CRUX+ Foreign Trade PDF

Relevance: GS 3 Crux+ Role of trade in India’s growth and FTP 2023 India has registered an increase in exports of goods and services from $ 535 billion in 2019-20 to $773 billion by 2022-23, which shows a cha...

Relevance: GS 3 Crux+ Role of trade in India’s growth and FTP 2023 India has registered an increase in exports of goods and services from $ 535 billion in 2019-20 to $773 billion by 2022-23, which shows a change of trend in growth prospects of India. REASONS  High growth in engineering goods exports, especially electronic exports  Policy of RoDTEP and ROSCTL which remits taxes paid by exporters and contributes to their working capital  NIRVIK, introduced to facilitate credit for exporters  Continuation of schemes like EXIM scrip and EPCG to assure subsidy to exporters  Improved port infrastructure and reduced compliance burden, like 18 ports in India can now give 24×7 online clearance.  better targeting of markets  high agricultural exports, recorded above 50 billion  Very large increase in services exports backed by IR, consultancy and Shipping  Free trade agreements with UAE and Australia have increased exports to these destinations  High price of oil and metals also contributed to high exports value CHALLENGES  Deglobalising world and rising protectionism  Inefficiency in manufacturing  Lack of diversified markets  Lack of diversified export basket  Bureaucratic restrictions on ports  High logistical cost  Overvalued currency  Inverted duty structure WAY FORWARD  Implementation of input market reforms like labor law and land acquisition  Promotion of diversified markets like east Asia, Pacific, west Asia etc  improved infrastructure to reduce logistical cost  keeping real exchange rate stable  giving marketing facilities specially through e commerce to exporters. A robust exports sector has scope of creating high growth for India which should target 5% global market share from current 2%. IAS Exam Congress Mains-2023 Relevance: GS 3 Crux+ Foreign Trade Policy 2023 FTP-2023 Replaces the Foreign Trade Policy 2015. It lays out clear roles for different stakeholders and lays out a vision for India’s foreign trade Target: increase India’s exports from present $750–760 billion to $2 trillion by 2030. Need for the policy: A clearly demarcated FTP is required for promoting exports through collaboration, ease of doing business, identifying potential areas of trade relations and beneficial integration into the global economy. Features of FTP-2023:  The new policy will have no sunset date (ending date) and will be tweaked based on the emerging world trade scenario and industry feedback.  While the policy will be open-ended, the schemes sanctioned under it will be time bound.  It focuses on internationalisation of trade in Rupees PILLAR#1: INCENTIVE TO REMISSION  Remission of Duties and Taxes on Exported Products (RODTEP) to provide refunds to exporters for various taxes paid on inputs  Export Promotion capital Goods (EPCG) Scheme: 0% Customs duty import of capital goods (machinery) for export production. o FTP2023: Will give some extra benefits to Textile factories in PM MITRA Parks, Dairy, Green Hydrogen, Battery Electric Vehicles etc.  Advance Authorisation Scheme (AAS): 0% customs on import of raw materials for manufacturing export items PILLAR#2: EASE OF DOING BIZ  One-time Amnesty Scheme on Default on Export Obligations  Our policy is based on principles of ‘trust’ and ‘partnership’ with exporters.  We’ll take feedback from Industry to update FTP, from time to time.  National Committee on Trade Facilitation (NCTF): To facilitate coordination and implementation of WTO’s Trade Facilitation Agreement (TFA).  Niryat Bandhu: Being implemented for mentoring new and potential exporters  e-Certificate of Origin (e-CoO)  Online facility to file Quality Control and Trade Disputes (QCTD).  24x7 Customs clearance in 20 seaports and 17 Airports IAS Exam Congress Mains-2023 Relevance: GS 3 Crux+ PILLAR3: EMERGING AREAS  Promote SCOMET & Dual use Export o SCOMET: “Special Chemicals, Organism, Materials, Equipment and Technologies” items are dual-use items having the potential for both civilian applications as well as weapons of mass destruction.  E-Commerce Exports o Promoting Cross Border Trade in Digital Economy o Niryat Bandhu Scheme (NBS) shall have a component for the promotion of e- Commerce and other emerging channels of exports. o Dak Ghar Niryat Kendras shall be operationalised throughout the country to work in a hub-and-spoke model with Foreign Post Offices (FPOs) to facilitate cross-border e- Commerce. o Integration of Courier and Postal exporters with ICEGATE portal of CBIC o Outreach and training activities for rural artisans, weavers, to help them export via E- Commerce platforms  Merchanting trade @Gift City o Buying goods from one country and then selling them to a buyer in another country without bringing the goods into their own country. o Merchanting trade of restricted and prohibited items under export policy would now be possible PILLAR4: COLLABORATION OF STAKEHOLDERS  We’ll develop Districts as Export Hubs (DEH). With help of One District One Product (ODOP) schemes.  Four new towns designated as Towns of Export Excellence (TEE), in addition to the existing 39 towns.  Indian mission/embassy abroad will be given funding under Market Access Initiative (MAI) to do research/survey of Country specific customer likes/dislikes/product preferences  Exporters will be given Star rating/Status based on export performance  2Star/higher exporters will give training/mentoring to new/fresh exporters. Significance of FTP:  Increases revenue through exports and stimulates economic growth  Encourages exports and attracts foreign investment  Facilitates export promotion at the regional level  Reduces transaction costs and simplifies export processes  It facilitates the flow of the economy in a country and increases foreign exchange in a country.  It aids in facilitating free trade and liberalization and improving the overall market for domestic consumers of a country IAS Exam Congress Mains-2023