Foreign Trade Policy 2023

Foreign Trade Policy 2023

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April 04, 2023

The Foreign Trade Policy 2023 was introduced by the Union Minister of Commerce and Industry. Consumer Affairs, Food and Public Distribution, and Textiles. The Key Approach to Foreign Trade Policy is built around four pillars:

1. Remission Incentive

2. Collaboration for export promotion - Exporters, Indian Missions, Districts, States, etc

3. Convenience in conducting business, lower transaction costs, and e-initiatives

4. New Markets - E-Commerce Creating Export Hub Districts and simplifying SCOMET policies

Foreign Trade Policy Features in 2023

• There will be no expiration date for the new policy, and it will be changed based on the growing global trade picture and industry feedback. While the policy will be indefinite, the schemes authorised according to it will be limited in time.

• Other than a one-time moratorium under the existing Advance Authorisation and Export Promotion Capital Goods (EPCG) schemes, which enable imports of capital goods subject to specific export responsibilities, there are no substantial new programs.

• The Policy had created a new category of possible exports known as "merchanting trade."

• Merchanting commerce refers to the shipping of commodities from one foreign country to another without passing through Indian ports and utilising an Indian middleman. This will also allow for the export of banned products.

• Four Uttar Pradesh cities — Faridabad, Moradabad, Mirzapur, and Varanasi — have been designated as centre of export excellence for their achievements in clothing, handicrafts, handmade carpets, and handlooms, respectively.

• It is also considering lowering the qualifying requirements for star ratings, which honour exporters based on their export performance

• The significance of expediting the export of dual-use commodities through the SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) Licencing Procedure.

• A one-time special amnesty programme for export obligations default.

• Within the novel foreign trade stratagem, the dairy industry sector will be freed from preserving medium export obligations, and a distinct advance authorisation procedure has been protracted to clothes and textiles.

Increasing manufacturing - Under this strategy, the following initiatives would be pursued to increase manufacturing in India:

• The Prime Minister Mega Integrated Textile Region and Apparel Parks Scheme has been included as an additional scheme eligible for benefits under the Export Promotion Capital Goods Scheme's Common Service Provider Scheme.

• Exemption from maintaining Average Export Obligation for the dairy industry - to assist the dairy sector in upgrading technology.

• All forms of battery electric vehicles, vertical farming equipment, wastewater treatment and recycling, rainwater harvesting systems and rainwater filters, and green hydrogen have been added to the list of Green Technology items that are now eligible for reduced export obligations under EPCG.

• Scheme Advance Special Authorization Scheme expanded to export of Apparel and Clothings ector on self-declaration basis under paragraph 4.07 of HBP to allow fast execution of export orders - Norms would be defined within a fixed time-frame.

• The benefits of the Self-Ratification Scheme for the fixing of Input-Output Norms have now been extended to 2-star and above status holders, in addition to Authorised Economic Operators.

• Exporters of fruits and vegetables are given double weightage when calculating export performance under the qualifying requirements for Status House accreditation. This is in conjunction with the current MSME sector, which receives double weightage.

Source - Financial Times