A review: India’s Foreign Trade Policy From 2015-2020

A review: India’s Foreign Trade Policy – India, as we all know is a nation which is not just known for its diversity, but also for its huge resources, both human and natural. After its independence, the entire world had eyes on India with their nefarious vision in order to exploit the nation as a whole.

However, soon India became a closed economy, thinking that the resources within the country are enough to fetch for the needs arising within the nation. However, things took a U-Turn and India had to face a lot of repercussions as the Balance of Payment (BoP) shifted more to the expenditure side (liabilities) than the income side (assets) which made it hard for the nation to fetch for the needs of its people. Hence, in the year 1991, NEP (New Economic Policy) was unveiled which focused on 3 pillars termed as ‘LPG’. Now this LPG stands for ‘Liberalization, Privatization, and Globalization.’

This NEP 1991 changed the course of the businesses in India, with the coming of more and more private companies and the Privatization of various sectors, India soon transformed into one of the growing economies not just in South Asia, but in the world. The readers must have got an idea of the article and would now be able to connect the title of the article with the content in this article. With the medium of this article, we will go through answering some of the important questions which include the meaning of the Foreign Trade Policy (FTP), the components of FTP, and then the review of the Indian FTP from the year 2015-2020.

What is Foreign Trade Policy and what is its structure?

Now to understand the Foreign Trade Policy which was flagged off in the year 2015 by the Modi government, it is essential to understand the foreign trade concept. Foreign Trade refers to the exchange of goods and services with the monetary value of the particular goods and services at the international level by the countries involved in such trade on grounds of any kind of agreement they have entered into.

When we come at the Foreign Trade, two terms play a vital role in this, them being ‘import’ and ‘export’. While the term import means buying of goods and services from any other nation, the term export means exactly the opposite which means selling of goods and services produced and manufactured in the home nation. And the structure also revolves around the Import, Export, and the EXIM (Export-Import) Policy of the nation and the Balance of Payment (BoP).

India’s Foreign Trade Policy for the year 2015-2020

The Foreign Trade Policy (FTP) 2015-20 was unveiled by Ms. Nirmala Sitharaman, Minister of State for Commerce & Industry (Independent Charge), Government of India on April 1, 2015. Following are the highlights of the FTP:

• FTP 2015-20 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’ program.
• The Policy aims 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.
• FTP 2015-20 introduces two new schemes, namely ‘Merchandise Exports from India Scheme (MEIS)’ for export of specified goods to specified markets and ‘Services Exports from India Scheme (SEIS)’ for increasing exports of notified services.
• Duty credit scrips issue under MEIS and SEIS and the goods import against these scrips are fully transferable.
• For grant of rewards under MEIS, the countries have categorized into 3 Groups. Whereas the rates of rewards under MEIS range from 2 percent to 5 percent. Under SEIS the select Services would rewarded at the rates of 3 percent and 5 percent.

Measures

• The Measures have adopt to nudge procurement of capital goods from indigenous manufacturers under the EPCG scheme. By reducing specific export obligations to 75per cent of the normal export obligation.
• Measures have taken to give a boost to exports of defense and hi-tech items.
• E-Commerce exports of handloom products, books/periodicals, leather footwear, toys, and customize fashion garments. Through courier or foreign post office would also be able to get the benefit of MEIS. (for values up to INR 25,000).
• Manufacturers, who are also status holders, will now be able to self-certify their manufactured goods in phases. As originating from India with a view to qualifying for preferential treatment. Under various forms of bilateral and regional trade agreements. This ‘Approved Exporter System’ will help manufacturer exporters considerably in getting fast access to international markets.
• A number of steps have taken for encouraging manufacturing and exports under 100 percent EOU/EHTP/STPI/BTP Schemes. The steps include a fast track clearance facility for these units, permitting them to share infrastructure facilities. Permitting inter-unit transfer of goods and services, permitting them to set up warehouses. Near the port of export, and using duty-free equipment for training purposes.
• 108 MSME clusters have identify for focused interventions to boost exports. Accordingly, the ‘Niryat Bandhu Scheme’ has galvanized and repositioned to achieve the objectives of ‘Skill India’.
• Trade facilitation and enhancing the ease of doing business are the other major focus areas in this new FTP. One of the major objectives of the new FTP is to move towards paperless working in a 24×7 environment.[1]

Analysis of the Foreign Trade Policy for the year 2015-2020

A review: India’s Foreign Trade Policy

The FTP for the year 2015-2020 had a lot of plans for the development of India’s growth. With respect to trade and services at the international level. But at the very same time, the central government of India also ensure that the development of the country is not hamper. And the objective of the ‘Make in India’ program is achieved.

The ‘Make in India’ program by the government of India focuses on the Multi-National Companies from around the world. To focus their plants and manufacturing and industrial unit(s). So, that the products are produce and manufactured in India with the employment guarantee for the labor India. This also meant that the technology from the foreign nations. Enters the boundary of the nation and makes the nation technologically empowered. Furthermore, the policy drafted and presented in front of the entire world in such a fashion that the trade sector forms an integral and vital part of the GDP of the nation.

This policy saw the building up of 3 major schemes. The ‘Niryat Bandhu Scheme’, ‘Merchandise Exports From India Scheme’ (MEIS), and then the ‘Services Exports from India Scheme’ (SEIS). Speaking of the Niryat Bandhu Scheme, the scheme galvanize in such a manner that it enhances the objectives of the ‘Skill India’ program. In order to tackle the issue of the lack of access to the international market(s). A rather new scheme introduced termed as ‘Approved Exporter System’. In order to get quick and fast access to the international market.

Conclusion

A review: India’s Foreign Trade Policy

In conclusion, the FTP 2015-2020 drawn by the government of India stands at three major pillars, prima facie. The three pillars termed are the Make in India program. Making India a $ 5 Trillion Economy, and the Skill India Program. All these points and pillars made sure that the Indian Economy tops the chart. When it comes to achieving goals and leaving a map on the economic map of India.

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[1]Indian Brand Equity Foundation (IBEF)