Foreign trade policy: Exporters seek 3 months from Centre for transition

In case there is a change in the policy, the transition time in that case will help the exporter execute the contract, giving some certainty for the exporter

In the absence of a sunset clause in the new foreign trade policy (FTP), exporters have urged the government to allow a three-month transition period before coming up with any major changes in the policy.

In a letter to the Commerce and Industry Minister Piyush Goyal, exporters' apex body Federation of Indian Export Organisations (FIEO) President A Sakthivel has sought the transition time so that existing contracts can be executed according to the existing FTP, rather than a new one, Business Standard has learnt.

For instance, going ahead, if at any point the government decides to discontinue or change any major export boosting scheme, such as the Remission of Duties or Taxes on Export Products (RoDTEP), an exporter would have factored the benefit of the scheme while deciding upon the contract. In case there is a change in the policy, the transition time, in that case, would help the exporter execute the contract, providing some certainty.

Typically, FTP has been a comprehensive five-year policy strategy to promote the export of goods and services. “But when there’s no end date for the FTP, it means that the policy can be changed at any given point of time, while also making it flexible,” an industry official said. 

On March 31, the government launched the new FTP, without any fixed timeline. This was mainly in the backdrop of fast-evolving global developments affecting international trade over the past few years, starting with Covid-19 in 2020, followed by the ongoing war between Russia and Ukraine that broke out last year. Government officials also said that the policy will be changed and updated as and when required, according to the needs of the trade. Officials also believe that with the general election just a year away, rolling out a new policy with a five-year or a fixed time frame may not have been the right strategy for the government. Besides, the five-year tenure of the FTP was in line with five-year plans, which no longer exist.

“The government has mentioned the direction in which the foreign trade policy will function rather than going into every minute detail. Even in the past, there were five-year plans under the Planning Commission that were done away with the restructuring of the commission to NITI Aayog. Similarly, the current foreign trade policy has also been launched in line with the changing times,” said Sabyasachi Ray, executive firector, Gems & Jewellery Export Promotion Council.