April 4, 2023
India’s new Foreign Trade Policy (FTP) was released on 31 March, 2023 and came into effect on 1 April, 2023. The new FTP was announced against the backdrop of India’s total merchandise and services exports crossing the US$750 billion mark in fiscal 2022-2023. The Commerce Minister, unveiling the new FTP, set an ambitious target of achieving US$2 trillion exports by 2030.
In this context, Pradeep S Mehta, Secretary General, CUTS International, welcomed the new FTP and observed that, “Since 2015, when the last FTP was announced, the global trading environment has undergone drastic changes. The new FTP will be the foundation for export-led economic growth in the coming years. The focus must now shift to effective implementation of the FTP through a whole-of-government approach.”
He also cautioned that, “Given the prevailing volatility in the trade landscape, the government must be ready to undertake course correction in the FTP as the situation demands, based on feedback from exporters and other trade stakeholders”
In a break from the past, the new FTP will continue to be in operation until otherwise announced. Previously, FTPs were notified for a period of five years, with amendments from time to time.
In other respects, the FTP maintains its previous structure, with different chapters regulating various aspects of imports, exports and trade-related schemes. Notably, the new FTP includes a dedicated chapter on promoting cross border trade in the digital economy.
Mehta also stated that the government should now release a vision document articulating India’s international trade strategy, which can complement the Foreign Trade Policy. The overall objective of India’s trade policy must be to fully leverage the potential of international trade to generate domestic economic growth and employment opportunities.
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