions under the FTP based on process simplification and technology implementation, reducing processing time and facilitating immediate approval of applications under the automatic route for exporters.
2. Reduction in user charges for MSMEs under AA and EPCG: The application fee for Advance Authorization and EPCG Schemes is being reduced, benefiting 55-60% of exporters who are MSMEs.
3. E-Certificate of Origin: The policy proposes revamping the e-Certificate of Origin platform to allow for self-certification of CoOs as well as automatic approval of CoOs where feasible. It also envisions initiatives for the electronic exchange of CoO data with partner countries.
4. Paperless filing of export obligation discharge applications: All authorization redemption applications will be paperless, making the entire lifecycle of the authorization paperless.
5. Status Holder Export Thresholds Rationalised: The export performance threshold for Recognition of Exporters as Status Holders has been rationalized, enabling more exporters to achieve higher status and reducing transaction costs for exports.
6. Merchanting trade reform: The policy allows for merchanting trade involving the shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary subject to compliance with RBI guidelines, except for goods/items in the CITES and SCOMET list.
7. Rupee payment to be accepted under FTP Schemes: The policy accepts Rupee payment under FTP Schemes, effectively taking a step towards the internationalization of the Rupee. FTP benefits are extended for Rupee realizations through special Vostro accounts set up as per the RBI circular issued on 11 July 2022.
8. Towns of Export Excellence: Four new towns of export excellence have been declared, in addition to the already existing 39 towns of export excellence, to give thrust to cluster-based economic development.
9. Districts as Export Hubs initiative: The policy aims to boost India's foreign trade by decentralizing export promotion, bringing a greater level of awareness and commitment regarding exports at the district level, and creating institutional mechanisms at the state and district level to strategize exports. The initiative includes the preparation of District Export Action Plans outlining the action plan to promote identified products and services.