Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

Key highlights of the Foreign Trade Policy, 2023


From UPSC perspective, the following things are important :

Prelims level: Foreign Trade Policy

Mains level: Read the attached story

foreign trade policy

Union Minister of Commerce and Industry has launched the Foreign Trade Policy 2023.

Foreign Trade Policy, 2023

  • The policy is dynamic and open-ended to accommodate the emerging needs of the time.
  • It aims to promote India’s overall exports, which has already crossed US$ 750 Billion.
  • The key approach to the policy is based on these 4 pillars:
  1. Incentive to Remission,
  2. Export promotion through collaboration – Exporters, States, Districts, Indian Missions,
  3. Ease of doing business, reduction in transaction cost and e-initiatives and
  4. Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) Policy

Overview of the FTP, 2023

  • FTP to provide the policy continuity and a responsive framework
  • Approach of FTP: From Incentive to Remission
  • Introduces scheme for remission of duties, taxes and govt levies on export goods
  • Digitisation of applications pertaining to FTP
  • Automatic system-based approval of FTP applications
  • Pilot introduced for cutting processing of applications related to advance authorisation to 1 day
  • Norms for recognition as Star Trading Houses eased
  • Promotes trade in Indian Rupee
  • Introduces provisions for merchanting trade
  • Dairy sector to be exempted from maintaining average export obligation * Battery electric vehicles; vertical farming equipment & green hydrogen eligible for reduced obligation under Export Promotion Capital Goods (EPCG) scheme
  • Special advance authorization scheme extended for apparel & clothing sector
  • Extends all FTP benefits to e-commerce exports
  • Value limit for exports through courier service increased from Rs 5 lakh to Rs 10 lakh per consignment
  • Focus on engaging with states & districts through Districts as Export Hubs initiative
  • Aims at streamlining export of dual use items under SCOMET policy
  • Introduces amnesty scheme for one-time settlement of default in export obligation by advance authorisation and EPCG authorisation holders
  • FTP to be dynamic and responsive to the emerging trade scenario
  • Restructuring of Department of Commerce on the anvil to make it future-ready


Key highlights

(1) Process Re-Engineering and Automation

  • The policy emphasizes export promotion and development, moving away from an incentive regime to a regime which is facilitating, based on technology interface and principles of collaboration.
  • Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits.
  • Duty exemption schemes for export production will now be implemented through Regional Offices in a rule-based IT system environment, eliminating the need for manual interface.

(2) Towns of Export Excellence

  • Four new towns have been designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns.
  • The TEEs will have priority access to export promotion funds under the Market Access Initiative (MAI) Scheme.
  • It will be able to avail Common Service Provider (CSP) benefits for export fulfilment under the EPCG Scheme.

(3) Recognition of Exporters

  • Exporter firms recognized with ‘status’ based on export performance will now be partners in capacity-building initiatives on a best-endeavour basis.
  • 2-star and above status holders would be encouraged to provide trade-related training based on a model curriculum to interested individuals.

(4) Promoting Export from the Districts

  • The FTP aims at building partnerships with State governments and taking forward the Districts as Export Hubs (DEH) initiative.
  • This would promote exports at the district level and accelerate the development of grassroots trade ecosystem.

(5) Streamlining SCOMET Policy

  • India is placing more emphasis on the “export control” regime.
  • A robust export control system in India would provide access of dual-use High end goods and technologies to Indian exporters while facilitating exports of controlled items/technologies under SCOMET from India.


(6) Facilitating E-Commerce Exports

  • Various estimates suggest e-commerce export potential in the range of $200 to $300 billion by 2030.
  • FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and related elements such as payment reconciliation, book-keeping, returns policy, and export entitlements.
  • As a starting point, the consignment wise cap on E-Commerce exports through courier has been raised from ₹5Lakh to ₹10 Lakh in the FTP 2023.

(7) Facilitation under Export Promotion of Capital Goods (EPCG) Scheme

The government has made several changes to the Foreign Trade Policy, including:

  • Adding PM MITRA scheme for textile and apparel parks to EPCG’s Common Service Provider Scheme
  • Exempting dairy sector from maintaining Average Export Obligation
  • Adding green technologies such as BEVs, vertical farming equipment, and rainwater harvesting to EPCG’s reduced Export Obligation requirement.

(8) Facilitation under Advance authorization Scheme

  • DTA (Domestic Tariff Area) units can access the Advance Authorization Scheme for duty-free import of raw materials for manufacturing export items, and it can be used for domestic and export production.
  • The Special Advance Authorization Scheme has been extended to the Apparel and Clothing sector to facilitate prompt execution of export orders.
  • The Self-Ratification Scheme for fixation of Input-Output Norms has been extended to 2-star and above status holders.

(9) Merchanting trade

  • The FTP 2023 has introduced provisions for merchanting trade, which allows the shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary.
  • This will be subject to compliance with RBI guidelines, and it won’t be applicable for goods/items classified in the CITES and SCOMET list.
  • This is expected to allow Indian entrepreneurs to convert certain places into major merchanting hubs.

(10) Amnesty Scheme

  • The government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default on Export Obligations and provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations.
  • All pending cases of default in meeting Export Obligation (EO) of authorizations can be regularized on payment of all customs duties that were exempted in proportion to unfulfilled Export Obligation.
  • The interest payable is capped at 100% of these exempted duties under this scheme, and no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty.


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