Govt unveils new trade policy; eyes $2 trillion exports by 2030

The government on Friday unveiled the much-awaited Foreign Trade Policy without any sunset clause and set a target to boost the country’s exports of goods services to $2 trillion by 2030 from the estimated $760 billion in 2022-23.

With the new policy, which comes into effect from April 1 2023, Prime Minister Narendra Modi’s government has broken the tradition of having foreign trade policy lasting for five years. There is no end date to the new policy. Unveiling the policy, Commerce and Industry Minister Piyush Goyal said the policy would be updated as and when necessary.

The new policy also seeks to do away with the tradition of incentives. Now it will move to a remission and entitlement-based regime.

The proposed transition from export incentive/subsidy-based regime to a remission-based regime will make India’s exports WTO compliant and help in reducing trade disputes, said Vijay Pratap Singh Chauhan, Partner, Cyril Amarchand Mangaldas.

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“The new policy would help India become a significant reciprocal trading partner for any country,” said Chauhan adding that the new policy will complement India’s efforts to enter into free trade agreements with developed countries or regions. India is negotiating FTAs with several countries and regions including the UK and European Union.

The benefits offered under foreign trade policy have been extended to e-commerce exports, which are estimated to grow to $200-300 billion by 2030.

The FTP 2023 aims at process re-engineering and automation to facilitate ease of doing business for exporters.

It also focuses on emerging areas like dual use high-end technology items under SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies).

“The policy focuses on new areas such as e-commerce and green energy, which have huge export potential,” said EEPC India Chairman Arun Kumar Garodia.

The consignment wise cap on e-commerce exports through courier has been raised from Rs 5 lakh to Rs 10 lakh.

Director General of Foreign Trade Santosh Sarangi said the new policy is based on continuity of time-tested schemes facilitating exports as well as a document which is nimble and responsive to the requirements of trade.

“We will keep changing this document and update it. If there is a sector which feels this FTP does not have anything for them, don't feel disappointed,” said Sarangi.

The policy has recommended the restructuring of the Department of Commerce to make it future ready.

Four new towns - Faridabad, Mirzapur, Moradabad, and Varanasi - have been designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns. The TEEs will have priority access to export promotion funds under the market access initiative scheme and will be able to avail common service provider benefits.