![India: Macroeconomic Picture
3
GDP Growth: 8.7% (2021-22)
Projected GDP growth rate
(2023-24): 6.5%
GDP growth rate (2022-23):
7%
Overall Exports (merchandise +
services):
$ 676 Billion (FY22)[YoY-36%]
$ 760* Billion (FY23)[YoY-12.4%]
➔ India is now the world’s fifth largest economy (in current dollars).
➔ By March 2023, the nominal GDP of India will be around US$ 3.5 trillion.
*projected estimates
Sources: Economic Survey 2023, PIB](https://image.slidesharecdn.com/presentationftp202331-240120090942-4772d5aa/85/Presentation-_FTP-2023-31-03-2023-Final-pdf-3-320.jpg)
Presentation _FTP 2023 31.03.2023 Final.pdf
- 1. Foreign Trade Policy 2023 31.03.2023 Directorate General of Foreign Trade Department of Commerce Ministry of Commerce and Industry Government of India 1
- 2. Outline of the Presentation • Indian Economy and Trade Scenario • Background -FTP 2015-20 • Progress made since 2015 • FTP 2023 – Introduction • FTP 2023 – Key Highlights • Way Forward 2
- 3. India: Macroeconomic Picture 3 GDP Growth: 8.7% (2021-22) Projected GDP growth rate (2023-24): 6.5% GDP growth rate (2022-23): 7% Overall Exports (merchandise + services): $ 676 Billion (FY22)[YoY-36%] $ 760* Billion (FY23)[YoY-12.4%] ➔ India is now the world’s fifth largest economy (in current dollars). ➔ By March 2023, the nominal GDP of India will be around US$ 3.5 trillion. *projected estimates Sources: Economic Survey 2023, PIB
- 4. Global Trade Scenario ● IMF Growth Projections: ● Russia-Ukraine crisis, rising inflation, geopolitical tensions are some main pain points in global macroeconomic growth. ● India’s projected growth is more than double the projected growth for the world. ● The WTO’s global trade forecast predicts growth in world trade to slow down to 1 percent in 2023, due to global uncertainties. Export scenario will remain challenging. (Real GDP, annual percent change) 2022 2023 2024 World Output 3.4 2.9 3.1 India 6.8 6.1 6.8 4 Source: IMF World Economic Outlook, January 2023
- 5. India’s Export Growth **Total Exports in FY2023 is Projected to cross US$ 760 Bn 5
- 6. Success Stories of India’s Exports 6 Source: DGCI&S Engineering Export Agriculture Export
- 7. Success Stories of India’s Exports 7 Source: DGCI&S Pharma Export Electronic Goods Export
- 8. Success Stories of India’s Exports 8 Source: DGCI&S Marine Product Export Toy Export
- 9. FTP 2015-20: Background 1. The Foreign Trade Policy 2015-20 which was to end on 31.3.2020 was extended due to COVID pandemic and volatile geo-political scenario till 31.03.2023. 2. Rationalization of export oriented schemes was done under the policy. 3. India has scaled record all-time high of Export Performance in Merchandise and Services Exports during this period. 4. India's Merchandise and Services exports is expected to cross record $760Bn in FY22-23. 5. FTP 2015-20 contributed in this effort. 9
- 10. 1. E-Certificate of Origin Platform : Electronic Platform for Preferential Certificate of Origin implemented. 120+ issuing agencies, 160 specific offices and 600+ issuing officers are currently on-board the platform. Around 18+Lakh CoOs have been issued from the e-platform till date. 2. 24x7 Auto-Generation of e-IEC (Importer Exporter Code). No need to wait on any approval for an IEC. The IEC details are automatically validated against CBDT, MCA, PFMS and GST systems 3. Trade Facilitation App: Information on Foreign Trade Policy Updates, Import/Export Policy, Export/Import Statistics, status of applications, 24x7 virtual assistance is available. 4. e-RCMC – Digitisation through Common Digital Portal for issuance of RCMC by Export Promotion Councils/Commodity Boards 5. Covid Helpdesk - Department of Commerce/DGFT had operationalised a Covid Helpdesk to support and seek suitable resolutions to issues faced by the exporters. 6. Contact Centre & Helpdesk Services were launched to resolve exporters’ queries, grievances and suggestions.. 7. National Trade Facilitation Action Plan 2020-23 under implementation & working on NTFAP 2023-26. FTP 2015-20: Progress Made 10
- 11. 8. Online Data Exchange - Streamlined online data exchange with other govt. agencies including CBIC, CBDT, MCA, PFMS 9. National Single Window System(NSWS) : Integration with National Single Window System 10. Self Ratification Scheme : Advance Authorization simplified for AEOs to avail benefits on self- declaration basis without the need of going through the process of norms fixation. 11. Special Advance Authorization Scheme for the export of Articles of Apparel and clothing accessories: Allows duty-free import of input fabric, including interlining for shipping articles of apparel and clothing accessories. Exporters shall be eligible for All Industry Rate of Duty Drawback, for non fabric inputs. 12. ₹ 56,000 Crore allocated for payment of accumulated arrears under various scrip based schemes. 13. Establishing India’s presence in High-End Dual Use Good And Technologies for SCOMET through alignment with Wassenaar Agreement and liberalizing the policy for certain items with one time general export authorizations for exporters removing the need for applying multiple times with DGFT FTP 2015-20: Progress Made 11
- 12. FTP 2023: Background 12 1. The Foreign Trade Policy 2023 being announced to provide the policy continuity and a responsive framework. 2. Policy changes done since 2015 even without announcement of a new FTP responding dynamically to the emerging situations. 3. Subsequent revision of the policy not linked to any date and shall be done as and when required. 4. Incorporating feedback from Trade and Industry to streamline processes and update FTP, from time to time.
- 13. FTP 2023: Approach 13 From Incentive to Remission Export Promotion through Collaboration - Exporters, States, Districts, Indian Missions Ease of doing business, reduction in transaction cost and technology Interface Emerging Areas – E-Commerce, Developing Districts as Export Hubs and streamlining SCOMET policy
- 14. FTP 2023: From Incentive to Remission A. Introduction of Duty Remission Schemes Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) and Remission of State and Central Taxes and Levies (RoSCTL) notified with the objective to remit the taxes paid on the notified goods exported B. Continuation of Duty Exemption Schemes Duty Free input/raw material from overseas supplier or through domestic supplier being ensured through Advance Authorisation /DFIA scheme. Technological upgradation through duty free import or indigenous sourcing of capital goods under Export Promotion Capital Goods(EPCG) scheme. 14
- 15. FTP 2023: Ease of Doing Business 1. Digitization of Applications pertaining to FTP: Export promotion schemes processes for managing the lifecycle of AA/EPCG/DFIA/Import/Export Licensing made completely paperless and online 2. Automatic System-Based Approval of FTP Applications - DGFT implemented rule-based automatic approval systems using Business Analytics Tools. It has been introduced on pilot basis for Advance Authorization Extension/Revalidation Applications. 15 Type Current processing time Automatic route processing time Advance authorization issuance 3 to 7 days 1 day EPCG issuance 3 to 7 days 1 day Revalidation of authorizations 3 days to 1 month 1 day Export Obligation period extension applications 3 days to 1 month 1 day
- 16. FTP 2023: Ease of Doing Business 3. Application fee reduced for Advance Authorization and EPCG Schemes for MSMEs (55-60% of beneficiaries under the schemes). 4. Process Re-engineering undertaken for streamlining as well automating processes. E.g. Standardization of Composition Fees for extension of AA. Benefit for an authorisation with CIF value of Rs 10 crores, with around 50% EO completion is illustrated as under 16 CIF Value/Duty saved value (in ₹) Fee for Non-MSMEs (in ₹) Fee for MSMEs(in ₹) Up to 1 crore 1 per 1000 100 1 crore to 10 crores 1 per 1000 5000 Above 10 crores Cap at 100000 5000 Type of extension Earlier Fee (in ₹) New Fee (in ₹) First EOP extension for 6 months Above 3 lakhs 10000 fixed Second EOP extension for 6 months Above 20 lakhs 20000 fixed EOP extension for pre-import condition items Above 30 lakhs 10000 fixed
- 17. FTP 2023: Recognition to Exporters 17 Export performance threshold for Recognition to Exporters through Status Holders rationalized. Enabling more beneficiaries to achieve higher recognition and brand image Status House Category Existing Export Performance Threshold (in USD Million) Revised Export performance Threshold (in USD Million) One Star 3 3 Two Star 25 15 Three Star 100 50 Four Star 500 200 Five Star 2000 800
- 18. FTP 2023: Export promotion initiatives 18 Merchanting Trade Reform 1. Provisions for merchanting trade introduced under FTP 2. To boost merchanting activities from India – where goods do not touch Indian border. The merchant buys from one country and supplies to another country while based in India 3. Expected to facilitate merchanting trade from India making India a trade hub Internationalization of Trade in Rupees International Trade Settlement in INR allowed and changes introduced in the FTP for grant of export benefits & fulfillment of Export Obligation for export realizations in INR as per RBI.
- 19. FTP 2023: Export promotion initiatives 19 • Four new Towns of Export Excellence (TEE) are being declared in addition to the already existing 39 towns of export excellence. • To give thrust to cluster based economic development Towns of Export Excellence - Benefits ● Recognition – global recognition and brand credibility ● Market Access Initiative Scheme – financial assistance for marketing, visit to trade fairs/exhibitions, capacity building and technological services ● Common Service Provider facility – CSP facility under EPCG scheme helps in increasing competitiveness of entire cluster by enabling common use of capital goods for exports Town of Export Excellence Product Category Faridabad Apparel Moradabad Handicrafts Mirzapur Handmade Carpet and Dari Varanasi Handloom & Handicraft
- 20. FTP 2023: Steps to boost manufacturing 20 1. Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme has been added as an additional scheme eligible to claim benefits under CSP (Common Service Provider) Scheme of Export Promotion capital Goods Scheme (EPCG). 2. Dairy sector to be exempted from maintaining Average Export Obligation – to support dairy sector to upgrade the technology 3. Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment and Recycling, Rainwater harvesting system and Rainwater Filters, and Green Hydrogen are added to Green Technology products – will now be eligible for reduced Export Obligation requirement under EPCG Scheme 4. Special Advance Authorization Scheme extended for Apparel and Clothing sector to facilitate prompt execution of export orders – Norms would be fixed within fixed time-frame 5. 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. 20
- 21. FTP 2023: Facilitating E-Commerce exports 21 Facilitation • FTP benefits to be extended to E- Commerce exports • The value limit for exports through courier service increased from ₹ 5 Lakhs to ₹ 10 Lakhs per consignment. • Necessary enablement of IT systems in Department of Commerce, Posts, CBIC to be completed in six months • 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 To formulate policy for E-Commerce Export Hubs ● Estimates suggest that the E-Commerce exports expected to grow to $200-300 Billion by 2030 ● Designated zone with warehousing facility to be created ● Designed 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. ● Simplified return process into the zone
- 22. FTP 2023: Facilitating Exports from Districts Focus on engaging with the States and Districts through the Districts as Export Hubs initiative through: 1. Identification of Products and Services in each District of the country 2. Institutional mechanism (Constitution of SEPC & DEPC in States and Districts) 3. Preparation and implementation of District Export Action Plans( DEAPs) in each District 4. Export promotion outreach in districts 5. Jurisdictional Nodal DGFT RAs to implement the initiative in collaboration with all the concerned stakeholders. 6. Convergence of ongoing schemes to support the initiative 7. Working with Indian missions to promote identified products /services. 22
- 23. FTP 2023: Streamlining SCOMET Policy 23 1. Policy for export of dual use items under Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) consolidated at one place for ease of understanding and compliance by industry 2. SCOMET policy emphasizes India’s export control in line with its International commitments under various export control regimes (Wassenaar arrangement, Australia group and Missile Technology Control Regime) to control trade in sensitive/dual use items/technology 3. Focus on simplifying policies to facilitate export of dual use high end goods/technology such as UAV/Drones, Cryogenic Tanks, Certain chemicals etc.
- 24. Amnesty Scheme 24 1. In the interest of trade and industry and to motivate the exporters, relief provided to exporters who are unable to fulfill their EO against the EPCG and Advance Authorizations 2. Amnesty scheme for one time settlement of default in export obligation by Advance Authorization and EPCG authorization holders being introduced. 3. All pending cases of the default in meeting Export Obligation (EO) of authorizations mentioned 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. However, no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty.
- 25. Way Forward 25 1. Foreign Trade Policy to be dynamic and responsive to the emerging trade scenario 2. Consultative mechanism to resolve issues of trade and Industry 3. Working towards making Indian Rupee(₹) a global currency and allowing International Trade settlement in INR 4. Wider Engagement with States and Districts to promote exports from the grassroots. 5. Focus on E-commerce exports to streamline processes and make it easier for exports to grow in E-Commerce space 6. Sector specific targets to achieve the goal of 1 trillion dollar merchandise exports and 1 trillion dollar services exports by 2030 7. Restructuring of Department of Commerce to make it future ready
- 26. Thank you 26