New Foreign Trade Policy 2021-2026 to be functional from 1st April , 2021 : Daily Current Affairs

New Foreign Trade Policy 2021-2026 to be functional from 1st April , 2021

In order to make New Foreign Trade Policy of india functional from 1st April , an important Meeting of the Parliamentary Consultative Committee of the Ministry of Commerce and Industry was held recently on the subject "New Foreign Trade Policy 2021-26". The New Foreign Trade Policy will come into effect from 1st April 2021 for a period of five years and will strive to make India a leader in the area of international trade and channelize the synergies gained through merchandise and services exports for growth and employment with a goal to make India a USD 5 Trillion economy. District Export Hubs initiative will form an important component of the new Foreign Trade Policy . The Department of Commerce through the Regional Authorities of DGFT has engaged with State / UT Governments to take forward this initiative in the districts and enable its implementation in a phased manner, with the objective of mobilizing the potential of each district of the country to achieve its potential as an export hub.

What is India's Foreign Trade Policy 2015-2020

The Foreign Trade Policy (2015-20), launched on 1st April 2015, provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in line with the ‘Make in India’, ‘Digital India’, ‘Skill India’, ‘Startup India’ and ‘Ease of Doing Business’ initiatives. The foreign trade policy Statement describes the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade eco system. It seeks to enable India to respond to the challenges of the external environment, keeping in step with a rapidly evolving international trading architecture and make trade a major contributor to the country’s economic growth and development.

Features of foreign trade policy 2015-2020 :

Merchandise Export from India Scheme (ME IS) and Service Exports from India Scheme (SEIS) launched. The 'Services Exports from India Scheme' (SEIS) is for increasing exports of notified services.
These schemes (MEIS and SEIS) replace multiple schemes earlier in place, each with different conditions for eligibility and usage. Incentives (MEIS & SEIS) to be available for SEZs also. E-Commerce of handicrafts, handlooms, books etc., eligible for benefits of MEIS.
Nomenclature of Export House, Star Export House, Trading House, Premier Trading House certificate changed to 1, 2, 3, 4, 5 Star Export House.
FTP to be aligned to 'Make in India', 'Digital India' and 'Skills India' initiatives.
Duty credit scrip’s made freely transferable and usable for payments of custom duty and service tax.
Export promotion mission to take on board state governments.
Agriculture and village industry products to be supported across the globe at rates of 3% and 5% under MEIS.
Two institutional mechanisms are being put in place for regular communication with stake holders- the board of trade and council for trade development (CTD) and promotion. While the board of trade will have an advisory role, the CTD would have representation from states and UT governments.
A new institution - Centre for Research in International Trade - is being established not only to strengthen India's research capabilities in the area of international trade, but also to enable developing countries to articulate their views and concerns from a well-informed position of strength.

Changes in Foreign Trade Policy in 2020 :

In March 2020 , The Union Commerce and Industry Ministry announced certain changes in the Foreign Trade Policy (FTP) of Government of India. The present Policy which came into force on 1st April, 2015, is for 5 years and has validity upto 31st March, 2020. In view of the unprecedented current situation arising out of the pandemic Novel COVID-19, the Govt. has decided to continue relief under various export promotion schemes by granting extension of the existing Foreign Trade Policy by another one year i.e. up to 31st March, 2021.

Salient points of the changes made in the FTP are as follows:

To provide continuity in the policy regime, the current FTP, valid till 31.03.2020 has been extended till 31.03.2021. Similar extension is made in the related procedures, by extending validity of Hand Book of Procedures.
Benefit under all the Export Promotion Schemes (except SEIS) and other schemes, available as on date, will continue to be available for another 12 months.Decision on continuation of SEIS will be taken and notified subsequently.
Similarly, validity period of the Status Holder Certificates is also extended. This will enable the Status Holders to continue to avail the specified facilities/benefits.
Exemption from payment of IGST and Compensation Cess on the imports made under Advance/EPCG Authorisations and by EOUs etc. has been extended up to 31.03.2021.
The scheme for providing “Transport Marketing Assistance on the specified Agricultural Products” is further extended for one year.
Validity period for making imports undervarious duty free import authorizations (AA/DFIA/EPCG) expiring between 01.02.2020 and 31.07.2020,has been allowed automatic extension for another six months from the date of expiry, without requirement of obtaining such endorsement on these authorizations.
Where ever the period to make export is expiring between 01.02.2020 and 31.07.2020 under various authorizations, automatic extension in the export obligation period is allowed for another six months from the date of expiry, without payment of any composition fee.