Foreign Trade Policy Extended

Foreign Trade Policy UPSC: Relevance

• GS 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Foreign Trade Policy : Context

• Recently, the Ministry of Commerce and Industry has further extended the existing Foreign Trade Policy (FTP) till September 30, 2022.
• Read about record export growth from India.

Foreign Trade Policy 2015: Key points

• On March 2020, the government had extended the Foreign Trade Policy 2015-20 for one year till March 2021, amid the coronavirus outbreak and the lockdown.
• The FTP 2015-2020, which came into force on 1 April 2015, was originally meant for 5 years.

विदेश व्यापार नीति विस्तारित

What is Foreign Trade Policy?

• Foreign Trade Policy is a set of guidelines and instructions established by the DGFT (Director General of Foreign Trade) in matters related to the import and export of goods in India.
• The foreign trade policy is regulated by foreign trade (development and regulation), Act 1992.
• Focus area: FTP primarily focuses on adopting a twin strategy of promoting traditional and sunrise sectors of exports including services.

Objectives of foreign trade policy

• To boost the economy by facilitating international trade of India.
• To improve the balance of payment and trade of India.
• To enhance the trading activities and generate a workforce environment to increase employment in the country.
• To provide consumers with goods and services of utmost quality and with effective cost.
• To raise the infrastructure of small-scale industries to reduce the trade imbalance in the country.
• To establish an advance licensing system to allow duty-free imports.
• To remove the restrictions on goods and services, and allow them to be freely imported.
• Digitalization of all the documents to reduce conflict between exporters and DGFT.
• Ease of access to credits by the start-ups and increasing limits.
• Canalization of import goods to diversifying market opportunities.

Features of FTP 2015-20

• It introduced a new scheme, “Merchandise Exports from Indian Scheme (MEIS)” and “Services exports from India scheme (SEIS)”.

• Merchandise exports from India (MEIS) to promote specific services for specific FTP.

• The ‘Services Exports from India Scheme’ (SEIS) is for increasing exports of notified services.
• The MEIS scheme provides rewards to exporters to offset infrastructural inefficiencies and associated costs.

• Reduced export obligation to 75% under the EPCG (Export Promotion Capital Goods) scheme.
• Duty credit scrips are freely transferable and usable for payment of customs duty, excise duty and service tax.

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