The Foreign Trade Policy 2015-20 determines our country’s foreign policies concerning commerce, business, and trade. It was published by the government as a means to boost India’s participation in global trade by improving our export and import services. The policy also focused on bettering our employment opportunities and aims to improve the country’s economic standing. Besides, it also came out with a lot of policies that were in line with the ‘Make in India’ initiative which was previously launched by the then Prime Minister of India.
The Foreign Trade Policy 2015-20 determines our country’s foreign policies concerning commerce, business, and trade. I would like to draw your attention to a notice issued on the 31st August 2020 by the Ministry of Commerce regarding the requirements for applying for an export licence for shipments of N95/FFP2 masks. As per this, online applications filed by such exporters only from September 7 to 9 will be considered for granting export licence by Directorate General of Foreign Trade (DGFT), till further orders.
Foreign Trade Policy Of India
The last two decades have seen an exponential rise in trade within the country, with the domestic economy growing in leaps and bounds. This growth has helped the Indian domestic economy grow to ₹ 153 trillion from ₹ 32 trillion in 2004 (Source: India Brand Equity Foundation). This has also led to an increase in the average per capita income of workers within the country. This, in turn, has also helped in growing the overall GDP of the country, thanks to unprecedented growth in the external trade sector of India.
The Foreign Trade Policy of 2015-20 aims to further this growth and make India a super-player in international trade by the end of 2020. The objective is to promote the export and import of goods and services, and also wants to make it easier for manufacturers to access hidden and untapped markets. Through this policy, the government is trying to provide security, support, and technical help to the manufacturing sectors, to facilitate ease of doing business.
Key Highlights
- The FTP helps to increase our export capabilities and through that aims to improve employment generation and value addition within the country via the ‘Make in India’ programme.
- It also aims to improve our country’s response to external challenges and changes in the economic environment, allowing for the rapidly evolving trading architecture.
- The Policy had also brought in two new schemes, named Merchandise Exports from India and ‘Services Exports from India Scheme for improving our export capabilities.
- Also, as per these schemes, any goods which have duty credit scrips issued against them, maybe fully transferred.
- Under the MEIS, countries have been split into 3 groups to provide rewards between 2 and 5%, while under SEIS, rewards range between 3% and 5%.
- The policy, through the EPCG scheme, has also made it possible to acquire goods from indigenous manufacturers.
- Furthermore, the policy has made it possible to boost exports for defence and hi-tech fields.
- Exports such as handloom items, books, leather items, fashion items and toys that are sent via post are eligible to get MEIS benefits up to ₹ 25,000.
- Manufacturers who can produce goods in phases within the country will also now get preferential treatment under various agreements, helping such manufacturers get easy access to untapped international markets.
- The policy has also made arrangements for a fast track clearance facility for products that allow the assurance of quality products. The same policy also allows for the setting up of warehouses near ports and the availability of duty-free equipment for training.
- To boost exports, over 108 MSME clusters have been founded.
- The Niryat Bandhu Scheme’ has been established to promote the ‘Skill India’ campaign.
- Also, the FTP focuses on creating a paperless environment in the years to come.
Mid-Term Review
Following the release of the Policy in April 2015, the government followed it up with a mid-term review in December 2017 to gauge the effectiveness of the Policy. The mid-term review aimed to better the effectiveness of the schemes and add more schemes which helped with establishing an environment where it was easy to do business. This also meant shifting the real decision-making power from the Central Government to various State Governments as required. The following are the main highlights of the Mid-Term Review.
- MEIS industries such as carpet making, leather, hand tools, and scientific and medical products, have been given priority and their trade rates have been increased by 2%. The rates of industries such as accountancy, legal infrastructure, architecture, service sectors such as hotels and the education sector have also increased similarly.
- The Authorised Economic Operators scheme allows for easier customs clearance in both foreign markets and India.
- An Agricultural Export Policy which aims to double farmers’ income via providing opportunities for long-term exports will soon be released.
- A new Logistics Division will also be set-up by the Department of Commerce.
- Another important step will be the creation of a National Logistics Information Portal which may be accessed by online market players to reduce logistics costs. This Portal will be helped and supported by the Trade Facilitation Agreement and a new e-Way Bill will also be introduced.
- Furthermore, Importer Exporter Code will give way to a Permanent Account Number.
- The script will now be valid for 2 years, instead of the 18 months it was valid for before.
- Also, DTA sales on import duty were removed and restrictions have been relaxed.
- A new ARO facility has been introduced and the export obligation has been extended.
Conclusion
Hopefully, we have provided you with sufficient information about your concern; however, please do not hesitate to leave a comment if you need further assistance.
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