What is foreign trade policy

January 20, 2022

INTRODUCTION

For the past five years, the Foreign Trade Policy has been developed. It investigates, regulates, and enacts regulations governing the export and import of products. The adoption of the Foreign Trade Policy is aligned with the Honourable Prime Minister of India’s goal of ‘Make in India,’ ‘Digital India,’ and ‘Skills India.’ The Indian government developed trade strategy in order to promote the ‘ease of doing business.’ Improving export and import will assist India in contributing to the current era of globalisation. The Directorate General of Foreign Trade is the authorised organisation for Foreign Trade Policy (DGFT).

Legal framework

According to Section 5 of the Foreign Trade (Development and Regulation) Act 1992, the government of India has the authority to enact legislation pertaining to Foreign Trade Policy on an as-needed basis. This clause further says that the legislation enacted shall include particular provisions or exclusions for Special Economic Zones. This trade policy will be in effect for five years, until March 31, 2020. (now extended up to 31 March 2021). The Central Government can also change the trade policy if it is in the public interest. Foreign Trade Policy provisions are specific provisions that take precedence over ordinary requirements. If any benefits were granted prior to the start of the Foreign Trade Policy, they will be reinstated.

The Directorate General of Foreign Trade (DGFT) is responsible for assisting with import and export in the country. It ensures that the whole export and import system is clear and efficient. The DGFT has always prioritised excellent governance. To enhance foreign commerce, the DGFT meets with numerous Export Promotion Councils as well as Trade and Industry authorities on a regular basis. The Niryat Bandhu Scheme is being implemented by the DGFT to mentor new and potential exporters on the complexities of overseas trade through counselling and training.

DGFT has been aiding clients by providing them with timetables. It has also supplied email addresses, phone numbers, and a website for stakeholders to contact with and use. In addition, assistance desks have been established in several zones. The DGFT has also been upgraded with the addition of an online complaint mechanism. Users can lodge concerns and track their status using the online complaint system.

The Department is also in charge of the Special Economic Zone’s trading, export, import, development, multilateral, and bilateral connections.

After India accepted the World Trade Centre Agreement on Trade Facilitation in 2016, the National Committee on Trade Facilitation was formed. After ratifying the Trade Facilitation Agreement, India was required to establish the National Committee on Trade Facilitation (NCTF). The Cabinet Secretary would serve as the committee’s chairman. The NCTF is a multi-ministerial body. The major goal of the National Committee on Trade Facilitation is to support the implementation of the World Trade Organization’s Trade Facilitation Agreement. In addition, the Committee created road maps for trade facilitation. India is not the only country that has established this committee. Trade Facilitation Committees have been established in several nations, including the United Kingdom, Sweden, and some developing countries.

Trade facilitation

The Directorate General of Foreign Trade is responsible for the development of the country’s export and import. The Directorate General of Foreign Trade collaborates with the Export Promotion Council and Trade and Industries authorities to improve openness and efficiency. The Niryat Bandhu Scheme was also launched by the Directorate. People who are new to exporting and importing are given information about it under this system. The initiative also aims to strengthen and expand export and import. Associations have been created with organisations that can improve research in order to do more study and improve the programmes. A Center for Research in International Trade has also been established to promote research in the topic.

A system of online complaints has also been developed, via which exporters desiring to settle their concerns can make online applications. The Reserve Bank of India has launched the Export Data Processing and Monitoring System to investigate exports.

The Central Government also took a significant step toward making conducting business easier by reducing the amount of documentation required for export through Foreign Trade Policy. The transaction time and cost have also been lowered by the creation of an online portal where the importer and exporter can immediately upload the papers and do not need to travel to the Regional Authority for submission of the same every time. In India, an importer exporter code is required for each export or import. This code may now be created electronically and will be emailed to you within two business days. An application to the DGFT is required for this code.

The Foreign Trade Policy also established the idea of Town of Export Excellence, which acknowledges towns with a production value of more than Rs. 750 crore. These towns have the potential to boost the country’s quality exports. The Central Government is providing financial assistance to the communities that have been notified.

A National Committee on Trade Facilitation has also been established as part of the policy. This Committee was formed in response to India’s signature on the World Trade Organization’s Trade Facilitation Agreement. The Committee is in charge of putting into effect the provisions of the WTO Agreement on Trade Facilitation.

Vision and objectives

In this age of globalisation, the Indian government envisioned the Foreign Commerce Policy to boost India’s status in international trade. Exports must be increased, while imports must be reduced. The goal was to make India a worldwide trading leader. Foreign Trade Policy would help foster positive connections with neighbouring nations. Through the programme, India may also keep a close eye on low-quality items by instituting quality controls. India will also expand its international trade market access. The strategy has also acknowledged the importance of branding and, as a result, has created rules under FTP to conduct branding efforts in sectors where India has historically excelled.

India’s Foreign Trade Policy has helped improve manufacturing, infrastructure, and India’s export competitiveness. The main focus of the policy is on increasing the export and import of goods. The FTP has also taken care of the digitalised world and has, therefore, digitized many procedures. For making the process simplified the number of documents required has also been reduced.

Conclusion

India has effectively established its Foreign Trade Policy in order to encourage domestic exports. In its strategy, the government has attempted to enhance exports of items with a solid domestic market base. India is also attempting to boost exports in other industries. India has also long been regarded as one of the most desirable international investment locations. The MEIS and SEIS are fantastic efforts that have combined the different programmes that existed previously in order to boost the export of products and services. Around 70% of India’s exports are made up of items that account for just 30% of world commerce.

REFERENCES

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January 20, 2022