Our foreign trade policy bets on e-commerce for an export jump
SummaryFTP 2023 seeks to ease and enable exports with measures that are broadly in the right direction although some gaps remain
The much awaited Foreign Trade Policy (FTP) 2023 is innovative and different from its predecessors. While earlier FTPs launched new schemes and incentives, this FTP is a deviation. It tries to move away from an incentive-based regime towards creating an enabling ecosystem for Indian exporters. This is because a number of our export-linked subsidies—some offered under the previous FTP (for 2015-20)—were challenged by the US as prohibited subsidies under the World Trade Organization’s (WTO) Agreement on Subsidies and Countervailing Measures. India lost the case at the WTO in 2019 and had to withdraw these subsidies or replace them with WTO-compliant supports like the Remission of Duties and Taxes on Export Products (Rodtep) Scheme, which replaced the previous Merchandise Exports from India Scheme (MEIS). In the new FTP, there has been a shift from announcing new subsidies to focusing on the ease of doing business and facilitating the integration of Indian small and medium enterprises (SMEs) with global value chains.