India’s new Foreign Trade Policy (FTP) 2023 was introduced by the Central government on Friday. It aims to increase exports to USD 2 trillion by 2030 and emphasises rupee-based international trade settlement.
Piyush Goyal, the minister of commerce and industry unveiled the FTP 2023, which will take affect on April 1. The Covid-19 pandemic and the unstable geopolitical environment caused the Foreign Trade Policy 2015–20, which was supposed to conclude in March 2020, to be extended. It was scheduled to end today.
International trade settlement in rupee is allowed under the new policy and changes introduced for the grant of export benefits and fulfillment of export obligation for export realizations in Indian currency as per RBI norms.The government has been working towards making the Indian rupee a global currency and allowing international trade settlement.
The RBI had last year put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in Indian currency. This mechanism will help in internationalizing the Indian currency in the long run. A currency can be termed international if it is widely accepted worldwide as a medium of exchange.
The Foreign Trade Policy 2023 being is aimed to provide policy continuity and a responsive framework.
Under the new policy, provisions for merchandising trade are also proposed. A merchandising transaction is one which involves the shipment of goods from one foreign country to another foreign country involving an Indian intermediary.