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Why in News?
- Union Minister of Commerce and Industry, Shri Piyush Goyal, recently launched the Foreign Trade Policy 2023.
What’s in today’s article?
- About FTP 2023 (Objective, Key Highlights of the Policy, etc.)
About Foreign Trade Policy 2023:
- Foreign Trade Policy (2023) is a policy document which is based on continuity of time-tested schemes facilitating exports as well as a document which is nimble and responsive to the requirements of trade.
- The Key Approach to the policy is based on these 4 pillars –
- Incentive to Remission,
- Export promotion through collaboration – Exporters, States, Districts, Indian Missions,
- Ease of doing business, reduction in transaction cost and e-initiatives and
- Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy.
Key Highlights of FTP 2023:
- Process Re-Engineering and Automation –
- Greater faith is being reposed on exporters through automated IT systems with risk management system for various approvals in the new FTP.
- The policy emphasizes export promotion and development, moving away from an incentive regime to a regime which is facilitating, based on technology interface and principles of collaboration.
- FTP 2023 codifies implementation mechanisms in a paperless, online environment, building on earlier ‘ease of doing business’ initiatives.
- Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits.
- Duty exemption schemes for export production will now be implemented through Regional Offices in a rule-based IT system environment, eliminating the need for manual interface.
- Towns of Export Excellence –
- Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns.
- The TEEs will have priority access to export promotion funds under the MAI scheme and will be able to avail Common Service Provider (CSP) benefits for export fulfillment under the EPCG Scheme.
- Market Access Initiative (MAI) Scheme is an Export Promotion Scheme envisaged to act as a catalyst to promote India’s exports on a sustained basis.
- The objective of the Export Promotion Capital Goods (EPCG) Scheme is to facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness.
- This addition is expected to boost the exports of handlooms, handicrafts, and carpets.
- Recognition of Exporters –
- Exporter firms recognized with ‘status’, based on export performance, will now be partners in capacity-building initiatives.
- Similar to the “each one teach one” initiative, 2-star and above status holders would be encouraged to provide trade-related training based on a model curriculum to interested individuals.
- This will help India build a skilled manpower pool capable of servicing a $5 trillion economy before 2030.
- Status recognition norms have been re-calibrated to enable more exporting firms to achieve 4 and 5-star ratings, leading to better branding opportunities in export markets.
- Promoting Export from the Districts –
- The FTP aims at building partnerships with State governments and taking forward the Districts as Export Hubs (DEH) initiative to promote exports at the district level.
- District specific export action plans to be prepared for each district outlining the district specific strategy to promote export of identified products and services.
- Streamlining SCOMET Policy –
- India is placing more emphasis on the “export control” regime as its integration with export control regime countries strengthens.
- There is a wider outreach and understanding of SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) among stakeholders.
- Facilitating E-Commerce Exports –
- E-commerce exports are a promising category that requires distinct policy interventions from traditional offline trade.
- Various estimates suggest India’s e-commerce export potential in the range of $200 to $300 billion by 2030.
- FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and related elements.
- As a starting point, the consignment wise cap on E-Commerce exports through courier has been raised from ₹5Lakh to ₹10 Lakh in the FTP 2023.
- Facilitation under Export Promotion of Capital Goods (EPCG) Scheme –
- The EPCG Scheme, which allows import of capital goods at zero Customs duty for export production, is being further rationalized.
- Facilitation under Advance authorization Scheme –
- Advance authorization Scheme accessed by Domestic Tariff Area (DTA) units provides duty-free import of raw materials for manufacturing export items.
- Based on interactions with industry and Export Promotion councils, certain facilitation provisions have been added in the FTP 2023.
- Amnesty Scheme –
- Finally, the Government is strongly committed to reducing litigation and fostering trust-based relationships to help alleviate the issues faced by exporters.
- In line with “Vivaad se Vishwaas” initiative, which sought to settle tax disputes amicably, the government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default on Export Obligations.
- This scheme is intended to provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations.