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Foreign Trade Policy (FTP)
A five-year period was given to the present trade policy when it was launched in 2015.The Foreign Trade Policy 2015–20 was extended by the government to 2022–2023 during the COVID–19 epidemic. The new policy will be a thorough and significant document that defines laws, norms, and practices in international trade transactions, which are essential in facilitating export-import operations and boosting the competitiveness of the export sector. India's objective is to profit from a globe that wants to be less reliant on China and to give exporters (and importers) the ability to plan ahead with their investments.
What is Foreign Trade Policy?
It can be conceptualized as −
Foreign Trade Policy (FTP) is a set of regulations for importing and exporting products and services.
These are created by the Directorate General of Foreign Trade (DGFT), which is in charge of promoting and facilitating exports and imports under the Ministry of Commerce and Industry.
The Foreign Trade Development and Regulation Act of 1992 provides for the enforcement of FTPs.
What is Foreign Trade Policy in India?
These are −
The Foreign Trade Policy (2015–20) was introduced on April 1 in accordance with the "Make in India," "Digital India," "Skill India," "Startup India," and "Ease of Doing Business" objectives.
It offers a framework for boosting the nation's value addition, employment creation, and exports of goods and services.
The FTP statement details the market and product strategy in addition to the actions required to advance trade, increase infrastructure, and enhance the complete trade ecosystem.
It aspires to make trade a significant contributor to the nation's economic growth and development, while also assisting India in responding to external issues and staying ahead of the rapidly evolving global trading infrastructure.
Objectives of Foreign Trade Policy
Following are some objectives of Foreign Trade Policy −
India's foreign trade policy increases exports, which in turn help to improve the country's balance of payments and raise a nation's revenue.
It encourages economic expansion and national development.
Utilize the potential of the global market by stepping up economic activity.
To encourage long-term economic growth, make raw materials, components, intermediates (goods used as ingredients in the production of other goods), consumables, and capital goods accessible.
India's services, industry, and agriculture all need to be improved. To create jobs, exhort stakeholders to strive toward global quality standards.
Offer consumers items of a high standard at reasonable prices.
Significance of Foreign Trade Policy
There are some specific significances of Foreign Trade Policy −
Boost trade facilitation initiatives.
Offer a simplified system for duty exemptions.
Re-launch the service export promotion program.
Boost India's contribution to international service exports.
Increase domestic production.
Increase India's global influence through its economy.
Increase export revenue by utilizing India's potential in the services sector.
Latest Updates on Foreign Trade Policy
These are −
The administration had already extended the Foreign Trade Policy (FTP) 2015–20 until March 31, 2022, in light of the COVID–19 scenarios.
India planned to put its international trade policy into effect in 2022. The policy will serve as the overarching trade philosophy for the ensuing five years.
The task of creating policy will be substantially more challenging in light of international pressure, COVID-19, and the objective of an independent India.
Limitations of Foreign Trade Policy
Among them were tax incentives offered through the well-known Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) programs. The panel determined that India is no longer permitted to give subsidies based on export performance because its per capita gross national product surpasses $1,000 per year. This discussion confirms India's growing conviction that it must abandon subsidies and look for new ways to support its exporters.
A WTO dispute settlement panel determined in 2019 that India's export subsidy schemes are unlawful and must be discontinued in response to Washington's protest.
There is a strong belief in India that free trade agreements (FTAs) have not helped the nation, which is reinforced by its trade policy.
As a result, India's present foreign trade policy seeks to both pursue new markets and products while also increasing its market share in already existing ones. India's Foreign Trade Policy also aims to support exporters in making the most of the GST, closely monitor export performance, facilitate cross-border trade, increase revenue from agriculture-based exports, and promote exports from MSMEs and labor-intensive businesses.
Q1. Who regulates India's Foreign Trade Policy?
Ans. Export commerce is governed by the Directorate General of Foreign Commerce (DGFT) and its regional offices, which are a part of the Ministry of Commerce and Industry, Department of Commerce, Government of India.
Q2. What is India's Foreign Trade Policy?
Ans. A system of rules and directives known as the Foreign Trade Policy regulates the import and export of goods in India. The Export-Import Policy is published by the Ministry of Commerce and Industry of the Indian government every five years.
Q3. What is foreign trade with example?
Ans. International trade is the term for cross-border economic activity. Consumer products like televisions and apparel, capital goods like machinery, raw materials, and food are some of the things that are frequently traded.
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