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Centre unveils new foreign trade policy; focus on e-commerce, trade facilitation

Under the new policy, designated hubs with warehousing facility will be notified to help e-commerce aggregators for easy stocking, customs clearance and returns processing. Processing facility to be allowed for last mile activities such as labelling. testing, repackaging etc

The new policy aims to boost India's exports to $2 trillion by 2030. (Photo: Bloomberg)Premium
The new policy aims to boost India's exports to $2 trillion by 2030. (Photo: Bloomberg)

New Delhi: The Union government on Friday announced the new foreign trade policy that will focus on emerging areas such as e-commerce exports, greater trade facilitation and developing districts as export hubs. The policy aims to boost India's exports to $2 trillion by 2030, said commerce minister Piyush Goyal.

India’s merchandise exports declined 8.88% in February to touch a four-month low of $33.88bn. Imports contracted by 8.1% to an 18-month low of $51.3 bn during the month, resulting in a trade deficit of $17.43 bn.

In the April-February period, merchandise exports touched $405.9 bn, which is 7.5% higher than the corresponding period last year.

The Foreign Trade Policy 2015-20, which was to end on 31 March 2020, was  extended four times: earlier due to the covid-19 pandemic, and more recently due to global economic uncertainties. It is now valid till 31 March 2023.

The new policy will not have an expiation date and will be continuously updated in response to emerging situation, commerce secretary Sunil Barthwal said.

Foreign Trade Policy is an elaborate framework aiming to increase exports of goods and services as well as generation of employment and increase value addition in the country.

"Designated hubs with warehousing facility to be notified, to help e-commerce aggregators for easy stocking, customs clearance and returns processing. Processing facility to be allowed for last mile activities such as labelling. testing, repackaging etc," Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi said.

Sarangi said that battery electric vehicles (BEVs) of all types, vertical farming equipment, wastewater treatment and recycling, rainwater harvesting system and rainwater filters, and green hydrogen are added to green technology products will now be eligible for reduced export obligation requirement under EPCG Scheme.

He added that the fee reduction is done for MSMEs under the foreign trade policy. From paying 1 lakh for licence, they would be paying 5,000.

The policy assumes significance as India’s foreign trade, exports and imports of merchandise and services, is estimated to cross $1.6 trillion or 48% of India’s nominal GDP of $3.4 trillion for the fiscal year ending March 2023.

Despite sectoral weaknesses, high trade figures underline the emergence of trade as an important component of the Indian economy. Higher trade to GDP ratio also speaks of high trade openness to India practices, Global Trade Research Initiative (GTRI) said.

Higher growth rate in services exports compared to merchandise exports has improved overall performance of India’s exports. A comparison of compound annual growth rate (CAGR) for previous five years (FY18 to FY23) shows that services exports grew at a higher CAGR (9.8%) than merchandise exports (7.5%).

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Updated: 31 Mar 2023, 02:30 PM IST
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