India’s long-delayed, refreshed Foreign Trade Policy has finally been unveiled. The new policy, announced on Friday by the Union Minister for Commerce, Industry and Textiles Piyush Goyal, has made bold to set an ambitious target of reaching $2 trillion in total exports (goods and services combined) by 2030. With the government currently estimating exports to have crossed $760 billion in the fiscal year just ended on March 31, the policy projects a near tripling in outbound shipments of goods and services over the course of seven years. And when one compares this growth goal with the 75% expansion achieved over the last seven years since 2016, the magnitude of the aspiration suggests vaulting ambition. To be sure, the last three years have been unprecedented, with first the COVID-19 pandemic and then Russia’s invasion of Ukraine disrupting global trade momentum. Still, the last three years, when India put its trade policy reset on hold, also provided policymakers a unique opportunity to take a fresh approach to delineating the contours of its trade policy goals. The end result is long on statements of intent. The National Trade Facilitation Action Plan, for instance, lists aims to achieve that are essential and laudable but in no way novel: an improvement in the ease of doing business through reduction in transaction cost and time, a reduction in cargo release time, and a paperless regulatory environment.
In a nod to India’s WTO obligations, the shift from incentives to an enabling regime of duty remission and exemption schemes to facilitate duty-free imports of inputs required for boosting exports has been near complete. Most of these schemes including the RoDTEP (Remission of Duties and Taxes on Exported Products), RoSCTL (Rebate on State and Central Taxes and Levies), AA (Advance Authorisation) and EPCG (Export Promotion Capital Goods) have been around for a while and the policy has just tweaked some of the terms of implementation to improve adoption. In the key sector of apparel and clothing, for instance, the facility of self-declaration has now been offered across the board to all exporters. A one-time amnesty has also been offered, giving exporters more time to avail of both the AA and EPCG schemes. And acknowledging the substantial surge in online trade, the policy devotes a whole chapter to ‘Promoting Cross Border Trade in Digital Economy’ including moves to facilitate the establishment of dedicated e-commerce export hubs. Still, with global trade largely becalmed and the services sector facing headwinds of uncertainty in the key western markets, the FTP falls short in offering more substantive and sectorally targeted measures as well as a well-defined road map to meet the 2030 export target.