Trade policy

Story hook

On 31 March 2023, India quietly let three of its largest export promotion schemes — MEIS, SEIS for many sectors, and the older incremental incentive grants — expire without renewal. The next morning, 1 April 2023, the Foreign Trade Policy 2023 went live, replacing them with a single, WTO-compatible architecture built around four principles: incentive to remission, exporter to developer, free flow to managed flow, and an open-ended timeline. The FTP 2023 was the first FTP without an expiry date — a break from the five-yearly tradition since 1992.

The change reflected a deeper shift. India had been losing WTO disputes brought by the US, EU, and others — the DSB ruling in DS541 (October 2019) held that India's export-incentive schemes (MEIS, EOU, SEZ, EPCG) were prohibited subsidies under WTO's Agreement on Subsidies and Countervailing Measures (SCM). India appealed, but with the WTO Appellate Body paralysed since 2019, the appeal sat in limbo. India had to pivot — fast.

The new FTP introduced RoDTEP (Remission of Duties and Taxes on Exported Products) — a rebate of embedded taxes rather than an incentive, which is WTO-compatible. It also created the DESH Bill framework for SEZ reform and a district-as-export-hub plan to push the country toward its declared target: $2 trillion exports by 2030.

Why this matters for UPSC

Foreign Trade Policy is a regular Prelims-Mains topic — at least 1-2 Prelims questions per year on DGFT, scheme acronyms (RoDTEP, RoSCTL, EPCG), SEZ vs FTZ, and WTO compatibility. Mains questions recur on India's export competitiveness, SEZ reforms, the FTP architecture, and trade-related industrial policy. Interview boards test the candidate's grasp of why we lost the WTO case and how RoDTEP fixes it.