New Foreign Trade Policy 2023: Boosting Competitiveness and Promoting Export Growth in India

In OptiExim by admin


The new Foreign Trade Policy (FTP) for India was introduced by the Ministry of Commerce and Industry, Government of India. The policy was formulated after extensive consultations with various stakeholders and aims to promote exports, enhance the country’s trade competitiveness, and provide support to businesses and industries in India.

Some of the key highlights of the new FTP include:

No Duration for the FTP: The new FTP is not linked to any specific duration or due date. This means that any changes or modifications to the policy can be made dynamically, based on emerging situations and the needs of the country.

Tax Remission Schemes: The government aims to encourage tax remission schemes instead of duty exemption schemes. This is a significant change as tax remission schemes provide better clarity and predictability for exporters, reducing the scope for disputes and litigations.

Trade Facilitation through Technology: The government aims to promote greater trade facilitation using technology, automation, and continuous process re-engineering. This will make the export-import process faster, more efficient, and transparent.

Focus on E-Commerce Exports: The new FTP puts a strong emphasis on e-commerce exports, recognizing the growing importance of this sector in India’s foreign trade. The government aims to provide better incentives and support to e-commerce exporters.

Online Approvals of Authorizations: The new FTP provides for online approvals of authorizations, using a rule-based system. This means that approvals will be granted on the same day without any physical interference, reducing delays and improving efficiency.

Reduction in Fees for MSMEs: The new FTP aims to reduce fees for MSMEs under Advance and EPCG schemes. This is a welcome move, as MSMEs are the backbone of India’s export sector and often face significant financial constraints.

E-Certificate of Origin: The new FTP provides for a new revamped module for e-Certificate of Origin. This will make it easier for exporters to obtain certificates of origin, reducing paperwork and delays.

Paperless Filing for License Redemption: The new FTP provides for a paperless filing system for the license redemption process. This will make the process faster, more efficient, and environmentally friendly.

Rupee Payment to be accepted: The new FTP allows for the acceptance of rupee payments under FTP schemes. This will provide greater flexibility to exporters and reduce foreign exchange risk.

FTP Benefits for E-Commerce Exporters: The new FTP extends all FTP benefits to e-commerce exporters. This includes benefits such as Duty-Free Import Authorization, Advance Authorization, and Export Promotion Capital Goods Scheme.

Amnesty Scheme for Default in Export Obligations: The new FTP provides for a special one-time amnesty scheme for default in export obligations. This is a welcome move, as it will provide relief to exporters who are struggling to meet their export obligations due to unforeseen circumstances.

The DGFT has initiated IT initiatives based on API (Application Programming Interface) message exchange with third parties. In the current phase, they have started exchanging communications with other inter-governmental departments via the API route. Additionally, they are exchanging messages with community partners such as CBIC (Central Board of Indirect Taxes and Customs), CBDT (Central Board of Direct Taxes), MCA (Ministry of Corporate Affairs), and banks.

Message Exchange with Community partners
An effective message exchange system is in place with various community partners. The API message exchange system with CBIC is used for various purposes, including the exchange of Importer Exporter Code numbers, authorizations, and scrips (such as DFIA, AA, EPCG), shipping bills, and bills of entry. The API message exchange with CBDT is used for PAN-related services, while the API message exchange with MCA is used for company-related information.

The DGFT is also exchanging messages with banks, PFMS (Public Financial Management System), and Bharat Kosh. However, external APIs are still awaited for integration with the DGFT portal.

The DGFT is making efforts to improve communication and data exchange with various government departments and community partners, which will help streamline the foreign trade process and make it more efficient. The use of APIs for message exchange is a step in the right direction towards achieving this goal.

Overall, the new FTP is aimed at promoting greater ease of doing business for exporters, improving the efficiency of the export-import process, and providing better support to MSMEs and e-commerce exporters.

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