What is India’s Foreign Trade Policy?
The foreign trade policy (FTP) outlines
government strategies and steps to promote
domestic production and exports to drive
It is essentially a set of guidelines for the import
and export of goods and services.
These are established by the Directorate
General of Foreign Trade (DGFT), the
governing body for the promotion and
facilitation of exports and imports under
the Ministry of Commerce and Industry.
Primary Focus Areas
The Government, through the policy,
primarily focuses on adopting a twin
strategy of promoting traditional and
sunrise sectors of exports including
Further, it intends to simplify the process of
The policy aims to:
Accelerate economic activity and make
the most of global market opportunities
Encourage sustained economic growth
by providing access to raw materials,
components, intermediates (goods used
as inputs for the production of other
goods), consumables and capital goods
required for production
Strengthen Indian agriculture, industry
Encourage stakeholders to strive for
international standards of quality
Provide quality consumer products at
Duration of the Policy
The policy is notified for five years.
It is updated every year on March 31,
and the changes come into effect from
The present policy was flagged off in
the financial year of 2015-16 and was
remain effective until the 31st of March,
But it was subsequently extended till
30th September, 2021, due to the
prevailing Covid situation
During this period, all the exports and
imports of the country will be governed
by the policy.
While the six-year policy has been
extended for another six months as India
witnesses a second wave of the Covid-
19 pandemic, a call on a fresh policy for
2021-2026 is also expected soon as the
government continues discussions with
stakeholders on the same.
1.Niryat Bandhu Scheme
The Directorate General of Foreign Trade
(DGFT) has come up with the Niryat
Bandhu Scheme for mentoring budding
exporters on the intricacies of foreign
trade through counseling, training, and
Given the rise of small and medium scale
enterprises and their role in employing
people, MSME clusters have been
identified for focused interventions to
2.Duty-Free Import Authorisation (DFIA)
It is a scheme under which duty-free
import of inputs, fuel, oil, energy sources,
a catalyst which is required for the
production of export goods is allowed.
Against such duty exemption, the importer
is required to meet certain export
obligations the finished goods.
The minimum value addition of 20% is
mandatory to be required to be achieved.
This scheme is mainly used for imports of
raw sugar to be used in product
3.Export Promotion Capital Goods (EPCG)
The objective of the EPCG Scheme is to
facilitate the import of capital goods for
producing quality goods and services
and enhance India's competitiveness.
EPCG manufacturing Scheme allows
import of capital goods for pre-
production, production and post-
production at Zero customs duty
4.Electronic Import exporter code (IEC)
Import exporter code is an export permit is
mandatory for carrying out exports and
imports from/to another country.
DGFT has facilitated the online filing of
the IEC application.