India has always been known as a land of diverse cultures and traditions. The Indian economy has also become a global powerhouse in recent years. In recent years, India’s foreign trade policy has been undergoing a transformation to boost exports and strengthen its position in the global market. The new Foreign Trade Policy 2023 is expected to be a game changer for Indian businesses by providing them with more opportunities to expand their reach globally. Let’s dive into how this policy can help India achieve its goal of becoming a $5 trillion economy by 2024!
Introduction to India’s New Foreign Trade Policy of 2023
India’s new Foreign Trade Policy (FTP) of 2023 is for boosting exports and economic growth. The policy aims to double India’s exports to $1 trillion by 2025 and make the country a leading player in global trade.
A number of key features of the FTP of 2023 will assist in achieving these objectives. Firstly, it provides for a more liberal and open trade regime with greater emphasis on market access and export promotion. Secondly, it simplifies procedures and reduces transaction costs to improve the ease of doing business. Thirdly, it promotes the use of technology and digitalization to enhance competitiveness. It creates a conducive environment for investments in areas such as manufacturing, infrastructure, and research & development.
With these measures, the FTP of 2023 is expected to give a big boost to India’s exports and economic growth. It is a welcome step forward for global trade.
Overview of the Key Features of the Policy
- The new Foreign Trade Policy (FTP) of India for the period 2020-2025 is a game changer that seeks to boost exports and economic growth.
- The key features of the FTP are
a) A significant increase in the export target to USD 1 trillion by 2025;
b) Export potential in 12 key sectors;
c) A new scheme to incentivize exports through input tax refunds;
d) A liberalized policy regime for the import of critical raw materials, inputs, and intermediate goods;
e) A simplified and unified procedure for issuing export licenses; and
f) setting up an Export Facilitation Council (EFC) to resolve issues faced by exporters.
- The FTP is a welcome move by the government and will go a long way in promoting exports from India and achieving economic growth.
Impact on Exports and Economic Growth
Over the past few years, India’s economy has been growing at a healthy pace. Domestic consumption, rather than exports, has largely driven this growth. In order to sustain this growth and make it more inclusive, the government has devised a new Foreign Trade Policy (FTP) with the objective of boosting exports and economic growth.
The FTP aims to increase India’s export share in global trade from 2% to 3.5% by 2025. India aims to double its exports in the next five years. In order to achieve these goals, the FTP provides a number of incentives for exporters, including financial support, easier access to markets, and preferential treatment in government procurement.
Exports and economic growth are expected to benefit from the FTP. Exports are expected to grow at a faster pace, while the overall economy is likely to benefit from the increased demand for goods and services. The FTP is thus a game changer for boosting exports and economic growth in India.
Benefits for Indian Businesses
India’s new Foreign Trade Policy (FTP) is a game changer for boosting exports and economic growth. The FTP, which came into effect on April 1, 2015, significantly liberalizes and eases India’s trade regime. It contains a number of reform measures that are expected to lead to an increase in exports and foreign investment and contribute to economic growth.
The main benefits for Indian businesses under the FTP are:
- Increased access to global markets: The FTP provides for enhanced market access through improved tariff rates, preferential treatment in the form of duty-free or reduced tariffs, and better market access through free trade agreements (FTAs).
- Improved export competitiveness: The FTP seeks to improve the competitiveness of Indian products in international markets through a number of initiatives, including the introduction of a new Export Incentive Scheme known as MEIS (Merchandise Exports from India Scheme). Under this scheme, exporters will be eligible for duty-free or preferential duty credits that can be used to offset import duties on inputs used in the manufacture of exported goods. Exporters will be able to reduce their production costs and become more competitive internationally as a result.
- Greater clarity and predictability: The FTP provides greater clarity and predictability with respect to India’s trade policy regime by laying down clear rules and procedures governing various aspects of trade such as customs, licensing, standards, etc. This is expected to help businesses plan their operations better.
India’s new Foreign Trade Policy of 2023 is a game-changer that promises to boost exports, create jobs and lead to economic growth. Through the policy, India has made it clear that it is committed to creating an open economy with increased trade opportunities for both domestic and foreign players. With its focus on ease of doing business, simplifying procedures and enhanced incentives, this policy will bring in more global investments in the country which will aid India’s growth story. As a result of all of these factors combined, India is expected to become the world’s biggest attractive investment destination.