NEW DELHI: India finally has a new foreign trade policy three years after the last FTP expired. The new policy that kicks in from April 1, 2023, moves away from the erstwhile five-year cycle to have a more ‘dynamic’ approach to policy making.
With the goal of achieving $2 trillion in exports by 2030, the trade policy focuses on key areas like e-commerce exports, merchanting trade reforms and district-level engagement with stakeholders. Unveiling the new trade policy, Minister of Commerce and Industry Piyush Goyal expressed confidence that the new trade policy will help in achieving the goal of $2 trillion in exports by 2030.
The government has set a goal of achieving $1 trillion in exports each in goods and services by 2030. The minister also expressed his satisfaction that Indian exports have been able to exceed the $750 billion goal in 2022-23. “We may even touch $770 billion in FY23,” said the minister.
One of the focus areas of the new trade policy is to work towards making the Indian rupee a global currency and facilitating international trade in the Indian currency. The benefits of the new trade policy will be extended to rupee realization through special Vostro accounts. It aims to make India an e-commerce export hub through a slew of measures to streamline processes and improve the ease of doing business.
The FTP announces increasing the value limit for export through courier from Rs 5 lakh to Rs 10 lakh. The commerce ministry officials say, if needed, the limit will be completely removed. The FTP also envisages notifying designated hubs with warehousing facilities to help e-commerce aggregators for easy stocking, customs clearance and return processing.
With these measures, the government believes that e-commerce exports, which are at a meagre $7.7.5 billion, will reach $200-300 billion by 2030. The new policy unveils merchanting trade reforms making it easier for Indian intermediaries to ship goods from one foreign country to another without touching Indian ports.
The policy announces Rs 56,027 crore amnesty scheme for payment of accumulated arrears under various export incentive schemes between 2009-14. Then there are other measures like the continuation of advance authorisations and EPCG ((Export Promotion Capital Goods), reduction in fees for MSMEs under EPCG, reduction in the threshold for star houses, etc. Unveiling the policy, commerce secretary Sunil Barthwal said the new policy has decided to do away with the sunset clause of five years, and that there is no end date to the policy.
Key Points
Key changes from today
A new tax regime and new tax slabs
The new income tax regime will become the default tax regime. However, taxpayers will have the option to choose an old regime
The new income tax slabs come into effect from April 1
Individuals going for the new income tax regime and having income up to Rs 7 lakh will not pay any taxes
Debt mutual funds to lose tax advantage
Investments in debt mutual funds, with less than 35% investment in equity shares, will be taxed as per the relevant tax slab
TDS on online gaming
Tax deducted at source (TDS) on online gaming applications will be effective from today
Tax on insurance
If the premium paid by an individual for a savings life policy (excluding ULIPS) is more than `5 lakh, then the income from the policy on maturity will be taxed
Tax exemption up to Rs 25 lakh on leave encashment
Tax exemption limit on leave encashment on the retirement of non-government salaried employees to be raised to Rs 25 lakh from Rs 3 lakh
End of special FD schemes of banks
Many banks, including SBI, HDFC Bank, IDBI Bank, and Indian Bank were offering special FDs with higher interest rates for senior citizens. Banks will end such FDs on March 31
Higher interest on small savings
The government has hiked interest rates of small savings schemes by up to 70 bps for April-June 2023 quarter