India’s Foreign Trade Policy (FTP) has evolved significantly since its inception as 5-year Exim policies in 1992 after the famous LPG (Liberalization, Privatization and Globalization) reforms. The 3rd Exim policy of 2002-07 was stopped in between on the election of then Prime Minister Dr Manmohan Singh who replaced it with a Foreign Trade Policy (FTP). All these policies revolve around the issues of free trade and export promotion.
The previous Indian FTP was planned from 2015-20 and it was due for a change on 1st April, 2020. Given a global slowdown and a halt in international trade due to COVID-19 pandemic in 2020 and geopolitical tensions like the Russia-Ukraine war in 2022, this policy was extended till 2023. During this policy, India’s total exports (merchandise + services) rose at a CAGR of 9.1% from US$ 416.6 billion in 2015-16 to US$ 770.2 billion in 2022-23.
The latest Indian FTP was launched on 31st March, 2023 to re-enable the idea of “local goes global”. India’s overall exports hit a record US$ 776.7bn in FY24 and with the new FTP, the GOI aims to get this figure to US$2 trillion (merchandise + services) by 2030.
This FTP revolves around four major pillars:
(i) Incentive to Remission
(ii) Export Promotion through Collaboration
(iii) Ease of Doing Business
(iv) Focus on Emerging Areas.
In contrast to the last Indian Foreign Trade Policy, there is a Shift in Focus from Market Exploration to Ease of Doing Business. The New Policy places emphasis on streamlining processes and reducing government intervention to facilitate smoother exports. It does not have a limited time frame, the Government of India (GOI) has decided to take constant feedback from the stakeholders to adapt the policy as per the evolving situation. It also places an emphasis on “Internationalization of Rupee” and increasingly use the Indian rupee in cross-border transactions, including trade, investment, and financial institutions.
Related articles :
1. India Trade Review 2023: Preparing for the long haul?
2. Trade policy vision & strategy in a dynamic global landscape
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