INDIA FOREIGN TRADE POLICY

FOREIGN TRADE POLICY (2023-28)

Significance:

INDIA’S long delayed foreign trade policy has been announced for 2023-28 period. It must be noted that previous foreign trade policy was for 2015-20 period but due to various difficulties it could not be launched between 2020-23.

Target:

• has has set for itself an overly ambitious target of reaching $2 trillion in total exports (goods and services combined) by 2030 from current year’s $760billion(2022-23).
• In last 7 year’s trade has increased by 75%, by these standards it will be a tall order to achieve the currently set targets.

Focus:

The policy emphasizes on ease of doing business, reduction in transaction costs, and e-initiatives, along with initiatives to promote exports, boost manufacturing, and facilitate e-commerce exports. The policy proposes the implementation of the Districts as Export Hubs initiative to support decentralized export promotion.

Gender friendly - Significant miss:

Not mainstreaming gender into the FTP will not only prevent women from significantly contributing to India’s goal of achieving $2 trillion in exports but will also disempower the implementation of the National Trade Facilitation Action Plan (NTFAP) that specifically includes gender mainstreaming on its agenda.

It must be iterated that “being gender blind is not being gender neutral.” Research by the World Trade Organisation (WTO) and World Bank has recently proven that trade and trade policy affect men and women differently — in terms of wages, consumption, welfare and in the quality of jobs created. Therefore, it is vital to include the intent and specific provisions for enabling women in the policies that have an impact on the speed and direction of the country’s trade growth.

Recognising the importance of gender mainstreaming,

• India’s National Trade Facilitation Action Plan (2020-23) had specifically recommended the promotion of “gender inclusiveness in trade” as an action point (Action Point 27).
• A key reason for including gender mainstreaming in the NTFAP was to address the fall in India’s global ranking in the Global Survey on Digital and Sustainable Trade Facilitation carried out by the United Nations.
• The survey covers 53 measures of which 5 measures are related to gender mainstreaming. The NTFAP noted that “gender mainstreaming is the only parameter on which India has not performed as well as its regional counterparts” in the Global Survey on Digital and Sustainable Trade Facilitation.
• India scored an overall 90.3 percent as compared to 78.4 per cent in 2019, but it’s score was only 66 per cent in the “Women in Trade Facilitation”
• In response, the NTFAP’s action point, the Land Port Authority of India is in the process of making the land ports more gender friendly so that more women can participate in cross border trade. This sets an example for other trade bodies and agencies to incorporate gender equality into their policies. Another important aspect of trade policy where gender mainstreaming is expected is in India’s Free Trade Agreements that it is negotiating with the EU, Israel, Canada, and the UK.

How govt. plans to achieve this?

India put its trade policy reset on hold in wake of covid, Russia-ukraine conflict, etc. giving itself time to take a fresh approach to delineating the contours of its trade policy goals. The end result is long on statements of intent. The National Trade Facilitation Action Plan, for instance, lists aims to achieve that are essential and laudable but in no way novel: an improvement in the ease of doing business(which india has significantly improved in the last few years, According to the World Bank, India ranked 63rd in 2022 in ease of doing business across the world among 190 countries, improving its rank from 142 in 2014.) through reduction in transaction cost and time, a reduction in cargo release time, and a paperless regulatory environment.

New policy tries to fulfil its WTO obligations:

India’s WTO obligations, result by virtue of being a member the policy tries to give those obligations due effect via the policy:

• Shift from incentives to an enabling regime of duty remission and exemption schemes to facilitate duty-free imports of inputs required for boosting exports has been near complete.
• Already running schemes including the RoDTEP (Remission of Duties and Taxes on Exported Products), RoSCTL (Rebate on State and Central Taxes and Levies), AA (Advance Authorisation) and EPCG (Export Promotion Capital Goods) have been modified in terms of implementation to improve adoption.
• In the key sector of apparel and clothing, for instance, the facility of self-declaration has now been offered across the board to all exporters.
• A one-time amnesty has also been offered, giving exporters more time to avail of both the AA (Advance Authorisation) and EPCG (Export Promotion Capital Goods).
• With surging online trade, the policy devotes a whole chapter to ‘Promoting Cross Border Trade in Digital Economy’ including moves to facilitate the establishment of dedicated e-commerce export hubs. Still, with global trade largely becalmed and the services sector facing headwinds of uncertainty in the key western markets, the FTP falls short in offering more substantive and sectorally targeted measures as well as a well-defined road map to meet the 2030 export target.