Due to the ambiguity and volatility instigated by Covid 19, FTP which was to end by 31/03/2020 got extended to 31/03/2023. FTP 2020 to a great extent aided in increasing exports manifold.
All About New FTP 2023
- Policy changes were being undertaken since 2015 even without announcement of a new FTP.
- It intends to provide the policy continuity and a responsive framework
- Continuous feedback will be taken from trade and industry to streamline the process and keep them updated
New FTP Approach
- Stride towards Tax remissions
- Deploying automations and process re-engineering to facilitate trade
- Emphasis on export promotion through meaningful collaborations
- Focus on Emerging avenues: Developing of export Hubs, streamlining SCOMET
(Tit bit: SCOMET stands for certain dual use items that can be used for civilian cum military purposes)
Key takeaways of FTP 2023 #1: Ease of doing business, Reduction in transaction cost and e initiatives
- Online approvals without physical interface
- Auto approval of permissions through process simplifications.
- Immediate approvals under direct route for exporters.
Drastic reduction of processing time to 1 day.
- Reduction in user charges for MSMEs under AA and EPCG
- Reduced application for advance authorizations
- Benefit to 55-60% of MSME Exporters
Fee reduced to 100, 5000, 5000 based on differential values of License.
- E-Certificate of Origin:
(Certificate of Origin: an important international trade document that certifies that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country)
- Revamp of e-certificate of origin platform proposed to provide for self-certification of CoOs as well as Auto approvals of CoOs where feasible.
- Initiatives for electronic exchange of Coo data with partner countries envisaged.
- Paperless filing of export obligation discharge applications
- Authorizations redemption applications to be paperless. Issuance was already made paperless
Key takeaways of FTP 2023 #2: Export promotion initiatives:
- Rationalization of status holder export thresholds
This enables achievement of higher status and reduced transportation cost for exports.
(Status holders are eligible to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakhs or 2% of average annual export realization during the preceding three licensing years, whichever is higher.
- Rupee payment to be accepted under FTP Schemes
This is a catalyst in internalization of Rupee. The de alignment from US Dollar is a new emerging cult. Countries like China, Russia, Kenya, Etc are actively engaging in trading in their native currencies. India is also marching towards it.
- Towns of Export Excellence declared: Faridabad, Moradabad, Mirzapur, Varanasi for Apparels, Handicrafts, Handmade carpets & Dari, Handlooms & Handicraft. This declaration is in addition to 39 existing TEEs existing TEEs
Key takeaways of FTP 2023 #3: Districts as Export hubs Initiatives.
This policy is in tandem with ODOP scheme (One district One product)
- States and Districts as partners in export promotion
- Districts as Export Hubs aims to boost India’s foreign trade by decentralizing export promotion.
- Identification of products/services in all the districts.
- Create institutional mechanisms at the State and District level to strategize
- Preparation of District Export Action Plans (DEAPs) outlining the action plan to promote identified products and services.
- Make States and Districts meaningful stakeholders and active participants
- Capacity building at district level
- Capacity building to create new exporters and identification of new markets.
- Training, handholding, and outreach programs by DGFT field offices in coordination with District Industries Centres.
- Regional Authorities of DGFT working with the States/UTs to prepare
- District specific Export Plans.
- Infrastructure and logistics development intervention
- To address Infrastructure and Logistics bottlenecks impeding exports.
- Focus on development of logistics, testing facilities, connectivity for exports and other export-oriented ecosystem.
- Convergence of ongoing schemes to support these initiatives
Key takeaways of FTP 2023 #4: E-commerce Exports
- Facilitation for E-Commerce exports
- All FTP benefits to be extended to e-Commerce exports.
- To streamline e-Commerce export facilitation – Guidelines being formulated in consultation with other ministries to facilitate further exports under e-Commerce.
- Special outreach and training activities for small e-commerce exporters
- Handholding through industry and knowledge partners
- Dak Ghar Niryat Kendras shall be operationalised throughout the country to work in a hub-and-spoke model with Foreign Post Offices (FPOs) to facilitate cross-border e-Commerce and to enable artisans, weavers, craftsmen, MSMEs in the hinterland and land-locked regions to reach international markets.
- E-Commerce Export Hubs
- 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
Key takeaways of FTP 2023 #5: Steps to boost Manufacturing
- Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA)
- Dairy sector to be exempted from maintaining Average Export Obligation
- Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment and Recycling, Rainwater harvesting system etc are added to Green Technology products – will now be eligible for reduced Export Obligation requirement under EPCG Scheme
- Special Advance Authorisation Scheme extended to export of Apparel and Clothing sector under para 4.07 of HBP on self-declaration basis to facilitate prompt execution of export orders – Norms would be fixed within fixed time-frame.
- Benefits of Self-Ratification Scheme for fixation of Input-Output Norms extended to 2 star and above status holders in addition to Authorised Economic Operators at present.
- Fruits and Vegetables exporters are being included for double weightage for counting export performance under eligibility criteria for Status House Certification. This is in addition to existing MSME sector who also get double weightage.
Key takeaways of FTP 2023 #6: Special One time Amnesty scheme for default in export Obligations
- In the interest of trade and industry and to motivate the exporters, relief to be
- provided to exporters who are unable to fulfil their EO against the EPCG and Advance Authorizations
- Amnesty scheme shall be available for a limited period, up to 30.09.2023
- Cases under investigation for fraud and diversion are not eligible under this scheme.
- Key takeaways of FTP 2023 #7: Emphasis on streamlining SCOMET Licensing Procedure
- Focus of FTP 2023 on Special Chemicals, Organisms, Materials, Equipment
and Technologies (SCOMET)
- Policy for export of dual use items under SCOMET consolidated at one place
for ease of understanding and compliance by industry.
- Focus on simplifying policies to facilitate export of dual use high end
goods/technology such as UAV/Drones, Cryogenic Tanks, Certain chemicals etc.
Amidst such a turbulent geo political environment FTP has to focus onto
- Providing a dynamic response to emerging trends
- Fuel exports from grassroots
- Actively internalize Indian rupees in global forex arena
- Set sector specific goals and achieve them.
- Work towards building strategic position, strengthening multilateral trade relations.