Foreign Trade Policy

Foreign Trade Policy

Subject: Economy

The Government will release a new foreign trade policy in the coming week that could include measures to help push up goods and services exports as well as rein in the runaway import bill. The current trade policy was introduced in 2015.

New initiatives expected under the new FTP:

• The foreign trade policy will have three new chapters—on e-commerce, districts as export hubs, and SCOMET (dual use items used for civilian/industrial and military use)— thereby giving special emphasis on them.
• The new chapter on SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) is aimed at bringing clarity on trade provisions for these dual-use items.
• The FTP will also aim to promote and diversify services exports beyond the US and EU markets.
• The policy will facilitate coordinated action between states and missions abroad to formulate and execute the trade promotion strategy.
• There will also be a great emphasis on developing cross-border e-commerce to boost e-commerce exports from India.
• The FTP would also likely allow extending concessions from schemes like Remission of Duties and Taxes on Exported Products (RoDTEP) and EPCG in case the transaction is settled in rupees and not only in hard currencies like the dollar or euro. This is in line with the RBI allowing rupee trade.

Highlights of The Foreign Trade Policy (FTP) 2015-20:

• FTP 2015-20 provided a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in line with the ‘Make in India’ programme.
• FTP 2015-20 introduced two new schemes, namely ‘Merchandise Exports from India Scheme (MEIS)’ for export of specified goods to specified markets and ‘Services Exports from India Scheme (SEIS)’ for increasing exports of notified services.
• Measures had been adopted to nudge procurement of capital goods from indigenous manufacturers under the EPCG scheme by reducing specific export obligation to 75 percent of the normal export obligation.
• Measures had been taken to give a boost to exports of defence and hi-tech items.
• 108 MSME clusters have been identified for focused interventions to boost exports. Accordingly, ‘NiryatBandhu Scheme’ had been galvanised and repositioned to achieve the objectives of ‘Skill India’.
• Trade facilitation and enhancing the ease of doing business were the other major focus areas in the FTP. One of the major objectives of the FTP is to move towards paperless working in a 24×7 environment.