Government to release new foreign trade policy

23 August 2022, Mumbai

The government plans to release the new foreign trade policy next month. Focusing on boosting e-commerce exports and developing districts as export hubs, the policy may highlight ways to reduce the compliance burden on small exporters and fund MSMEs to increase exports.

It may also seek to make proper categorization of products that are at present clubbed as "others", as this system leads to misclassification and tax evasion, thereby adding to the growing trade deficit.

The policy comes amid India’s export growth slowing. Goods exports rose 2.14 percent from a year earlier to $36.27 billion in July, even as the trade deficit almost tripled to $30 billion. In fiscal 2022, India's outbound shipments were a record $421.8 billion. The government aims to take the value to $1 trillion by 2030.

Exporters have sought a separate chapter on e-commerce in the policy that would enlist all the export benefits available to the sector that should be at par with conventional exports.

Ajay Sahai, Director General, Federation of Indian Export Organization (FIEO) has recommended setting up an integrated park for cross-border e-commerce.

Such parks should provide comprehensive facilities such as banks, fintech companies, foreign post offices, courier terminals, logistics companies, warehouses, customs, and tax refunds - all under a single umbrella. Also, some space can be earmarked for packaging and small operations.

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