EXCLUSIVE: Commerce Ministry to bring out new Foreign Trade Policy to boost exports

The Ministry of Commerce is expected to come out with the New Foreign Trade Policy (FTP) next month and all eyes are on this new policy, that many experts feel can give a clear-cut direction to boost exports from India and can also enable the trade ecosystem to make Indian exports more competitive.  

The FTP will be a very comprehensive document that will talk not only about various export benefit schemes, but will also go much beyond that, a source familiar with the matter told Business Today. 

“It will go much beyond that it, [and] will be a kind of strategy to take Indian exports to a trillion dollar each for the goods and services. The new policy will be venturing into new areas like e-commerce, developing districts as export hubs, going into the integration into the global value chain and other support measures,” the source said. 

During the COVID-19 pandemic, the government on March 21, 2020, extended the Foreign Trade Policy 2015-20 for one year, till March 31, 2021. And in March 2021, the government had further extended the existing FTP till September 30 this year, according to a Commerce Ministry notification. FTP provides guidelines for enhancing exports to push economic growth and create jobs.  

Since the extended FTP is set to expire in September this year, the new policies to boost exports and jobs will come by next month. 

Another person familiar with the matter told BT that this time the new policy will also focus on reducing compliance burden on small exporters and provide monetary support to MSMEs to boost exports.  

“The new FTP will not be conventional foreign trade policy which we are looking in the new form, maybe from 2022-2027, or maybe from 2022-2024. But it will be a comprehensive document which will look into medium to long-term export goals,” the source added. 

India’s merchandise exports stood at over $420 billion in FY22, which was an all-time-high figure for exports in recent history. The government has set the target of taking exports to $1 trillion by 2030.  

However, amid the ongoing economic slowdown globally, raising exports could seem like a daunting task at this point. Moreover, according to data from the commerce ministry, India’s trade deficit had widened to a record $31 billion in July in comparison to $26.18 billion in June and $10 billion during the year-ago period. In such a scenario, it needs to be seen the kind of direction this new FTP would give to Indian exports, and, to what extent, the Indian government is able to narrow the trade deficit going forward.  

Also read: Issues India’s new foreign trade policy needs to address

Also read: Foreign trade policy 2021-26- Can new FTP refuel India's stagnant exports?