What is Foreign Trade Policy- Part 2

Vision and objectives

In this age of globalisation, the government of India visioned the Foreign Trade Policy to improve its standing in international trade. Exports have to be boosted and imports need to be rationalized. The vision was to make India a leader in global trade. The Foreign Trade Policy would also build good relationships with neighbouring countries. Through the policy, India can also keep a watch on bad quality products by instilling quality checks. India will also increase market access in foreign trade. The policy has also recognized the importance of branding and therefore, has formulated policies under FTP to have branding campaigns in fields in which India has been immensely and traditionally strong. 

The FTP has also taken care of the digitalised world and has, therefore, digitized many procedures. For making the process simplified the number of documents required has also been reduced.  Measures have been included to facilitate new entrepreneurs to enter the market. Programmes for training new entrepreneurs have been undertaken. The FTP has also attempted to include the State Governments in its mission to become a leader in foreign trade. It should be a unified attempt of not only one department of the government but also the State Government. 

India’s Foreign Trade Policy has helped improve manufacturing, infrastructure, and India’s export competitiveness. It will also include the policies which will be the motive of the Government, ‘Digital India’, ‘Make in India’, ‘Skills India’. The main focus of the policy is on increasing the export and import of goods. The Central Government has taken a step to increase ‘ease of doing business’ in the country. 

The focus will remain on both service and the manufacturing sector. The Foreign Trade Policy wants to build a brand of India which is free of defects and has high-quality products. The products should be such that it can face international competition.

Highlights 

Anti-dumping 

Anti-dumping can be understood through an example. If let’s say, China has a huge production of steel but there is no demand for the steel then China would sell the steel at a price lower than the price it was being sold in their own country. This is called dumping. This is done so that the international market can be captured. For prevention of this, anti-dumping duty will be imposed on such transactions. Firstly, the Directorate General of Anti-Dumping and Allied Duties (DGAD) looks into the transaction and analyses if it is the case of dumping. If affirmative, it forwards the same to the Commerce Ministry which imposes Anti-Dumping tax under the Custom Tariff Act, 1975

Duty scrip schemes

Before the Foreign Trade Policy 2015-20, there were 5 different schemes in the country. The schemes included the Focus Product SchemeFocus Market SchemeMarket Linked Focus Product SchemeAgricultural Infrastructure Incentive SchemeVishesh Krishi. These schemes were abolished and under the policy, only 2 schemes have been maintained. Merchandise Export From India Scheme (for goods) and Service Exports from India Scheme (for services). 

Service Exports from India Exports Scheme (SEIS) and Merchandise Export from India Scheme (MEIS) 

SEIS 

Service Export from India Export Scheme (SEIS) is a scheme introduced under India’s Foreign Trade Policy to promote service exports. Under the scheme, the service providers will be awarded rewards for the service exports. 

MEIS 

The Merchandise Export from India Scheme (MEIS) has been introduced under the Foreign Policy to promote the export of merchandise which has been notified and is manufactured in India. Earlier there were different schemes to reward the export of goods, but MEIS has consolidated those rewards under one head. 

Conclusion 

India has efficiently formulated the Foreign Trade Policy to promote exports in the country. The Government in its policy has tried to increase the exports of those products which have a strong base in the domestic market. India is also trying to improve the export of other sectors. India has also been one of the most sought-after foreign investment destinations. The MEIS and SEIS are great initiatives to enhance the export of goods and services and has consolidated the various schemes which existed before. Around 70% of India’s exports constitute products that have just a 30% share in global trade

Aishwarya Says:

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