The FTP 2023 is enacted by the Central Government under the authority of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992), effective from April 1, 2023, governing the export and import of goods and services. Amendments to the FTP can be made by the Central Government through public notifications in the interest of the public. The Director General of Foreign Trade (DGFT) is empowered to issue HandBook of Procedures (HBP), Appendices, and Aayat Niryat Forms (ANF) to guide exporters, importers, and relevant authorities in implementing the provisions of the FT (D&R) Act and related regulations.
Specific provisions outlined in the FTP or HBP take precedence over general provisions. Licenses, authorizations, certificates, scrips, or instruments providing fiscal benefits issued before the commencement of FTP 2023 remain valid unless otherwise specified.
Import and export policies specified in ITC (HS) Schedule I and Schedule II respectively govern the importability/ exportability of items based on the policy in effect at the time of import/export, defined by the date on the Bill of Lading or Shipping Bill. Changes in policy from ‘free’ to ‘restricted/prohibited/state trading’ do not affect imports/exports completed before the regulation date, except for High Sea sales.
Imports/exports after regulatory changes are allowed if backed by an Irrevocable Commercial Letter of Credit (ICLC) issued before the imposition of restrictions, subject to registration within 15 days of regulation. Policy changes for specific items apply prospectively from the date of notification, unless otherwise specified.
National Committee on Trade and Facilitation (NCTF)
India validated the World Trade Organization’s Trade Facilitation Agreement (TFA) in April 2016, establishing the National Committee on Trade Facilitation (NCTF) to oversee its implementation. The TFA focuses on four key pillars: transparency, which aims to improve access to accurate trade-related information; technology, promoting digital solutions to streamline processes and enhance efficiency; simplification of procedures and risk-based assessments to standardize and harmonize trade processes; and infrastructure augmentation, particularly in transport and logistics sectors, to support smoother trade flows and economic growth. These efforts collectively aim to reduce trade barriers, lower costs, and foster a more conducive environment for international trade, benefiting businesses, consumers, and the economy at large.
Promoting Seamless Export-Import Processes
DGFT is committed to facilitate exports and imports by emphasizing good governance through efficient, transparent, and accountable delivery systems. It collaborates with Export Promotion Councils and trade bodies to ensure smooth international trade operations.
Ease of export flow: Export consignments are assured unhindered passage without delays or interferences by any Central or State Government agency. In cases of uncertainty, authorities may request an undertaking from exporters and subsequently release the consignment. Export-related stocks cannot be seized unless there is clear evidence of serious irregularities, and any such seizure must be resolved within seven days unless the irregularities are proven.
Single Window for Perishable Agri-Products: To streamline export processes for perishable agricultural products, a single-window system is facilitated through the Agricultural and Processed Food Products Export Development Authority (APEDA).
The Niryat Bandhu Scheme: This is a hand holding scheme implemented by DGFT which focuses on mentoring new exporters through counseling, training, and outreach programs. It collaborates with industry and knowledge partners to foster vibrant District-Product-Market ecosystems under the ‘Districts as Export Hubs’ initiative.
E-initiatives
DGFT is playing a pivotal role in facilitating India’s international trade operations through its comprehensive online services and IT initiatives. Key functionalities include providing extensive export-import information, issuing the mandatory Importer Exporter Code (IEC) electronically, and managing processes related to Registration Cum Membership Certificate (RCMC) and Registration Certificate (RC) digitally.
DGFT’s digital platforms for e-Certificate of Origin (e-CoO) ensure the issuance of both Preferential and Non-Preferential Certificates with authentication features like Unique Document Identification Number (UDIN) and QR codes. It also oversees Quality Control and Trade Disputes (QCTD) resolutions and manages export proceeds through Electronic Bank Realization Certificate (e-BRC) and Export Data Processing and Monitoring System (EDPMS). DGFT’s IT initiatives focus on creating a paperless, contactless, and transparent environment to streamline export promotion schemes and enhance ease of doing business. Additionally, a dedicated 24×7 Helpdesk supports exporters in navigating online applications, while continuous efforts are made to enhance trade data collection, compilation, and dissemination across relevant portals.
Permission processing time before and after the establishment of e-portal
Source: DGFT
Customs Trade Facilitation
Central Board of Indirect Taxes and Customs (CBIC) has undertaken a series of initiatives aimed at improving trade facilitation across India. These include the introduction of round-the-clock customs clearance services at 20 sea ports, 17 airports, and extended facilities at Inland Container Depots (ICDs) to cater to varying trade needs. They have implemented a Single Window system in customs for streamlined document submission and launched E-Sanchit to foster a paperless clearance environment. The nationwide rollout of faceless e-assessment for imports enhances transparency and reduces physical interaction.
Additionally, CBIC has adopted electronic messaging systems for seamless communication from document clearance to cargo movement. They have promoted paperless customs operations by issuing electronic documents such as e-LEO SB and e-Gatepass/e-OOC. Contactless customs initiatives like Turant Suvidha Kendras (TKSs) further expedite processes, while the ICE-DASH dashboard provides monitoring and reporting tools to enhance ease of doing business.
Furthermore, initiatives like Direct Port Delivery (DPD) and Direct Port Entry (DPE) streamline import and export procedures directly from ports, reducing logistics delays. The Authorized Economic Operator (AEO) Programme, aligned with international standards under the WCO’s SAFE Framework, offers benefits such as secure supply chain management, reduced dwell times, and enhanced clearance privileges in partner countries through Mutual Recognition Agreements (MRAs).
These efforts collectively aim to simplify procedures, lower operational costs, and enhance the overall efficiency of customs operations in India, benefiting businesses and promoting international trade.
According to the findings of a study conducted by the EXIM Bank of India in 2023, fewer than 2% of India’s districts were responsible for over 41% of the country’s exports. This highlighted a substantial opportunity to focus on more districts that have not yet reached their full export potential . This led to the The One District One Product (ODOP) initiative that seeks to promote balanced regional development across India by selecting, branding, and promoting at least one unique product from each district. This strategy aims to foster comprehensive socioeconomic growth across all regions.
The initiative promotes and enhances export production centers in India by formally recognizing dynamic industrial clusters that significantly contribute to the country’s exports. Towns producing goods valued at Rs. 750 Crore or more annually, and Rs. 150 Crore or more in sectors like Handloom, Handicraft, Agriculture, and Fisheries, will be designated as Towns of Export Excellence (TEE).
Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been recognized as TEE, supplementing the 39 previously designated towns. These TEEs receive prioritized access to export promotion funds through the Market Access Initiative (MAI) scheme and will also qualify for Common Service Provider (CSP) benefits under the EPCG Scheme for export fulfillment.
New Towns added under TEE
The Status Holder Certification recognizes leading exporter firms in India for their exceptional contributions to foreign trade. Eligibility is based on achieving specific export thresholds over consecutive financial years, with criteria differing slightly for the Gems & Jewelry Sector. The threshold for minimum export has been reduced for each Status House Category. Now, the requirement to become a Five Star Status Holder has decreased from US$ 2 Billion to just US$ 800 million.
Double Weightage
Double Weightage is exclusively available for the One Star Export House status category and is not applicable to higher categories such as Two Star, Three Star, Four Star, or Five Star Export Houses. It is granted to exports by IEC holders falling into specific categories: Micro and Small Enterprises under the MSMED Act 2006, manufacturing units with ISO/BIS certification, units in North Eastern States including Sikkim, and Union Territories of Jammu & Kashmir and Ladakh, as well as exports of fruits and vegetables categorized under Chapters 7 and 8 of ITC HS. Each merchandise shipment or service can receive double weightage only once across these eligible categories.
Privileges
Status Holders under the Foreign Trade Policy benefit from a range of privileges aimed at facilitating their export operations and enhancing competitiveness. They can obtain Authorisation and Customs Clearances for imports and exports on a self-declaration basis, and have Input-Output norms prioritized by the Norms Committee within 60 days. Exemptions include the need for Bank Guarantees under FTP schemes, and from mandatory document negotiations through banks, with all remittances and receipts conducted via banking channels. Two star and higher Export Houses can establish Export Warehouses per Department of Revenue guidelines. They also receive preferential treatment in handling consignments and can self-certify manufactured goods’ origin for preferential trade agreements. Additionally, they can export freely exportable items on a free-of-cost basis, subject to specified annual limits depending on the product category, with pharmaceutical exports enjoying higher limits for international health programs. These exports, however, do not qualify for Duty Drawback or other export incentives.
Duty-Free Entitlement for select Sectors
In order to promote employment opportunities, special initiatives have been introduced for the Marine Products and Sports Goods & Toys sectors. These initiatives provide duty-free entitlements, with exemption limited to basic customs duty as per applicable Customs Notifications.
For the marine sector, this includes duty-free import of specified specialized inputs, chemicals, and flavoring oils, not exceeding 1% of the Free on Board (FOB) value of seafood exports in the previous financial year. Similarly, the Sports Goods and Toys sector benefits from duty-free import of specified inputs, not exceeding 3% of the FOB value of sports goods exports in the preceding financial year. For further details, interested parties are advised to consult the relevant Customs Notifications pertaining to these provisions.
Skilling and Mentorship
To enhance the trade ecosystem and promote skilling opportunities, Status Holders are designated as partners in providing mentoring and training in international trade. They commit to offering skill upgradation and training programs annually, with quotas determined by their status level:
(i) Two Star Export Houses aim to train 5 individuals per year,
(ii) Three Star Export Houses 10,
(iii) Four Star Export Houses 20,
(iv) Five Star Export Houses 50
One-Time Amnesty Scheme
The government introduced a special one-time Amnesty Program aimed at resolving issues of non-compliance concerning Export Obligations by holders of Advance Authorization and EPCG authorizations. This initiative is part of the broader “Vivaad se Vishwaas” campaign, which seeks to amicably settle tax disputes.
The scheme allowed EPCG authorisation holders to regularize pending cases of default in meeting export obligations by paying all customs duties that were exempted proportionately to the unfulfilled export obligation, along with 100 percent interest on such exempted duties. This initiative was a part of efforts to streamline and resolve outstanding issues in the export sector, facilitating compliance and boosting transparency in trade-related transactions.
The government has successfully recovered approximately Rs 852 crore under the scheme. An official disclosed that a total of 6,705 applications were filed under this scheme. As per provisional data, the recovered amount stands at around Rs 852 crore, with expectations of further increase as data compilation continues.
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