Foreign Trade Policy Regulations and Procedures
The Foreign Trade Policy 2023 aims to boost India's exports through streamlined digital and collaborative trade practices. Understand the Foreign Trade Policy regulations and procedures here.
Rahul Jaiswal28 Aug, 2024
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The Foreign Trade Policy (FTP) of India is a comprehensive framework designed to promote and facilitate the country's foreign trade. The FTP 2023, launched by the Union Minister of Commerce and Industry, Shri Piyush Goyal, is a dynamic, open-ended policy aimed at enhancing India's export potential and integrating it more deeply into the global economy.
With a target of achieving $2 trillion in exports by 2030, the policy lays down specific regulations and procedures that exporters and importers must follow. This blog explores the key aspects of this policy, focusing on its legal framework, trade facilitation measures, and the procedures outlined for effective foreign trade management.The Objective of Foreign Trade Policy
The foreign trade policy was introduced to fulfil the following goals:- Establish a stable policy framework for the merchandise and services trade.
- Formulate clear rules and procedures for imports and exports.
- Support initiatives like Make in India, Digital India, and Skill India.
- Launch an export promotion mission for India.
- Foster diversification of India’s export portfolio.
- Develop a robust architecture for India's global trade engagement.
Legal Framework Under Foreign Trade Policy 2023
The FTP 2023 is anchored in the provisions of the Foreign Trade (Development & Regulation) Act and the associated rules and orders. The Director General of Foreign Trade (DGFT) plays a pivotal role in notifying exporters and importers of the procedures they must adhere to. These procedures are primarily encapsulated in the Handbook of Procedures, Appendices & Aayat Niryat Forms, and Standard Input Output Norms (SION). These regularly updated documents form the backbone of the regulatory environment for foreign trade in India. The primary objective of the FTP is to implement these provisions through simple, transparent, and digitally compatible procedures. This ensures that the processes are user-friendly and easy to comply with, thereby facilitating the efficient management of foreign trade activities.Role of E-Governance in Foreign Trade Policy
One of the standout features of the FTP 2023 is its emphasis on e-governance. The DGFT has introduced several IT initiatives to streamline trade processes and reduce reliance on paper-based documentation. Key initiatives include:- DGFT Online Customer Portal : This portal gives exporters a 360-degree view of their export-related applications. It is a centralized platform where they can manage their profiles, update information, and track the status of their applications.
- Automated Processing in an Online Environment : The policy introduces rule-based, system-driven workflows for the automated processing of various applications. This reduces manual intervention and ensures a risk-based management approach.
- Onboarding of CA/CS/Cost Accountant : To further facilitate paperless processing, professionals such as Chartered Accountants and Company Secretaries have developed an electronic procedure for uploading digitally signed documents. This integration ensures that all necessary documents are linked to the online applications under various FTP schemes.
- 24x7 Helpdesk Facility : A dedicated helpdesk has been established to support exporters, offering round-the-clock assistance. Exporters can raise service requests, call toll-free helplines, or send emails for any issues they encounter while navigating the DGFT portal or understanding the FTP provisions.
Key Provisions of the FTP 2023
The Foreign Trade Policy 2023 is built on four central pillars: incentive to remission, export promotion through collaboration, ease of doing business, and focus on emerging areas. These pillars form the strategic foundation of the policy, ensuring that it is comprehensive and targeted.- Incentive to Remission Moving away from traditional incentive-based approaches, FTP 2023 emphasizes remission, ensuring that exporters receive appropriate refunds for duties and taxes paid during the export process.
- Export Promotion through Collaboration : Collaboration is a core aspect of FTP 2023, encouraging partnerships between exporters, state governments, districts, and Indian missions abroad. Initiatives such as the "Towns of Export Excellence Scheme" and the "Status Holder Scheme" are designed to recognize and promote new export hubs and top-performing exporters.
- Ease of Doing Business : The policy's significant focus is Simplifying trade processes. This includes reducing transaction costs, promoting e-initiatives, and streamlining customs procedures. The FTP 2023 also integrates e-commerce exports into the mainstream export policy, raising the consignment cap for courier exports to enhance flexibility for exporters.
- Emerging Areas : The policy identifies and supports emerging areas of trade, such as e-commerce and green technology. FTP 2023 outlines strategies for enhancing exports in these sectors through targeted interventions and policy.
Status Holder Certification and Compliance in FTP 2023
Exporters recognized as ' status holders' under the FTP enjoy several benefits, including reduced compliance requirements and priority access to export promotion funds. To obtain this status, exporters must apply online through the DGFT portal, and the status certificates are valid for five years. However, these certificates can be suspended or cancelled if the exporter fails to meet the required export obligations or engages in fraudulent activities. The FTP also mandates that status holders maintain accurate records of their exports and imports for a minimum of two years. In cases where a status certificate is suspended or cancelled, the exporter has the right to appeal the decision within 45 days.Introduction of Amnesty Scheme Under FTP 2023
In line with the government's "Vivaad se Vishwaas" initiative, the FTP 2023 introduces a unique one-time Amnesty Scheme. This scheme is designed to help exporters who have defaulted on their export obligations under the Export Promotion Capital Goods (EPCG) and Advance Authorization schemes. By paying the due customs duties and capped interest, exporters can regularize their cases and get a fresh start. The FTP 2023 also emphasizes the importance of dispute resolution, with the DGFT offering a structured appeal process for exporters who are dissatisfied with decisions regarding their status certificates or other export-related matters. The Foreign Trade Policy 2023 is a forward-looking document that reflects the evolving needs of India's export sector. By focusing on ease of doing business, promoting collaboration, and leveraging digital technologies, the policy aims to position India as a global trade hub. Exporters and importers must familiarize themselves with the regulations and procedures outlined in the FTP to capitalize on the opportunities it presents fully. As the world continues to navigate economic uncertainties, the FTP 2023 offers a robust framework for India to achieve its ambitious export targets and strengthen its position in the global market.Foreign Trade Policy Regulations and Procedures FAQ
What is the role of the DGFT in the implementation of FTP 2023?
The DGFT is responsible for issuing guidelines and procedures to ensure compliance with the Foreign Trade Policy, enabling smooth and regulated trade activities.
How does FTP 2023 address the issue of delayed export payments?
FTP 2023 allows for the extension of export obligation periods under specific circumstances, offering exporters more flexibility in managing payment delays.
Are there any new initiatives under FTP 2023 to support small and medium enterprises (SMEs)?
Yes, FTP 2023 includes provisions like reduced fee structures and enhanced digital access to export benefits specifically aimed at supporting SMEs.
How does FTP 2023 promote environmental sustainability in trade?
The policy introduces incentives for the export of green technology products and supports sectors like renewable energy and sustainable agriculture.
Can exporters under FTP 2023 participate in international trade fairs and exhibitions?
Yes, the policy encourages participation in global trade fairs through specific schemes that offer financial assistance to exporters for marketing their products abroad.
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