The Indian government has announced a new Foreign Trade Policy (FTP) that will come into effect on April 1, 2023. Unlike previous policies, this one will be an open policy without any closing period. It will provide continuity in all schemes and offer flexibility to address various issues as they arise, making it more exporter-friendly.
The extension of the Foreign Trade Policy 2015-20 until March 31, 2023, was due to the prolonged lockdown caused by the coronavirus pandemic and its impact on the Indian economy. With the new policy, the government hopes to provide a boost to the country's exports.
Government's decision to continue the Export Promotion Capital Goods (EPCG) scheme and the Special Advance Authorization Scheme for the textiles and clothing industry, as been applauded. This move will help the industry to bridge the gap in the supply-demand of textile machinery and raw materials, which are heavily dependent on imports. Additionally, the policy will allow for the import of speciality raw materials that are not manufactured in India, thereby enhancing the industry's global competitiveness.
Another significant feature of the policy is the Amnesty Scheme, which settles unfulfilled obligations under the Advance Authorization Scheme and EPCG Scheme, capping interest to 100%, excluding additional and special additional duty from the export obligation, waiving penalty, and other measures would greatly benefit the textiles and clothing industry, particularly the spinning sector, by relieving them of long-pending disputes and problems.
The policy's focus on increasing exports and reducing the risk of forex rate volatility by enabling money transactions in Indian Rupee with certain countries and the policy's efforts to decentralize export promotion activities by making each district an export hub with e-commerce and inclusive growth initiatives have also been appreciated, as this move would greatly benefit the Micro, Small, and Medium Enterprises (MSME) exporters, which account for over 80% of the textiles and clothing value chain.
