Indian ministry of commerce and industry: Year end review 2023
Foreign Trade Policy 2023
The Foreign Trade Policy 2023 (FTP 2023), unveiled on March 31, 2023, in New Delhi by Piyush Goyal, minister of commerce and industry, is a significant step towards enhancing India's export landscape. Its four fundamental pillars include incentives for remission, export promotion through comprehensive collaboration across various levels, simplification of business processes coupled with e-initiatives, and a focus on emerging areas such as e-commerce and high-end technology exports.
A key feature of FTP 2023 is its focus on modern sectors like e-commerce and the export of dual-use high-end technology items under the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) category. It also emphasises the development of districts as export hubs and streamlines the SCOMET policy. The policy introduces an Amnesty Scheme, allowing exporters to settle previous authorizations and start anew. Additionally, the Towns of Export Excellence Scheme and the Status Holder Scheme are innovative approaches to recognise and promote exports from new towns and established exporters.
The Directorate General of Foreign Trade (DGFT) under the ministry plays a pivotal role in implementing FTP 2023. A noteworthy initiative is the Advance Authorisation Scheme, facilitating duty-free import of inputs for export. The DGFT has also established a user-friendly database of Ad-hoc Norms to streamline the norms fixation process.
Another development was the launch of an automatic ‘Status Holder’ certificate issuance system on October 9, 2023. This move significantly reduces compliance burdens, promotes ease of doing business, and fosters internal governmental collaboration.
At the G20 Trade and Investment Ministerial Meeting held in Jaipur on August 24-25, 2023, under India's Presidency, the Ministerial reached a consensus on five concrete and action-oriented deliverables which have been adopted in the Outcome Document. These included the adoption of principles for digitalising trade documents, aimed at transitioning to paperless trade and enhancing cross-border data exchange. A special focus was placed on supporting micro, small, and medium enterprises (MSMEs) through the Jaipur Call for Action, which involves a plan to bridge informational gaps faced by these enterprises.
The ministers also endorsed a framework for mapping Global Value Chains (GVCs), focusing on their resilience and robustness. Additionally, there was an emphasis on sharing best practices for Mutual Recognition Agreements in professional services. The meeting concluded with the agreement to hold a G20 Standards Dialogue in 2023, aiming to reduce regulatory divergences and trade frictions, thereby facilitating smoother international trade and investment.
Prime Minister Narendra Modi dedicated to nation the International Exhibition-cum-Convention Centre (IECC) complex at Pragati Maidan in New Delhi on July 26, 2023. Prime Minister also unveiled the G-20 coin and G-20 stamp at the grand opening ceremony.
In 2023, India and the US significantly enhanced their trade relations. The 13th Ministerial-level meeting of the India-United States Trade Policy Forum in Washington, DC, on January 11, co-chaired by senior trade representatives, led to the formation of a Resilient Trade working group. This group focuses on strengthening global supply chain resilience, particularly in critical sectors. Throughout the year, India and the US resolved seven World Trade Organization disputes, with six settled during the Indian Prime Minister's June visit to the US and the final one during the US President's September visit to India for the G20 Summit.
In 2023, India and the UAE made significant progress in their economic partnership. The first meeting of the Joint Committee (JC) of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) took place in New Delhi on June 11-12. The JC reviewed bilateral trade under CEPA, operationalised various committees for effective monitoring, and agreed on exchanging preferential trade data quarterly. They also formed a sub-committee on Trade in Services and established the UAE-India CEPA Council (UICC) to enhance B2B collaboration, focusing on MSMEs and startups. Additionally, the 11th meeting of the UAE-India High Level Joint Task Force on Investments in Abu Dhabi on October 5, co-chaired by high-ranking officials, further strengthened investment ties, offering a platform to discuss opportunities and resolve investment issues.
Goyal interacted with 15 ambassadors from key African nations namely Algeria, Botswana, Egypt, Ghana, Republic of Guinea, Kenya, Malawi, Mozambique, Morocco, Rwanda, South Africa, Tanzania, Togo, Uganda and Zimbabwe on June 8, 2023, in New Delhi. It provided a unique platform for diplomatic representatives to engage in fruitful discussions, strengthen bilateral ties, and forge new partnerships for mutual growth and development. He addressed the 18th CII-EXIM Bank Conclave on 'India-Africa Growth Partnership' on June 15, 2023, in New Delhi.
Other Significant Events
Indo-Pacific Economic Framework for Prosperity (IPEF)
Goyal participated in the third in-person IPEF Ministerial meeting on November 14, 2023, in San Francisco, California. During this Ministerial meeting, the first-of-its-kind IPEF Supply Chain Resilience Agreement was signed by the minister along with the ministers from other IPEF partner countries. The agreement is expected to make IPEF supply chains more resilient, robust, and well-integrated, and contribute towards economic development and progress of the region as a whole.
20th ASEAN-India Economic Ministers’ meeting
The 20th ASEAN-India Economic Ministers’ meeting was held on August 21, 2023, in Semarang, Indonesia. The economic ministers or their representatives from all the 10 ASEAN countries viz. Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam participated in the meeting. The main agenda of this year’s meeting was the timely review of ASEAN-India Trade in Goods Agreement (AITIGA) which was signed in 2009.
Ongoing Free Trade Agreement negotiations
In 2022 and 2023, India has been actively engaging in several Free Trade Agreement (FTA) negotiations with various countries and regional entities. The India-European Union (EU) FTA negotiations, re-launched on June 17, 2022, are a follow-up to the India-EU Leaders' announcement in Porto on May 8, 2021 and cover 23 policy areas with six rounds completed by October 2023.
Similarly, India-UK FTA negotiations began on January 13, 2022, with the 13th round taking place from September 18 to December 15, 2023, aiming for a comprehensive and ambitious agreement, and the 14th round scheduled for January 2024.
The India-Australia Comprehensive Economic Cooperation Agreement (CECA), building on the foundation of the India-Australia Economic Cooperation and Trade Agreement (ECTA) effective from December 29, 2022, started negotiations in February 2023. The 7th round in October 2023 saw significant progress, particularly in the Rules of Origin.
The India-Sri Lanka Economic and Technology Cooperation Agreement (ECTA) negotiations continued with the 12th round conducted in Colombo from October 30 to November 1, 2023, focusing on a spectrum of critical areas.
Additionally, a special round of negotiations for the India-Peru Trade Agreement was held virtually on October 10-11, 2023, discussing various chapters, with another session on services and movement of natural persons on November 21, 2023. These negotiations highlight India's strategic efforts to expand and strengthen its global economic partnerships.
Policies regarding import/export
In early and mid-2023, DGFT in India implemented significant policy changes to enhance and streamline export processes. On January 18, 2023, DGFT amended the Handbook of Procedures (2015-20), specifically Para 4.42, to simplify the calculation of Composition Fee under the Advance Authorization Scheme. This amendment facilitates automation and expedites service delivery by making the process more efficient and user-friendly.
Furthermore, the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) has been extended until June 30, 2024, maintaining the existing rates for export items. This WTO-compatible scheme, functioning in an IT-driven environment, offers a reimbursement mechanism for various taxes and levies not covered by other refund mechanisms, assisting export entities in their manufacturing and distribution processes. As of March 31, 2023, the scheme had extended support of ₹27,018 crore over a period of 27 months.
A function was held by Government e-Marketplace (GeM) in partnership with Self-Employed Women’s Association, Bharat (SEWA Bharat) to commemorate the success of ‘Womaniya on Government eMarketplace (GeM)’ on January 14, 2023, in New Delhi. Launched in 2019, the ‘Womaniya’ initiative has sought to encourage the participation of women entrepreneurs and self-help groups (SHG) from the informal sector on the GeM portal and facilitate the sale of their products directly to various government buyers, sans intermediaries.
Despite global headwinds both merchandise and services exports experienced robust performance. India’s overall export (merchandise plus services) stood at $499.46 billion during April-November 2023 as compared to $506.52 billion during April-November 2022.
Fibre2Fashion News Desk (KD)