Commerce Ministry Plans to Release a New Foreign Trade Policy Before September

According to an official, the commerce ministry is working to release the new five-year foreign trade policy (FTP) by September this year, and the Districts as Export Hubs scheme would be included in that document, which aims to promote exports and job creation.

The directorate general of foreign trade (DGFT), the commerce ministry's arm in charge of policy formulation, will soon send the proposal to the finance ministry in order to seek funding for the scheme. According to the official, the scheme's initial goal is to focus on 50 districts that have scalable products with high export potential.

The DGFT would select these districts using a "challenge route," according to the official, who added that states and districts that want to take advantage of the financial incentives under the scheme should compete for that. There are 750 districts in the country.

"It will be a competition between states and districts. We will issue detailed guidelines in this regard. The scheme will be added to the FTP. It will be a centrally sponsored scheme, with the Centre bearing 60% of the total cost and the states bearing the remainder. We hope to have the new FTP available by September "the official continued.

According to a commerce ministry document, states must actively participate in export promotion activities because exports cannot be exponentially increased without their active participation. The Districts as Export Hubs scheme aims to promote exports, manufacturing, and job creation at the local level.

The current foreign trade policy (2015-20) will be in effect until September 2022. Due to the Covid-19 outbreak and lockdown, the government extended this policy for one year until March 31, 2021 on March 31, 2020. This year, it was extended until September. The government announces support measures for both goods and services exporters in the policy.

In 2021-22, merchandise exports reached $420 billion, while service exports totaled $254.4 billion. By 2030, the government expects to export $1 trillion in goods and services.

India is aggressively negotiating free trade agreements with several countries and regions, including Canada, the United Kingdom, the European Union, and Israel, in order to boost outbound shipments. In May, India implemented a trade agreement with the UAE and signed one with Australia.