Introduction

• The government has unveiled its new Foreign Trade Policy 2023 (FTP 2023) which came into force on 1 April. 
• The previous policy, launched in 2015, had to be extended several times due to the pandemic and geo-political developments. 

Key Changes

• The government has broken away from the conventional practice of setting a five-year cycle. 
• The new policy is intended to be responsive to changing circumstances and will be modified as and when required. 
• Additionally, the government will consistently gather input from relevant stakeholders to enhance and revise the policy.

What are its key thrust areas?

• It has four pillars. These are: 
  • replacing the incentive-based system of promoting exports with remission and entitlement-based regimes; 
  • facilitating enhanced collaboration among exporters, states, districts and Indian missions; 
  • reducing transaction costs and introducing e-initiatives for ease in business operations; and 
  • developing additional export hubs. 

What are the goals and targets?

• The government aims to increase India’s overall exports to $2 trillion by 2030, with equal contributions from the merchandise and services sectors. 
• The policy will prioritize enhancing the ease of doing business and targets emerging sectors, such as e-commerce and export hubs.
• Under FTP 2023, the towns of Faridabad, Moradabad, Mirzapur, and Varanasi have been newly designated as Towns of Export Excellence (TEE) for apparel, handicrafts, handmade carpets and dari, and handloom and handicraft products, respectively. These additions expand the TEE list to 43 towns.
• Also, the dairy sector will be exempted from maintaining average export obligations under the new policy.
• Further, the special advance authorization scheme has been extended to apparel and clothing. Under the Advance Authorization Scheme, inputs required for manufacturing export products can be imported duty-free. 
• The new FTP aims to boost the internationalization of trade in rupees by allowing international trade settlement in India’s currency.