The Foreign Trade Policy (FTP) is a strategic framework and concept formulated by the Ministry of Commerce and Industry to regulate and promote India's exports and imports. Its primary objective is to enhance global competitiveness, boost exports, and maintain a favorable balance of trade.
The FTP's origin traces back to the economic reforms of 1991, with the first formal policy, then called the Export-Import (EXIM) Policy, introduced in 1992. This policy replaced the restrictive Imports and Exports (Control) Act, 1947, solving the problem of a license-based control system by shifting to a more liberalized, market-oriented approach. The policy was officially renamed Foreign Trade Policy (FTP) in 2004.
The policy is framed under the authority of the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act, 1992), which empowers the Central Government to make provisions for the development and regulation of foreign trade. The policy is implemented by the Directorate General of Foreign Trade (DGFT), which also issues the mandatory Importer Exporter Code (IEC). Key mechanisms include export promotion schemes like the Advance Authorisation (AA) and Export Promotion Capital Goods (EPCG) schemes, and the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. The policy must also align with World Trade Organization (WTO) norms.
The current policy, FTP 2023, released on March 31, 2023, replaced the earlier fixed five-year policies with a dynamic, open-ended framework that has no sunset date. The major change is the philosophical shift from an incentive-based regime to a remission and facilitation-based system, built on four pillars: incentive to remission, export promotion through collaboration, ease of doing business, and focus on emerging areas like e-commerce. The overarching goal of the FTP 2023 is to achieve $2 trillion in total exports by 2030.