The government extends its foreign trade policy by 6 months

According to a tweet from ANI, the Ministry of Commerce said that “the existing foreign trade policy has been extended for six months due to currency volatility and global uncertainty. The geopolitical situation is not suitable to a long-term foreign trade policy“.

Previously, the government extended the due date of the 2015-20 Foreign Trade Policy to September 30, 2022.

Currently, fears of a recession in major economies like the United States and Europe have heightened panic among investors. Foreign investors began pulling their money out of stocks as the bears took control. Along with the outflow of foreign funds, geopolitical tensions in Ukraine, coupled with inflationary pressures and monetary policy tightening, led to further weakening of the rupiah against the US dollar. The US currency is at a 22-year high, while the rupee hit a new all-time low of 81.6 against the greenback.

Foreign trade policy provides a framework for increasing exports of goods and services as well as creating jobs and increasing value added in the country. It aims to support both the manufacturing and service sectors, with a particular focus on improving the ease of doing business.

Between April and August 2022, India’s merchandise exports amounted to $192.59 billion, up 17.12% from $164.44 billion in the same period a year ago . Imports continue to increase more than exports. In the first five months of FY23, merchandise imports increased 45.64% to $317.81 billion from $218.22 billion in the corresponding period last year. The trade deficit more than doubled to $125.22 billion (April-August 2022) from $53.78 billion in the same period last year.

Earlier this month, Trade Minister Piyush Goyal held a meeting focusing on setting export targets, the new Foreign Trade Policy (FTP) (2022-27) and strategies and measures to advancing domestic manufacturing and exports. At the meeting, the Board of Trade advised the government on policy measures related to foreign trade policy to achieve the goals of boosting Indian trade.