Foreign trade is the exchange of goods/services through International borders, It has great contribution in GDP of the country. The foreign trade consist of Import, Export and Re-Export. Importing is the purchasing of goods/services from outside the country. Exporting is the selling of goods/services outside the country. Re-Export is importing goods from outside country and exporting it in other country.
The foreign trade policy is the set of rules and regulations to promote the exports and trade business in any country. These policies are imposed on the importers and exporters by the Government and designed in such a way that it can promote the exports and restrict the imports.
The Foreign trade policy is prepared for five years, and Current foreign trade policy of IndiaFTP 2015-20 is extended for more one year due to Covid – 19 Pandemic. The FTP consist of export incentive schemes, Authorisations for import of raw materials and capital goods to manufacture the export goods.
The Government of India has implemented the following policies to promote the exports from the country –
Export Incentive for goods and services exporters:-
Government launched MEIS Scheme (Merchandise Exports from India Scheme) to promote the goods exports from the country, license issued under the scheme to provide the benefits on the eligible exports, which is also known as Duty Credit Scrip and can be used in payment of customs duty. SEIS Scheme launched under foreign trade policy 2015-20 to promote the service exports by providing the incentive in the form of scrips.
Authorisation for the import:-
Government launched Advance Authorisation Scheme to allow the duty free import of raw materials and other inputs required to manufacture the export goods with the condition of export obligation (EO) which needs to be fulfilled by the exporter in given time period, Under Advance Authorisation EO period is of 18 months.
Under EPCG Scheme Capital goods or machinery can be imported without paying customs duty for manufacturing of export goods.
Market Development Assistance Scheme:-
A Market Development Assistance Scheme (MDA) launched by the Government of India to promote the exports and to get into new International Market. It provide the opportunities to small exporters to enter into Global Market.
On 13th March 2020 Government launched RoDTEP Scheme which replaced MEIS Scheme to provide the incentive to the goods exporters.