19 Aug, 2025
4 mins read
India’s trade with other countries is key to its economic growth. To manage and promote exports and imports, the Government of India uses a set of guidelines called the Foreign Trade Policy (FTP). This policy helps Indian businesses trade more smoothly and compete globally.
Foreign trade policy is a government plan that manages how goods and services are traded with other countries. It includes rules, benefits, and systems that support trade and reduce barriers.
In simple terms, the foreign trade policy of India helps exporters by giving them support, cutting taxes, and making trade easier. It also sets standards for smooth imports.
The latest foreign trade policy of India, launched in 2023, is more flexible than before. It focuses on digital tools, greener trade, and local export promotion.
The main goals of India’s foreign trade policy are:
Grow exports in various industries
Help small and medium businesses join global trade
Make it easier to do business across borders
Create jobs through trade opportunities
Expand exports to new countries and regions
Follow international trade rules and practices
Use digital tools to speed up export processes
These objectives aim to help Indian products and services succeed around the world.
India’s trade policies have changed over time:
Before 1991: Trade was tightly controlled. High taxes and tough rules made it hard to import and export.
1991 Reforms: The economy opened up. Import duties were cut, and trade was encouraged.
2004–2009: Policies aimed to double India’s share in global trade and set up Special Economic Zones (SEZs).
2009–2014: Support was given to important sectors during the global slowdown.
2015–2020: Schemes like MEIS and SEIS were introduced to help exporters.
2023 onwards: The latest foreign trade policy focuses on green exports, online systems, and local trade development.
This journey shows how India adapted to global changes over the years.
Here are some key features of India’s current foreign trade policy:
Online Process: Most paperwork is now digital, making approvals faster.
Refund Schemes: Exporters get refunds on some taxes instead of cash rewards.
Support for Key Sectors: Help is given to industries like textiles, electronics, and agriculture.
District Export Promotion: Each district is asked to grow its own export strength.
Green and Clean Trade: Companies are encouraged to use eco-friendly practices.
Flexible Updates: The policy is reviewed regularly and updated as needed.
These features help exporters save time, reduce costs, and trade more effectively.
The benefits of foreign trade policy are clear for businesses and the economy:
More Exports: With schemes and easier processes, Indian exports grow faster.
Lower Costs: Exporters save money through tax refunds and better infrastructure.
New Jobs: Export businesses hire more people, creating local employment.
Foreign Earnings: Selling goods abroad brings valuable foreign exchange.
Wider Reach: New markets open up for Indian goods and services.
Balanced Growth: Support at the district level spreads development beyond big cities.
These benefits help India grow and compete globally.
India’s foreign trade policy is important for many reasons:
Plans the Future: It gives a clear roadmap for trade growth.
Boosts Exports: Helps Indian businesses reach new countries.
Builds Global Links: Supports trade deals with other nations.
Encourages Small Businesses: Gives support to MSMEs to sell globally.
Improves the Economy: Trade brings money, jobs, and business confidence.
In short, the policy connects local production with global demand.
India’s Foreign Trade Policy is improving steadily. The latest version focuses on digital tools, sustainable trade, and support for local businesses. It is flexible to global changes, makes trade easier, helps exporters and strengthens India’s future economy.
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, is in charge of creating and managing the policy.
Earlier, the policy was fixed for five years. Now, it is open to updates and changes as needed, making it more flexible.
The major schemes include:
RoDTEP: Refunds taxes and duties on exports
EPCG: Allows capital goods imports at low or zero tax for export use
Advance Authorisation: Lets exporters import materials duty-free
District Export Hubs: Helps every district grow its exports
Exporters gain by paying fewer taxes, getting refunds, having simpler procedures, and finding support for reaching global markets. This helps them trade more and earn more profit.
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