The Union Ministry of Commerce and Industry (MoCI) recently announced India’s new Foreign Trade Policy for 2021-2026. Check out this post to know 3 of the primary objectives of this new trade policy.
India’s Foreign Trade Policy (FTP) aims at building a framework to boost exports and employment in the country. While the current FTP for 2015-2020 was to expire in March 2021, it has been extended for 6 months due to the current pandemic. As a result, the new FTP for 2021-2026 will now come into effect from 1 September 2021 and be applicable for 5 years.
The Union Ministry of Commerce and Industry (MoCI) first introduced FTP 2021-2026 in January 2021 when it was presented and passed by the Parliamentary Consultative Committee (PCC). While several new initiatives have been introduced under the new FTP, here are the 3 primary objectives of this policy-
1. Making India a USD 5 Trillion Economy
The NDA government has been aiming to make India a USD 5 trillion economy since they came into power. The new FTP focuses on the government’s goal by boosting exports in the merchandise and service sectors. The policy aims at addressing various national and international constraints regarding regulatory and policy framework to help exporters.
Reducing transaction costs, improving ease of doing business in the country, and efficient use of infrastructure and utility for creating a low-cost environment are some ways in which the FTP aims to boost the country’s economy.
2. Introduction of District Export Hubs
Another vital aspect of the new FTP 2021-2026 is the implementation of district export hubs. Under this initiative, the government will aim to convert every district in the country into a potential hub for exports. Potential services and products will be identified in every district, and export promotion panels will be formed to provide the necessary assistance.
Through the Director General of Foreign Trade (DGFT), the government will engage with state governments and union territories to implement this policy in stages. The initiative is primarily targeted towards farmers and small businesses, enabling them to export their products and services to foreign countries.
3. Correcting Imbalances in International Trade Processes
Businesses involved in imports and exports have been demanding the elimination of imbalances in the trade process for several years. The Foreign Trade Policy 2021-2026 is committed to minimising this disparity and providing small businesses with equal opportunities to conduct import and export operations.
Boosting the efficiency of the domestic manufacturing and service sector while also providing all the possible infrastructure support are some of the government’s measures in this regard. Ultimately, the new FTP will focus on building a more transparent and level playing field for all businesses.
Foreign Trade Policy 2021-2026: A Step Towards Building a More Prosperous Nation
The FTP 2021-2026 primarily focuses on making India a USD 5 trillion economy and the measures to help the country reach this pedestal. For a business aiming to take advantage of all the new initiatives and provisions, it is essential first to understand critical concepts like customs, international trade laws, and cross-border taxation.
A reputable advisory firm can work as an extended arm of your organization to help you take advantage of the new trade policy and get closer to your business goals.