Context: The Ministry of Commerce & Industry has issued a press release dated 12 Jan 2021 to give a brief on Parliamentary Consultative Committee meeting of Commerce and Industry on which was held to discuss “New Foreign Trade Policy 2021-26”. 

Background

• India's FTP has conventionally been formulated for five years at a time. 
• The FTP 2015-20 came into effect on 1st of April 2015 and the same was extended by one year till 31 March 2021, due to Covid-19 pandemic. 

The new FTP (2021-26)

• It will come into effect from 1st April 2021 for a period of five years.
• It will strive to make India a leader in the area of international trade with a goal to make India a USD 5 Trillion economy.  

By boosting exports - both merchandise and services, through 

• Systematically addressing domestic and overseas constraints related to the policy, 
• Regulatory and operational framework for lowering transactions costs and enhancing ease of doing business, 
• Creating a low cost operating environment through efficient, 
• Cost-effective and adequate logistical and utilities infrastructure.  

Significance

• Correcting the imbalances within India: By improving operations of the domestic manufacturing and services sector in combination with efficient infrastructure support.
• Growth and employment: By channelizing the synergies gained through merchandise and services exports.

Foreingn Trade Policy(FTP) or Export Import(EXIM) Policy of India

• Foreign trade in India is regulated by the Foreign Trade (Development and Regulation) Act, 1992 and is guided by the EXIM Policy of the Government of India.
• FTP is a set of guidelines and instructions established by the Directorate General of Foreign Trade (DGFT) in matters related to the import and export of goods in India.

FTP 2015-20
Objectives

• It aims at doubling the overseas sales to $900 billion by 2019-20.
• It provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in line with the ‘Make in India’ programme.
• Integrating the foreign trade with “Make in India” and “Digital India” Programme.

Salient features

• MEIS scheme: A single Merchandise Exports from India Scheme(MEIS) has been formulated by merging five existing schemes to promote merchandize exports.
• The incentives are to be provided in the form of duty scrips as % of FOB (free on board) value of exports.
• SEIS scheme: The Services from India Scheme(SFIS) has been replaced by Service Exports from India Scheme (SEIS). SEIS will be only for India based service providers and will be based on net foreign exchange earned.

Both the SEIS and MEIS schemes are applicable to SEZ units.

• In order to ensure trade facilitation and ease of doing business, Paperless Trade and Online filling of forms has been provided.
• E-commerce export is applicable to items of worth upto Rs 25,000 per consignment.
• Provision for Export oriented units(EOUs), Export hardware technology park and software technology park.
• The Duty free scrips (form of credits) are provided to the exporters under various export promotion schemes of the government.The scripts may be transferable or nontransferable.

Directorate General of Foreign Trade(DGFT)

• It is an attached office of the Ministry of Commerce and Industry and is headed by Director General of Foreign Trade. 
• Right from its inception till 1991, when liberalization in the economic policies of the Government took place, this organization has been essentially involved in the regulation and promotion of foreign trade through regulation. 
• Keeping in line with liberalization and globalization and the overall objective of increasing exports, DGFT has since been assigned the role of “facilitator”. 
• The shift was from prohibition and control of imports/exports to promotion and facilitation of exports/imports, keeping in view the interests of the country.
• DGFT is the main governing body in matters related to Exim Policy. 
• Foreign Trade (Development and Regulation) Act,1992: The main objective of the Foreign Trade (Development and Regulation) Act is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India. The act has replaced the earlier law known as the Imports and Exports (Control) Act 1947.

For More: https://abhipedia.abhimanu.com/IAS/Study-Notes-/1/516/14/Economic-Affairs-Foreign-Trade---Trends-and-Policy