Foreign Trade Policy 2023: Piyush Goyal unveils new policy, aims $2 trillion exports by 2030

Commerce minister Piyush Goyal unveiled the new Foreign Trade Policy (FTP) 2023 today, 31 March 2023. The new policy aims to increase India's exports to $2 trillion by 2030 by shifting from incentives to remission and entitlement-based regimes. The current FTP 2015-20, which has been repeatedly extended at the request of the industry due to global risks like the Covid-19 pandemic and the Ukraine crisis, expires on March 31, 2023.

In contrast to the custom of issuing a 5-year FTP, Santosh Sarangi, director general of foreign trade (DGFT), said that the new policy has no expiration date and would be amended as and when necessary.

The FTP has the following highlights:

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• Instead of 5-year policy, the new policy is perpetual which will ensure more continuity in policy.
• The export targets for the next 2- 3 years are on the more optimistic side as the world economy is slowing down significantly, and inflation and recessions are real threats to growth.
• Digitisation of export promotion schemes is good as it will reduce paperwork as well as bureaucracy.
• Lowering the limit for recognising the exporters is a good step.
• Added emphasis on manufacturing exports is a good step as India needs to increase its competitiveness.

According to Rohit Arora, co-founder, and CEO of Biz2Credit, "The challenges which the govt need to tackle including the big emphasis which the US govt has put on increasing the manufacturing competitiveness of US and related Free Trade Zones under the Inflation Reduction Act ( IRA), as well as Chips Act, will lead to over $500 billion in subsidies for high tech as well as clean energy manufacturing. This will make the US a very competitive nation both for internal production as well as exports in the tech manufacturing space. Also, the lack of Free Trade agreements (FTAs) with major economies in the world is leading to a competitive disadvantage for Indian exporters."

"Also nearshoring trends like setting up facilities in Mexico by Chinese companies are going to trump friend shoring strategies and this needs to be addressed by making Indian exporters more competitive. No mention of better and cheaper access to credit for Indian exporters is also a major issue in the competitiveness of the export sector," Arora added.