NEW AMENDMENTS TO INDIA’S FOREIGN TRADE POLICY (FTP)

GS3 – ECONOMICS

The Directorate General of Foreign Trade (DGFT) has amended the Foreign Trade Policy (FTP) 2023 to strengthen stakeholder engagement and improve the Ease of Doing Business (EoDB). These changes aim to make trade policy formulation more inclusive and adaptive, reflecting the government’s long-term vision for sustainable trade growth.

Key Amendments

1. Stakeholder Consultation Requirement

• New Additions:
  • Para 1.07A & 1.07B have been introduced, mandating consultations with stakeholders—importers, exporters, and industry experts—before any policy amendments.
• Objective:
  • To incorporate diverse perspectives from those directly affected by trade policies.
  • To create an inclusive decision-making process that ensures policies are responsive to real-world trade challenges.

2. Mechanism for Feedback

• Transparency:
  • A formal mechanism to inform stakeholders about the acceptance or rejection of their feedback.
  • Designed to build trust and encourage active participation.
• Constructive Handling of Differences:
  • The government commits to addressing differing views to arrive at balanced and effective policies.

3. Right to Suo Moto Decisions

• While prioritizing stakeholder engagement, the government retains the right to take suo moto decisions in exceptional situations.
• Purpose:
  • Ensures swift policy responses during emergencies or critical trade issues.

Objectives of FTP 2023

Four Key Pillars

1. Incentive to Remission: Transition from incentives to remission-based schemes for exporters.
2. Export Promotion Through Collaboration: Strengthening public-private partnerships to boost exports.
3. Ease of Doing Business: Simplifying processes and reducing compliance burdens.
4. Emerging Areas: Focus on growing sectors like e-commerce and new-age technologies.

Long-term Export Growth Goals

• Target: Achieve $2 trillion in exports by 2030 (goods and services combined).
• Growth Rates Required:
  • Goods: 10.86% per annum
  • Services: 17.15% per annum
• Annual Export Growth Target: 13.23% per annum

Significance of the Amendments

1.Promoting Adaptability and Responsiveness

• The integrated feedback mechanism ensures policies evolve in response to market trends and global trade dynamics.
• Shifts from the traditional fixed five-year policy cycle to a continuous and adaptive framework.

2.Empowering Exporters as Development Partners

• Acknowledges exporters as key stakeholders in driving India’s trade growth.
• Encourages collaboration to address challenges and seize emerging opportunities in global markets.

These amendments to FTP 2023 underline India’s commitment to a transparent, inclusive, and dynamic trade policy. By fostering stakeholder engagement and enabling swift decision-making, the government aims to position India as a global trade powerhouse. Achieving the ambitious $2 trillion export target by 2030 will require continued focus on innovation, collaboration, and adaptability.