Case Studies

Highlights of the Foreign Trade Policy 2023

On March 31st, 2023, the Ministry of Commerce announced the new Foreign Trade Policy 2023 (FTP), effective on April 1st, 2023. The new FTP is intended to increase trade, support manufacturing, encourage exports, promote ease of doing business, and establishing the Indian Rupee as a global currency thereby accelerating India’s emergence as the centre of the world’s trade.

In contrast to the previous custom of introducing a 5-year FTP, this new policy has no end date and will be updated in order to ‘accommodate the emerging needs of the time’. The latest policy shift prioritizes tax remissions over incentives, reduces certain expenses for MSME companies, and guarantees faster clearance times. Additionally, the policy features a one-time amnesty program for export obligation noncompliance. Here are some of the policy's notable highlights:

  • Technical Aspects: Introduces automatic approvals for various permissions to simplify procedures and decrease bureaucratic hurdles for businesses. The revalidation process for various authorizations, which currently takes between three days to a month, is anticipated to be reduced to one day.
  • Export Promotion through collaboration - Exporters, States, Districts & Indian Missions: Aims to establish partnerships with state governments and advance the 'Districts as Export Hubs' initiative to foster exports at the district level and expedite the development of the grassroots trade ecosystem.
  • Rupee Payment under FTP Schemes: Emphasizes the promotion of the Indian Rupee's usage in international trade, which can mitigate exchange rate risks and bolster trade with countries encountering currency restrictions.
  • Streamlining SCOMET Policy: Emphasizes on the ‘export control’ regime and introduces a robust export control system in India that would provide access to dual use-high end goods to exporters while facilitating exports of SCOMET items from India.
  • Reduced export license fee for MSME’s: Lowered application fees for MSMEs that will provide financial relief and encourage more small businesses to participate in global trade.
  • One-Time Amnesty Scheme: An amnesty scheme for one-time settlement of default in export obligation by Advance Authorization and EPCG authorization holders has been introduced. The scheme is available for a limited period, i.e. up to 30th September, 2023.