Inclusive Aspects of Foreign Trade Policy 2023

1. Incentive to Remission:

• The policy shifts from direct incentives to a remission-based approach, ensuring that exporters are reimbursed for duties and taxes paid on inputs, making their products more competitive globally.
• This shift encourages businesses to adopt a sustainable export model, reducing reliance on direct subsidies.

2. Export Promotion Through Collaboration:

• The FTP 2023 emphasises partnerships between exporters, States, Districts, and Indian Missions to expand India’s reach in global markets.
• By fostering collaboration at every level, the policy aims to transform districts into export hubs, unlocking potential in previously untapped regions.

3. Ease of Doing Business:

• To minimise bottlenecks, the policy focuses on process re-engineering and automation, reducing the transaction costs for exporters.
• Initiatives like online systems for export documentation and streamlined customs processes make it easier for businesses to manage their import and export operations.

4. Emerging Areas: E-Commerce and SCOMET:

• With a growing emphasis on e-commerce exports, the policy supports digital entrepreneurs by providing a framework for online trade.
• It also addresses the export of dual-use high-end technology items under the SCOMET policy, ensuring India remains a leader in traditional and emerging trade sectors.

Also Read: Unpacking India's Foreign Trade Policy 2024: Impact and Opportunities

1. Technology-Driven Facilitation: 

The new policy emphasises a shift from direct incentives to a system that leverages automated IT systems and risk management frameworks for approvals. This shift enables a more facilitating environment for exporters, encouraging a technology-first mindset.

2. Continued Success of Key Schemes: 

Building on the effectiveness of schemes like Advance Authorisation and Export Promotion Capital Goods (EPCG) under the FTP 2015-20, these initiatives will continue but with significant upgrades. Expect a paperless, online environment, making it simpler to access export benefits.

3. Rule-Based IT Systems: 

The duty exemption schemes will now be managed through regional offices using a rule-based IT system, reducing the need for physical paperwork. Over FY23-24, processes for issuing, re-validating, and extending these authorisations will be automated, offering faster turnaround times for exporters.

4. Focus on MSMEs: 

With reduced fee structures and IT-based schemes, Micro, Small, and Medium Enterprises (MSMEs) will find it easier to access benefits, positioning them for global growth.

Also Read: Import and Export Services: Basic guidelines and Procedures

1. Priority Access to Funds: 

Under the Market Access Initiative (MAI) scheme, these towns will have priority access to export promotion funds, giving local businesses the resources they need to expand.

2. Common Service Provider (CSP) Benefits: 

TEEs can avail of CSP benefits under the EPCG Scheme, making accessing shared infrastructure for export activities easier. This is particularly beneficial for regions known for handlooms, handicrafts, and carpets, allowing them to compete more effectively in the global market.

1. Status Holder Scheme: 

Exporters with a track record of high performance will be granted status recognition, making them partners in capacity-building efforts. 

Think of it as an “each one teach one” initiative—2-star and above status holders are encouraged to train new exporters, building a talent pool that supports India’s goal of a $5 trillion economy by 2030.

2. Easier Status Recognition: 

The policy has recalibrated the norms, making it easier for firms to achieve 4-star and 5-star status. This recognition brings branding opportunities and opens doors to additional benefits.

Also Read: Functional Import and Export Solutions

1. State and District Collaboration: 

The policy fosters partnerships with State governments to identify export-worthy products and resolve challenges at the local level. This collaboration is facilitated through State and District Export Promotion Committees.

2. District-Specific Action Plans: 

Each district will have a tailored export action plan to promote local products and services. This means every district can contribute to boosting India's global trade footprint.

Why it Matters: 

A well-regulated export control regime gives Indian exporters access to high-end, dual-use technologies while ensuring compliance with global norms. This means businesses can safely export-controlled items, tapping into lucrative international markets without risking non-compliance.

Wider Outreach: 

FTP 2023 promotes greater awareness of SCOMET among exporters, ensuring they understand this segment's complexities and opportunities. This outreach helps businesses adapt quickly and meet international standards.

Also Read: Understanding the Latest Changes in India's Foreign Trade Policy

1. Policy Interventions: 

The policy sets the stage for e-commerce hubs, focusing on elements like payment reconciliation, bookkeeping, and export entitlements to simplify the process for digital exporters.

2. Increased Export Limits: 

The consignment cap for e-commerce exports has been raised from ₹5 lakh to ₹10 lakh, providing more flexibility for exporters to ship higher-value goods. This limit may be adjusted depending on feedback, offering even more growth potential.

3. Integration with ICEGATE: 

Including courier and postal exports into ICEGATE enables exporters to claim benefits under the Foreign Trade Policy. This move simplifies accessing export incentives, making it easier for new EXIM entrepreneurs and digital-first businesses.

4. Building Capacity: 

The government aims to onboard artisans, weavers, garment manufacturers, and gems and jewellery designers onto e-commerce platforms, enhancing their global reach through training and capacity-building initiatives.

1. Expanded Eligibility: 

The PM MITRA (Prime Minister Mega Integrated Textile Region and Apparel Parks) scheme is now eligible for benefits under the EPCG Scheme, allowing textile manufacturers to easily upgrade their facilities.

2. Support for the Dairy Sector: 

To boost the dairy industry, the sector is now exempt from maintaining an average export obligation, allowing it to upgrade technology without the burden of export requirements.

3. Green Technology Focus: 

New items like Battery Electric Vehicles (BEV), Vertical Farming Equipment, Wastewater Treatment Systems, and Green Hydrogen products are eligible for reduced export obligation requirements. This move supports India’s goal of sustainable growth.

Also Read: Influential Factors Affecting International Trade Flows

1. Special Advance Authorization: 

This has been extended to the apparel and clothing sector, allowing quicker execution of export orders on a self-declaration basis.

2. Self-Ratification Scheme: 

Benefits of the Self-Ratification Scheme for fixing Input-Output norms are extended to 2-star status holders and above, alongside Authorized Economic Operators (AEOs), allowing for faster processing of export claims.

1. Expanding Scope: 

Indian intermediaries can now facilitate goods trade between two foreign countries without the goods ever touching Indian ports. This provision includes restricted and prohibited items, subject to RBI guidelines.

2. GIFT City as a Merchanting Hub: 

The vision is to transform locations like GIFT City into merchanting trade hubs similar to Dubai, Singapore, and Hong Kong. This could make India a key player in global trade without traditional constraints.

Also Read: Affordable Export Documentation Services for All Trade Needs

1. Resolving Old Cases: 

Exporters with pending EO defaults can settle their cases by paying the exempted customs duties in proportion to the unmet obligation. The interest payable is capped at 100% of these duties, offering substantial relief.

2. No Interest on Additional Duties: 

Exporters are not required to pay interest on Additional Customs Duty and Special Additional Duty, further reducing their burden.

Why It Matters: 

This scheme offers exporters a second chance to start fresh, encouraging compliance while allowing them to focus on new opportunities in global trade.

1. Digital Management & Automation:

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• Track shipments in real-time across 110+ countries, cutting down turnaround time (TAT) by 50%.
• Centralise communication with Pazago’s Inbox for smooth coordination and reduced paperwork.

2. Streamlined Customs Clearance:

• Simplify customs clearance with digital processes for schemes like Advance Authorization and EPCG.

3. Efficient Payment Solutions:

• Get priority clearance and low forex rates through Pazago’s partnership with JPMC.
• Receive international payments within 3 hours and remove the $10,000 cap, ensuring smooth cash flow.
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4. Proactive Risk Management:

• Identify risks and bottlenecks like supplier delays with automated alerts.
• Plan inventory effectively with instant updates, ensuring smooth operations.
• It helps exporters manage logistical issues before they affect the bottom line.

5. Cost-Effective Logistics & Shipping:

• Track cargo across 180+ shipping companies in real-time.
• Simplify logistics for Ocean Shipping and in-land transportation with trusted carrier partnerships.
• Plan inventory with real-time delay alerts, ensuring timely deliveries.
• Save up to 20% on costs with optimised cross-border logistics.

6. Document Management & Collaboration:

• Easily create, manage, and collaborate on key trade documents like quotations and certificates of origin.
• Streamline document approvals and reviews, reducing the time to finalise crucial paperwork.
• Keep documents secure in structured folders for quick retrieval.

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