Foreign trade is an integral part of India's economy, contributing significantly to the country's GDP. In fact, India is one of the world's largest exporters of goods and services, with exports accounting for around 20% of its GDP. However, with a constantly evolving global economy, it is essential for India to have effective policies in place to promote exports and facilitate ease of doing business for exporters. This is where the Foreign Trade Policy (FTP) comes in.
With the launch of the latest policy, FTP 2023, India is aiming to boost e-commerce exports to an estimated USD 200-300 billion by 2023, while also focusing on the "export control" regime. The FTP 2023 is based on four pillars: Incentive to Remission, Export Promotion through Collaboration, Ease of Doing Business, and Emerging Areas, with the Foreign Trade Strategy 2023-28 including an amnesty system for one-time settlement of export requirement defaults.
Key features of Indian Foreign Trade Policy 2023:
The Indian Foreign Trade Policy 2023 is aimed at boosting India's exports and promoting growth in the coming years. The key features of the policy highlight a renewed focus on compliance with regulatory requirements governing foreign trade transactions, while also promoting ease of doing business and collaboration among stakeholders. The policy is built on four pillars, namely Incentive to Remission, Export Promotion through Collaboration, Ease of Doing Business, and Emerging Areas, each aimed at promoting different aspects of India's foreign trade.
One of the significant features of the FTP 2023 is its emphasis on strengthening the export control framework by improving enforcement mechanisms and enhancing risk management systems. Additionally, the policy includes several new initiatives aimed at improving trade facilitation measures and promoting digital infrastructure development. These initiatives include the creation of a National Trade Facilitation Committee, the establishment of a Trade Analytics Division, the introduction of an Export Credit Insurance Scheme, and the creation of an e-commerce portal.
The FTP 2023 is expected to benefit businesses engaged in emerging areas such as e-commerce exports, while the policy's focus on collaboration among stakeholders and simplification of procedures will reduce transaction costs for businesses engaged in international trade. Overall, the FTP 2023 represents a significant step forward in India's foreign trade policy and is expected to promote India's economic growth through increased exports and improved trade facilitation measures.
Impact on Different Sectors & Stakeholders:
The Indian Foreign Trade Policy 2023 (FTP 2023) is expected to have a positive impact on various sectors and stakeholders. As mentioned in the previous section, the policy places a strong emphasis on ease of doing business, collaboration among stakeholders, promotion of emerging areas such as e-commerce exports, and improvement in trade facilitation measures. These features of the policy are expected to benefit different sectors and stakeholders.
The emphasis on ease of doing business and collaboration is expected to benefit MSMEs by simplifying procedures and reducing transaction costs. It will create a more supportive environment for these businesses. Furthermore, the promotion of emerging areas such as e-commerce exports is expected to benefit businesses engaged in these sectors. The new initiatives aimed at promoting digital infrastructure development, such as the creation of an e-commerce portal, will further support these businesses.
The amnesty system for one-time settlement of export requirement defaults is expected to benefit exporters who may have defaulted on their export requirements in the past. This will allow them to settle their outstanding dues by paying a reduced penalty amount.
Finally, the creation of a National Trade Facilitation Committee (NTFC) is expected to streamline trade facilitation measures and reduce transaction costs. This will improve coordination among various government agencies involved in trade facilitation measures and promote awareness among stakeholders about regulatory requirements governing foreign trade transactions.
Focus on E-commerce Exports:
The Indian Foreign Trade Policy 2023 (FTP 2023) places a strong emphasis on promoting exports in emerging areas such as e-commerce exports. The policy includes several initiatives aimed at promoting ease of doing business and collaboration for e-commerce exporters. The creation of an e-commerce portal that will serve as a one-stop-shop for all export-related services is expected to simplify procedures and reduce transaction costs for e-commerce exporters.
Additionally, the policy emphasizes collaboration among stakeholders such as government agencies, industry associations, and exporters to create a more supportive environment for e-commerce exporters. While e-commerce exports have the potential to provide businesses with increased access to global markets and improve competitiveness, there are challenges related to logistics, regulatory compliance, and data privacy/security that need to be addressed.
To sum up, the Indian Foreign Trade Policy 2023 is a forward-looking policy that emphasizes boosting exports and creating a supportive environment for businesses engaged in foreign trade transactions. The policy's four pillars, Incentive to Remission, Export Promotion through Collaboration, Ease of Doing Business, and Emerging Areas, are designed to incentivize and facilitate exports while also promoting ease of doing business and improving trade facilitation measures.
The policy's focus on e-commerce exports and collaboration among stakeholders is particularly noteworthy. However, there are challenges that need to be addressed such as logistics, regulatory compliance, and data privacy/security concerns associated with cross-border e-commerce transactions. Despite these challenges, the FTP 2023 is expected to play a crucial role in India's economic growth and help the country emerge as a global leader in the export industry.