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Based on India's Foreign Trade Policy (FTP) 2023 and other government initiatives, the government provides a range of incentives to boost exports, foster a supportive trade environment, and increase overall international trade. These policies emphasize shifting from an incentive-based model to a remission-based and technologically-driven one to enhance ease of doing business.

Foreign Trade Policy (FTP) 2023

The current FTP, launched in April 2023, is dynamic and has no fixed end date, allowing it to be adapted as global trade circumstances change. It focuses on four main pillars:

  • Incentive to Remission: Moving from traditional export incentives to schemes that reimburse taxes and duties on exported products. This makes exports more competitive by effectively zero-rating them.
  • Export Promotion through Collaboration: Building partnerships between exporters, state governments, district administrations, and Indian diplomatic missions abroad to boost exports at the grassroots level.
  • Ease of Doing Business: Reducing transaction costs and time by using automation, online approvals, and paperless filing for all trade-related processes.
  • Emerging Areas: Supporting the growth of e-commerce exports and simplifying regulations for the export of high-end, dual-use technology.

Key government incentives and schemes

  • Remission of Duties and Taxes on Exported Products (RoDTEP): This scheme refunds various central, state, and local taxes, duties, and levies that were not previously remitted under other schemes. It is compliant with WTO regulations and aims to remove the tax burden from exported goods.
  • Rebate of State and Central Taxes and Levies (RoSCTL): Specifically for the apparel and made-up textile sectors, this scheme offers a rebate on embedded taxes like VAT on fuel, electricity duty, and mandi tax to enhance competitiveness.
  • Export Promotion Capital Goods (EPCG) Scheme: Allows exporters to import capital goods (machinery and equipment) at zero customs duty for the purpose of producing quality goods for export. It comes with an export obligation and is now rationalized to benefit more sectors, including green technologies and dairy.
  • Advance Authorisation Scheme (AA): Permits the duty-free import of raw materials, fuel, and catalysts used to manufacture products that are meant for export. The scheme requires a minimum value addition to the final product.
  • Market Access Initiative (MAI): Provides financial assistance for a wide range of export promotion activities such as conducting market studies, participating in international trade fairs, and promoting Indian products abroad.
  • Districts as Export Hubs (DEH): This initiative identifies products with export potential in each district and helps local manufacturers and artisans with support for branding, marketing, logistics, and resolving export bottlenecks.
  • Niryat Rin Vikas Yojana (NIRVIK): A credit insurance scheme managed by the Export Credit Guarantee Corporation (ECGC) that provides higher insurance cover and a simplified claim process, particularly for MSMEs, to enhance their access to finance.
  • Production-Linked Incentive (PLI) Scheme: Encourages domestic manufacturing by offering financial incentives on incremental sales for products manufactured in India across key sectors like electronics, pharmaceuticals, and automobiles.
  • Special Economic Zones (SEZs): Designated areas that offer tax benefits, relaxed compliance norms, and single-window clearance for units focusing on exports and foreign investment.
  • International Trade Settlement in Indian Rupee: India is actively encouraging trade settlement in Indian Rupees to promote the internationalization of the currency and reduce exchange rate-related barriers.

 

krishna

Krishna is an experienced B2B blogger specializing in creating insightful and engaging content for businesses. With a keen understanding of industry trends and a talent for translating complex concepts into relatable narratives, Krishna helps companies build their brand, connect with their audience, and drive growth through compelling storytelling and strategic communication.

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