India’s New Trade Policy to Facilitate Transition to Developed Economy, says FICCI

Subhrakant Panda stated in a statement that the Foreign Trade Policy (FTP) will be critical in achieving the government's aim of USD 2 trillion in exports (for goods & services) by 2030.

"By eliminating the sunset provision and end-period, the FTP will soothe exporters' and importers' concerns and promote stability, continuity, and assurance despite the changing geopolitical climate," Panda said of the new policy, which has no fixed date.

New components in international trade strategy, particularly E-commerce, Internationalization of the Indian Rupee, District Exports Hub, and Merchanting Trade Reform, are appreciated. The Indian government launched its new Foreign Trade Policy (FTP) 2023 on Friday, aiming to increase the country's exports to USD 2 trillion by 2030 and focusing on international trade settlement in rupees.

The previous Foreign Trade Strategy 2015-20, which was supposed to expire in March 2020 owing to the Covid-19 pandemic and volatile geopolitical scenario, was prolonged and was set to expire on Friday. Last year, the RBI implemented a new mechanism for invoicing, payment, and settlement of exports/imports in Indian currency.

In the long run, this method will aid in the internationalization of the Indian rupee.  A currency is considered "international" if it is generally accepted as a means of trade over the world. According to the government, the Foreign Trade Policy 2023 aims to provide policy continuity and a responsive framework.

However, India's overall exports have already surpassed USD 750 billion and are expected to surpass USD 760 billion by today, making it the country's largest ever. This is a year-on-year growth of more than 13%. According to data, India's exports have increased by almost 75% in the last six to seven years, compared to a global increase of 28%.

Engineering and agricultural exports increased by 81% and 61%, respectively, over the time. Pharmaceuticals and electronics both increased by 45% and 163%, respectively. Data showed that marine products and toys increased by 63% and 89%, respectively.

In addition, the dairy industry will be excluded from maintaining Average Export Requirements. It intends to assist the dairy industry in upgrading technologies. To accomplish the trillion-dollar merchandise export objective by 2030, the government will create sector-specific benchmarks. In addition, the government will reform the Department of Commerce to make it more future-ready.