Foreign Trade Policy (FTP) 2023

A Foreign Trade Policy (FTP) 2023 guides the principles for accelerating and simplifying India’s export process, making it more responsive to the needs of exporters. Unlike the earlier approach that focused on incentives, this policy emphasizes trade facilitation, technology, partnerships, and ease of doing business.

The policy promotes a trust-based partnership with exporters, reduces transaction costs, while also aiming to harness opportunities such as e-commerce exports, district exports, and green technologies to promote greater adoption of technology-enabled processes.

What Is Foreign Trade Policy (FTP) 2023?

FTP 2023 is India’s framework for promoting exports and facilitating international trade. A key feature of the policy is its shift from an incentive-driven approach towards a facilitation-oriented approach.

The policy focuses on:

• Process re-engineering and automation
• Ease of doing business
• Reduction in transaction costs
• Export promotion through collaboration
• Technology-driven trade procedures
• E-commerce exports
• Districts as Export Hubs
• Streamlining the SCOMET policy

It also seeks to encourage greater use of the Indian rupee in cross-border trade.

Four Pillars of FTP 2023

The approach of FTP 2023 can broadly be understood through four pillars.

1. Incentive to Remission

The policy focuses on the remission of duties and taxes rather than relying primarily on traditional export incentives.

2. Export Promotion through Collaboration

Export promotion is treated as a shared effort involving exporters, States, districts and Indian Missions abroad.

3. Ease of Doing Business

The policy seeks to reduce transaction costs, simplify procedures and expand digital and technology-based initiatives.

4. Emerging Areas

Greater attention is given to e-commerce, Districts as Export Hubs and SCOMET reforms, reflecting changes in the global trading environment.

Export Targets under FTP 2023

FTP 2023 sets an ambitious target of increasing India’s overall exports to US$2 trillion by 2030.

The target envisages roughly equal contributions from:

• Merchandise exports
• Services exports

Another important objective is to encourage the use of the Indian rupee in international trade. This is supported by the payment-settlement framework introduced by the RBI in July 2022.

Greater use of the rupee can be particularly useful in trade relationships with countries where India has a trade surplus.

Major Features of FTP 2023

Process Re-engineering and Automation

FTP 2023 tries to make exporting less dependent on paperwork and manual processes. The emphasis is on technology-based systems, simpler procedures and faster processing.

1. Digital Processing: Greater use of digital systems is intended to make applications and approvals faster and more convenient.
2. Lower Costs: Reduction in fee structures and IT-based schemes can make export benefits more accessible, especially for MSMEs.
3. Rule-Based Implementation: Duty exemption schemes for export production are implemented through Regional Offices using an IT-based, rule-based system, reducing the need for manual interaction.

Towns of Export Excellence (TEE)

The Towns of Export Excellence (TEE) initiative aims to strengthen towns that already have a significant export base and help them become stronger export centres.

Four new towns were added under FTP 2023:

• Faridabad
• Mirzapur
• Moradabad
• Varanasi

These were added to the existing 39 Towns of Export Excellence.

TEE towns receive priority access to export-promotion funds under the Market Access Initiative (MAI). They can also use Common Service Provider (CSP) benefits for export fulfilment under the Export Promotion Capital Goods (EPCG) Scheme.

Recognition and Capacity Building of Exporters

FTP 2023 gives recognised exporters a greater role in strengthening India’s export ecosystem.

1. Capacity Building: Exporter firms with recognised status can participate in capacity-building initiatives on a best-endeavour basis.
2. Training by Experienced Exporters: 2-star and above status holders are encouraged to provide trade-related training to interested individuals based on a model curriculum.
3. Wider Recognition: Status-recognition norms have been recalibrated to allow more exporting firms to achieve 4-star and 5-star status, which can improve their branding opportunities in international markets.

Districts as Export Hubs

FTP 2023 takes export promotion beyond major industrial centres through the Districts as Export Hubs (DEH) initiative.

The basic idea is simple: districts often have products and services with export potential, but local infrastructure, logistics or procedural problems can prevent them from reaching international markets.

The policy therefore seeks to identify export-worthy products and services and address their problems at the district level.

The institutional framework includes:

• State Export Promotion Committees
• District Export Promotion Committees

Each district is expected to prepare a district-specific export action plan outlining its strategy for promoting identified products and services.

Streamlining the SCOMET Policy

FTP 2023 gives greater importance to India’s export-control regime, particularly as India’s integration with countries following international export-control systems increases.

SCOMET stands for Special Chemicals, Organisms, Materials, Equipment and Technologies.

The policy seeks to improve awareness of SCOMET among stakeholders and strengthen India’s ability to implement relevant international treaties and agreements.

A stronger export-control system can also help Indian exporters gain access to dual-use high-end goods and technologies, while facilitating the controlled export of items covered under SCOMET.

Promoting E-Commerce Exports

E-commerce is emerging as an important opportunity for Indian exporters, particularly MSMEs and small businesses that may not have the resources to establish traditional overseas distribution networks.

FTP 2023 therefore provides a roadmap for developing e-commerce export hubs and addressing issues such as:

• Payment reconciliation
• Book-keeping
• Returns
• Export entitlements

Estimates cited in the policy suggest that India’s e-commerce export potential could reach US$200–300 billion by 2030.

As an initial measure, the consignment-wise limit for e-commerce exports through courier was increased from ₹5 lakh to ₹10 lakh. The limit could be revised further based on exporter feedback.

EPCG Scheme under FTP 2023

The Export Promotion Capital Goods (EPCG) Scheme allows eligible exporters to import capital goods at zero customs duty for export production, subject to applicable export obligations.

FTP 2023 introduced measures to make the scheme more flexible and support technological and green investments.

1. PM MITRA Parks: The Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme was added as an eligible scheme for benefits under the Common Service Provider framework of EPCG.
2. Dairy Sector: The dairy sector was exempted from maintaining the Average Export Obligation, helping the sector upgrade its technology.
3. Green Technologies: Battery Electric Vehicles (BEVs), vertical farming equipment, wastewater treatment and recycling systems, rainwater harvesting systems and green hydrogen were included in the green-technology category eligible for reduced export-obligation requirements under EPCG.

Advance Authorisation Scheme

The Advance Authorisation Scheme allows eligible domestic tariff area units to import raw materials duty-free for manufacturing goods meant for export.

FTP 2023 introduced additional facilitation measures under the scheme.

1. Apparel and Clothing: The Special Advance Authorisation Scheme was extended to the apparel and clothing sector on a self-declaration basis to enable faster execution of export orders.
2. Self-Ratification: The Self-Ratification Scheme for fixation of Input-Output Norms was extended to 2-star and above status holders, in addition to Authorised Economic Operators.

Amnesty Scheme under FTP 2023

FTP 2023 introduced an Amnesty Scheme to help exporters settle pending defaults related to export obligations.

1. Online Registration: An online portal was proposed for exporters to register under the scheme.
2. Six-Month Window: Exporters were given a six-month period to take advantage of the scheme.
3. Pending Defaults: The scheme covers pending cases involving default in export obligations under authorisations.
4. Regularisation: Such defaults can be regularised through payment of the customs duties exempted, in proportion to the unfulfilled export obligation.

How Is FTP 2023 Different from the Previous Trade Policy?

The earlier Foreign Trade Policy 2015–2020 had originally targeted exports of US$900 billion by 2020. Its validity was subsequently extended for three years until March 2023.

India’s total exports were expected to reach around US$760–770 billion in 2022–23, compared with approximately US$676 billion in 2021–22, according to the source material.

FTP 2023 represents a shift towards a more dynamic, digital and facilitation-oriented trade framework. Rather than focusing only on export incentives, it tries to address the practical problems exporters face, from application procedures and logistics to district-level infrastructure and access to international markets.

Why Is FTP 2023 Important for India?

FTP 2023 is important because India’s export growth depends not only on financial support but also on how easily businesses can participate in global trade.

The policy attempts to make the export ecosystem more accessible to MSMEs, district-level producers and new-age businesses, while also encouraging e-commerce and green technologies.

Its emphasis on digitalisation, lower transaction costs, district-level export promotion and greater use of the rupee reflects an effort to make India’s exports more competitive and better integrated with global markets.

FAQs on Foreign Trade Policy 2023

What is FTP 2023?

Foreign Trade Policy 2023 is India’s framework for promoting exports and making international trade easier through simplified procedures, digitalisation and export facilitation.

What is India’s export target under FTP 2023?

The policy aims to increase India’s overall exports to US$2 trillion by 2030, with merchandise and services expected to contribute roughly equally.

What are the four pillars of FTP 2023?

The four pillars are incentive to remission, collaborative export promotion, ease of doing business, and emerging areas such as e-commerce and Districts as Export Hubs.

What are Towns of Export Excellence?

TEE are towns with significant export potential that receive support to strengthen their export infrastructure and competitiveness.

What is Districts as Export Hubs?

The Districts as Export Hubs initiative seeks to identify products and services with export potential at the district level and develop specific strategies to promote them.

What is SCOMET?

SCOMET is India’s framework for regulating the export of specified sensitive and dual-use items, including special chemicals, organisms, materials, equipment and technologies.

What is the e-commerce export limit under FTP 2023?

The consignment-wise limit for e-commerce exports through courier was increased from ₹5 lakh to ₹10 lakh.

What is the FTP 2023 Amnesty Scheme?

It provides exporters with a mechanism to regularise pending defaults in export obligations by paying applicable customs duties in proportion to the unfulfilled obligation.