Foreign Trade Policy 2015-20
It provided a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision.
- The focus of the policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.It described the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade ecosystem.
Features of the FTP
- Goods– Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding merchandise exports with different kinds of duty scrips with varying conditions attached to their use
- Duty-free scrips are paper authorisations that allow the holder to import inputs which are used to manufacture products that are exported, or to manufacture machinery used for producing such goods, without paying duty equivalent to the printed value of the scrip.
- Under the Foreign Trade Policy, all these schemes have been merged into a single scheme, namely the Merchandise Export from India Scheme (“MEIS“) and there is no conditionality attached to scrips issued under the MEIS.
- Services– The Served From India Scheme has been replaced with the Service Exports from India Scheme (“SEIS“). SEIS rewards to all service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider.
- Special Economic Zones – policy outlines extended incentives for SEZs in India.
- Export Houses– The nomenclature of Export House, Star Export House, Trading House, Star Trading House, Premier Trading House certificate has been simplified and changed to One, Two, Three, Four and Five Star Export House.
- Status Holders– Business leaders who have excelled in international trade and have successfully contributed to India’s foreign trade are proposed to be recognized as Status Holders and given special privileges to facilitate their trade transactions, in order to reduce their transaction costs and time.
- Resolving Complaints –In an effort to resolve quality complaints and trade disputes between exporters and importers, a new chapter on Quality Complaints and Trade Disputes was incorporated into the Foreign Trade Policy.
- No conditionality attached to any scrips issued under these schemes.
- For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2% to 5%.
- Under SEIS the selected Services would be rewarded at the rates of 3% and 5%.
In the mid-term review of FTP 2015–20, the Ministry of Commerce and Industry enhanced the scope of MEIS and SEIS, increased MEIS incentive raised for ready-made garments and made-ups by 2% and raised SEIS incentive by 2% and increased the validity of Duty Credit Scrips from 18 months to 24 months. The existing FTP 2015-20, is extended up to September 30, 2021.
New Foreign Trade Policy 2021-26
With the new trade policy 2021-26, the government plans to increase merchandise exports with emphasis on the higher share of MSMEs.
- Foreign trade policy 2021-26 is expected to focus on MSMEs and new export potential.It is also expected to boost e-commerce exports and identify new sectors to boost domestic export.
Its trade policies, Government reforms and inherent economic strengths has attributed to its standing as one of the most sought-after destination for foreign investments in the world. Also, technological, and infrastructural development being carried out across the country augurs well for the trade and economic sector in the years to come.