Foreign Trade Policy 2023

Foreign Trade Policy (FTP) 2023 announced

Context: Ministry of Commerce and Industry launched the Foreign Trade Policy 2023, which will come into effect from April 1, 2023.

•  FTP 2023 sets a $2 trillion target for exports of goods and services by 2030 with a shift from incentives to remission and entitlement-based regime.

What is an FTP?

• A trade policy is a government policy that affects the number of goods and services a country exports and imports.
• Export Promotion
  • Increases revenue through exports and stimulates economic growth
  • Encourages exports and attracts foreign investment
• Collaboration with States and Districts
  • Facilitates export promotion at the regional level
• Economic growth
  • Reduces transaction costs and simplifies export processes
  • It facilitates the flow of the economy in a country and increases foreign exchange in a country.
• For domestic consumer
  • It aids in facilitating free trade and liberalization and improving the overall market for domestic consumers of a country.

Significance of FTP:

• Aim of FTP 2023:
  • To enhance the competitiveness of Indian exports in the global market (India’s overall exports are about to reach US $760 billion this year)
  • Promote sustainable development of the country’s trade sector
  • Make India a leader in specific sectors such as pharmaceuticals, engineering goods, and textiles
  • To promote a digital economy and leverage technology to enhance the competitiveness of Indian exports.

The Key Approach to the policy is based on these 4 pillars:

• An incentive to Remission (Reduction/cancellation of a debt, duty, or penalty)
• 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

Mains Practice Question

The Internationalisation of the Rupee is a goal of India’s Foreign Trade Policy 2023. Explain the actions taken by the government and the RBI in this regard. Also, make suggestions for potential ways to increase the Indian Rupee’s adoption around the world.

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