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In the context of changing dynamics of commerce and trade, Discuss the challenges in formulation of a new Foreign Trade Policy for India.

Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

5. In the context of changing dynamics of commerce and trade, Discuss the challenges in formulation of a new Foreign Trade Policy for India. (250 words)

Difficulty level: Moderate

Reference: orfonline.org

Why the question:

In 2022, India is set to introduce a new Foreign Trade Policy (FTP) that will set a guideline to the broader trade regime in the next 5 years.  

Key Demand of the question: 

To understand the present day challenges in formulating a Foreign trade policy, as the focus has shifted from Nations to e Commerce giants.

Directive word: 

Discuss – This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them. You must give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

Begin by mentioning how the trade dynamics across borders have changed in the past one decade.

Body:

First, mention the roles and responsibilities of DGFT (Director General of Foreign Trade) to take confidence of various stakeholders such as Industry chambers, trade associations, commodity boards etc.

Next, highlight the various factors such as changing needs of a digital economy, role of GST, balancing the export and import industry, alignment of the FTP with the macro economic vision of the nation etc.

Next, analyse trade policy in the backdrop of restrictive trade policy tools such as tariffs, export restrictions, anti dumping duties etc.

Conclusion:

Conclude by saying that India needs to take a fine policy balance of promotion of Foreign trade alongside the Aatmanirbhar mission.