Definition: A set of guidelines and instructions established by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry, Government of India, to promote and regulate India's foreign trade.
Primary Goal: To enhance India's export competitiveness, facilitate essential imports, and integrate India into the global trading system.
Key Objectives:
Boost India's exports and achieve a higher share in global trade.
Create employment opportunities and support the 'Make in India' initiative.
Promote ease of doing business for exporters and importers.
Diversify export markets and products.
Exam Tip: FTP is announced by the Ministry of Commerce & Industry, and implemented by DGFT. Remember this distinction.
Key Schemes & Incentives under FTP (Historical & Current)
RoDTEP (Remission of Duties and Taxes on Exported Products):
Current Scheme: Replaced MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme).
Objective: To refund embedded central, state, and local duties/taxes (e.g., VAT on fuel, electricity duty, mandi tax) that are not rebated under any other mechanism.
Mechanism: Duty credit scrips issued, transferable, used to pay basic customs duty.
Advance Authorisation Scheme: Allows duty-free import of inputs required for export production, with a mandatory export obligation.
EPCG (Export Promotion Capital Goods) Scheme: Allows import of capital goods at zero customs duty for export production, requiring an export obligation (6 times duties saved over 6 years).
Status Holder Scheme: Recognizes exporters based on performance, granting special privileges and simplified procedures.
Memory Aid for Key Schemes:Really Advanced Exporters Succeed.
RoDTEP
Advance Authorisation
EPCG
Status Holder
Foreign Trade Policy 2023 - Salient Features & Shifts
Duration: Open-ended policy, without a fixed end date, allowing for dynamic updates based on global trade dynamics.
Key Shift: From an incentive-based regime (like MEIS/SEIS) to a remission and facilitation-based regime (like RoDTEP).
Four Pillars of FTP 2023:
Incentive to Remission: Shifting focus from incentives to remission of taxes/duties.
Export Promotion through Collaboration: Engaging with states, districts, and Indian missions abroad.
Ease of Doing Business: Reducing transaction costs and time through process re-engineering and automation.
Emerging Areas: Promoting e-commerce exports and streamlining SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) policy.
District as Export Hubs: Promoting exports from districts by identifying export-worthy products and services.
e-Commerce Exports: Facilitating cross-border e-commerce, with provisions for higher consignment values.
High-Yield Fact: FTP 2023 was launched on 31st March 2023 and came into effect from 1st April 2023. Its open-ended nature is a significant departure from previous 5-year policies.
Important Comparisons & Landmark Facts
Feature
MEIS/SEIS (Previous)
RoDTEP (Current)
Nature
Incentive/Reward Scheme
Remission of embedded taxes/duties
WTO Compliance
Challenged at WTO (deemed export subsidy)
WTO-compliant (refund of taxes, not a subsidy)
Coverage
Merchandise/Service exports
All sectors (except few excluded)
Benefit Basis
Percentage of FOB value
Based on actual incidence of taxes/duties
Balance of Trade: Difference between a country's exports and imports of goods.
Balance of Payments (BoP): A record of all economic transactions between residents of a country and the rest of the world over a period.
Current Account Deficit (CAD): Occurs when a country's total value of imports of goods, services, and transfers is greater than its total value of exports.
Exam Focus: Understand why RoDTEP replaced MEIS/SEIS – primarily due to WTO compliance issues. This is a frequently tested concept.
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High-Yield Revision Points
Review these essential summary takeaways right before your examination:
📌 Focus on foundational definitions, statutory provisions, and landmark dates related to Foreign Trade Policy.
📌 Compare key differences and table classifications to eliminate incorrect options in preliminary MCQs.
📌 Regularly revise mnemonics and memory keywords to recall complex facts under timed test conditions.
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