Published On : 07-Dec-2021
The Foreign Trade Policy(FTP) of India determines the strategy of the government to increase exports, generate employment and give a boost to manufacturing and trade in the nation. The policy is said to be in line with the ‘Make in India’ campaign.
On 30th April 2015, the Indian Government had released the Foreign Trade Policy for the five year period of 2015-2020. The first extension came about due to the COVID19 crisis after the FTP expired on March 31st 2020. Then, it was extended again for the first six months of the current fiscal year. Recently, Commerce and Industry Minister Piyush Goyal declared the third and the latest extension of the Foreign Trade Policy until March 31, 2022.
The FTP was instrumental in bringing about the MEIS(Merchandise Exports from India) Scheme which helped promote the manufacture and export of goods. The FTP(15-20) was also conducive to the execution of the Service Exports from India Scheme(SEIS) that aimed to improve the notified services’ export. Other benefits include Export Promotion Capital Goods(EPCG) and Duty Free Import Authorisation(DFIA).
THE NEW FOREIGN TRADE POLICY WILL ARRIVE IN THE FISCAL YEAR 2022-23
Piyush Goyal, Minister of Commerce and Industry said in a statement that since the country had not overcome the COVID19 crisis, the consultation for the new FTP is as yet ongoing. Exports during the first two quarters of this fiscal year stood at $185 Billion and the nation is well on track to achieve the $400 Billion target for the year. The Minister also said that the goal of a trillion-dollar export economy is in the government’s sights for the upcoming years. The new Foreign Trade policy is expected by April 2022.
The export community found itself torn on its opinion at the announcement. While some thought the continuation was a let-down, others were assured of the possibilities that await.
Indian exports have been growing at a steady pace in the past few years. But the COVID19 crisis hampered the progress of the entire previous decade. Further, import-export traders have also borne the worst shipping container crisis the world has seen in the recent past. The compounding effect has spelt backlogs and losses for all involved: the government, traders and the economy. A policy at this time would’ve helped usher the nation into maintaining the rise in export numbers that could’ve in turn helped in exceeding the $400 Billion exports goal for the year. Besides, the lack of a new policy will fuel trade-related uncertainties and the latest variants of the Coronavirus.
There were also voices in favour of the government’s move. Several traders said that they were more satisfied with the status quo and would not want the government rushing to bring change. Earlier this year, the RoDTEP rates were announced in August and the RoSCTL scheme was given the nod in July. These developments were cited as being a note of the government’s export-friendly intentions. Additionally, the new FTP could only provide rebates on taxes and duties and any big policy change could have confused exporters and complicated matters further.
The current Foreign Trade Policy is a robust yet slightly outdated plan that passes the muster. Although, by no means can it be called an exceptional momentum pusher to take the economy to the next level. While the government’s intentions are noble, fastidious action and manoeuvring in terms of the new FTP will put India’s foot on the pedestal of a trillion-dollar economy.
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