India has decided to extend its current Foreign Trade Policy (FTP) 2015-20 by six months in light of current economic turmoil. This happened after receiving feedback against disclosing any long-term strategy amid a volatile global situation, supply chain outages, currency depreciation, and shrinking export orders.
The current FTP, which was extended in April, was set to expire on September 30. Due to the pandemic and the lockdown imposed to stop its spread, the policy was initially extended for a year on March 31, 2020.
India’s Foreign Trade Policy
Commerce Secretary B.V.R. Subrahmanyam stated on September 3 that the government was preparing a new Foreign Trade Policy, which will be announced on September 30 as part of a package to boost goods exports, which had declined sequentially for the third consecutive month in August.
The Commerce and Industry Ministry has previously stated that the new FTP will be available by the end of this month. One of the officials who worked for the the Ministry stated,
“Many countries have restricted imports of luxury goods and non-essential items, many of them are insisting on paying in local currency, which is risky because depreciation of these currencies against the US dollar. Hence, the trade strategy needed to be reworked to reflect the current global reality,”
According to the commerce ministry statement, the decision to maintain the present Foreign Trade Policy (2015-20) was made in response to petitions from export promotion councils and prominent exporters.
“We will have to defer the release of the new policy. The existing policy will be continued,”
stated Amit Yadav, assistant secretary of the Department of Commerce.
He further stated that there were requests from industrial organizations and export promotion councils to extend the policy and postpone a new policy in this time of global uncertainty and currency volatility. There was also talk of coordinating the launch of the policy with the start of the new fiscal year. The DGFT will issue a notification on the extension.