Commerce and Industry Minister, Piyush Goyal with Ministers of State Anupriya Patel and Commerce Secretary Sunil Barthwal releasing ‘Foreign Trade Policy 2023’, in New Delhi on March 31, 2023.
| Photo Credit: KAMAL NARANG
Marking a major shift within the nation’s stance on permitting transit of products in and out of neighbouring nations, the brand new Foreign Trade Policy (FTP) has launched a further consideration in offering such trade transit services for adjoining nations — India’s strategic and economic pursuits.
The modified language in provisions pertaining to transit services, in addition to a delicate shift within the stance on trade with neighbouring nations within the new coverage, launched by Commerce and Industry Minister Piyush Goyal on March 31, might unnerve some land-locked nations round India reminiscent of Nepal and Bhutan that depend on items’ transit by way of India.
The Foreign Trade Policy 2015-20 that was relevant until final Friday acknowledged: “Transit of goods through India from/or to countries adjacent to India shall be regulated in accordance with bilateral treaties between India and those countries and will be subject to such restrictions as may be specified by DGFT [Directorate General of Foreign Trade] in accordance with international conventions.”
This has been revised in Section 2.23 of the brand new FTP doc to state that such transit of products “shall be enabled and regulated in accordance with strategic and economic interests of India as well as the bilateral treaties between India and those countries.”
While the earlier coverage empowered the DGFT to border schemes or difficulty mandatory directions “to promote trade and strengthen economic ties with neighbouring countries”, the brand new coverage rephrases the primary goal as “promote and regulate trade…”.
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Bhutan King Jigme Khesar Namgyel Wangchuck, accompanied by Bhutanese Foreign and External Trade Minister Tandi Dorji, begins a three-day go to to India on Monday. Nepal Prime Minister Pushpa Kamal Dahal Prachanda can also be anticipated to embark on a bilateral journey to New Delhi quickly.
Trade economist Biswajit Dhar stated the implications of utilizing the provisions of Section 2.23 have to be weighed in gentle of India’s commitments on the World Trade Organisation (WTO).
“Freedom of transit to landlocked countries are guaranteed under Article V of the General Agreement on Tariffs and Trade. Further, the WTO Agreement on Trade Facilitation of which India is a party to says that ‘regulations…in connection with traffic in transit imposed by Member shall not be applied in a manner that would constitute a disguised restriction’ on traffic in transit,” he instructed The Hindu.
