The Government of India has decided to postpone the release of the new Foreign Trade Policy (FTP) and extend the existing one by six months on account of global uncertainties and currency fluctuations.
The government was scheduled to announce the new FTP by the end of September. The current policy was to end on September 30.
Additional Secretary in the Department of Commerce, Amit Yadav, said there were demands from different quarters, including industry associations and export promotion councils, to extend the policy and not introduce the new one at this time. They have stated that currently there are challenges like global uncertainties and currency fluctuations.
There was also a view to align the rollout of the new policy with the new financial year. A notification in this regard will be issued by the Directorate General of Foreign Trade (DGFT).
"We will have to defer the release of the new policy. The existing policy will be continued," Yadav told reporters here on Monday. He added the decision was taken after holding consultations with all the stakeholders, including export promotion councils.
An official statement said in recent days, exporters and industry bodies have strongly urged the government that in view of the prevailing volatile global economic and geopolitical situation, it would be advisable to extend the current policy for some time, and undertake more consultations before coming out with the new policy. "In view of this, it has been decided to extend the Foreign Trade Policy 2015-20, valid till Sept 30, 2022, for a further period of six months, w.e.f. October 1, 2022," it added.
In April, the government had extended the FTP till September 30 this year. FTP provides guidelines for enhancing exports to push economic growth and create jobs.
It was first extended on March 31, 2020, for one year due to the coronavirus outbreak and the lockdown. The Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said the postponement of the new FTP is a very prudent decision.
The global situation is extremely fluid with countries plagued with rising inflation and uncertainty due to geopolitical developments, he said, adding, "Recession is settling in many economies and currencies are bleeding. This is not the time to bring a long-term FTP." He further said it is better to bring the policy when the situation stabilises in six months so that we know where we stand and accordingly draw our strategy to face the new dynamics of global trade.
India's exports during April-August rose by 17.68 percent to $193.51 billion. Imports increased by 45.74 percent to $318 billion, while the trade deficit during the first five months of the fiscal widened to $124.52 billion. The ongoing Russia-Ukraine war has severely disrupted the global supply chains and pushed prices of commodities higher. The rupee touched an all-time low of 81.67 on Monday against the US dollar amid foreign fund outflows.
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