India has launched its new Foreign Trade Policy (FTP) 2023, with the goal of reaching USD 2 trillion in exports by 2030. The policy differs from previous five-year announcements, as it has no specific end date and will be reviewed and revised as needed. The FTP 2023 emphasizes a shift from incentive-based approaches to remission and entitlement-based measures, as well as recognizing the potential of e-commerce exports and introducing policy interventions to facilitate the growth of this sector. The policy also includes an amnesty scheme for the one-time settlement of export obligation defaults and identifies four new Towns of Export Excellence (TEE) under the Market Access Initiative (MAI) scheme, which is expected to boost exports of handlooms, handicrafts, and carpets. The policy measures introduced are expected to help India achieve its goal of increasing exports and contributing significantly to its export growth.
Key highlights:
- The new Foreign Trade Policy (FTP) 2023, announced by Commerce and Industry Minister Piyush Goyal, will take effect from April 1, 2023.
- The FTP aims to increase India’s exports to USD 2 trillion by 2030 and has no specific end date, but will be updated as needed. India is expected to end the current fiscal year with total exports of USD 760-770 billion, up from USD 676 billion in 2021-22.
- The policy identifies four new Towns of Export Excellence (TEE) – Faridabad, Moradabad, Mirzapur, and Varanasi – in addition to the existing 39 TEEs. The policy extends FTP benefits to e-commerce exports and increases the value limit for exports through courier services.
- The new FTP also seeks to make the Indian rupee a global currency, introduces an amnesty scheme for export obligation defaulters, and exempts the dairy sector from maintaining an average export obligation.
Industry viewpoints
Ushik Gala,Chairman & Managing Director, Suumaya Industries Ltd
“The Indian government and policymakers have made a strategic move with the launch of the new Foreign Trade Policy (FTP), which focuses on the “Make for world” concept. This policy aims to achieve a target of $2 trillion in exports by 2030. Unlike the previous FTP (16-20) which focused on the “Make in India” concept and FDI, the new policy introduces several lucrative schemes that promote Indian manufacturing and trading markets to enter the global market. As a conglomerate company, we believe that this new FTP will propel us to new heights in the trading, manufacturing, e-commerce, and supply chain domains over the next five years. One of the significant highlights of the new policy is the extension of the Special Advance Authorization scheme to the apparel and clothing segment, which will support the apparel manufacturing segment and e-commerce domain.
We are optimistic that the new policy will have a particular emphasis on online exports, which could help India achieve its $1 trillion export target by 2030. The emergence of e-commerce as a channel for Indian traders has gained significant importance over the years as exporters can directly sell their products to overseas customers without investing in a physical office setup to tap the customers.”
JB Singh, Director MOVIN Express
“We welcome the launch of the new Foreign Trade Policy and its focus on promoting collaboration with exporters, states, districts, and India’s Missions to drive export growth. The FTP 2023 is designed to be dynamic and adaptable to emerging trade circumstances. The policy’s emphasis on e-commerce and export hubs, as well as the amnesty scheme for one-time settlement of export obligation defaults, are positive steps towards achieving the goal of $2 trillion exports by 2030. We are committed to working closely with our partners and stakeholders to leverage these opportunities and drive economic growth in India” said JB Singh, Director MOVIN Express.
Nisschal Jaain, Founder and CEO, Shypmax
“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 new policy entails the roadmap to take India’s goods and services exports to $2 trillion by 2030. The move to focus on emerging areas like e-commerce and export hubs while promoting ease of doing business through collaboration with exporters, states, districts, and Indian Missions, is commendable. 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 USD 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).”