Why In News
- The government has further extended the existing Foreign Trade Policy (FTP) till 30 September this year, according to a commerce ministry notification.
- The development comes amid disruptions in global trade due to prolong tension between Russia and Ukraine.
About The Foreign Trade Policy
- The FTP is an elaborate policy guideline and a strategy to promote export of goods and services.
- The existing policy came into force on April 1, 2015, and was valid for five years.
- A new FTP was already deferred and the existing policy was extended till March 31, 2021, as businesses were grappling with the disruption caused by the Covid-19.
Amendment in Foreign trade policy -2015-20
- Over the last few years, the government has phased out several incentive-driven schemes for exporters.
- For instance, merchandise exports from India scheme (MEIS) was phased out for compliance with World Trade Organization (WTO) .
- Thereafter, a WTO-compliant export boosting scheme was already notified and rolled out last year, even before the announcement of a fresh road map for trade.
- Currently, exporters get support from schemes such as interest equalisation scheme, transport subsidy scheme, Rebate of State and Central Taxes and Levies (RoSCTL) and Remission of Duties and Taxes on Export Products (RoDTEP).
Potential benefits of the delay in the new policy
- Delay could allow for the strengthening of the existing policy through the addition of a few essential components:
- The export product portfolio could be made more diverse and competitive by recognizing products with the GI tag.
- The progress made on the digitization front could further be expanded to recognize the potential of e-commerce in cross-border trade.
- Centralization and digitization of trade facilitation processes.
- The ‘District as a Hub’ initiative can aid small businesses in enhancing their export potential.
- Trade being important pillar in the goal for making India $ 5 trillion economy, needs proper promotion and policy support. The present disruption in the global economy owing to Covid -19 impact and Russia -Ukraine necessitated the delay in the policy formulation.