Which of the following is NOT one of the pillars of India’s ‘Foreign Trade Policy-2023’?
- (a)Enlarging MFN (Most Favored Nations)
- (b)Export promotion through collaboration
- (c)Ease of doing business
- (d)Emerging areas – streamlining SCOMET policy
Correct — A, Enlarging MFN (Most Favored Nations). The Foreign Trade Policy announced on 31 March 2023 and effective from 1 April 2023 rests on four stated pillars — incentive to remission, export promotion through collaboration with exporters, States, districts and Indian missions, ease of doing business with lower transaction costs and electronic initiatives, and emerging areas covering electronic commerce, developing districts as export hubs and streamlining the policy on special chemicals, organisms, materials, equipment and technologies. Most favoured nation treatment is a World Trade Organization obligation about non-discrimination between trading partners; extending it is not something a national trade policy sets as a pillar, and it appears in no version of the four.
- (b)Export promotion through collaboration — This is one of the four pillars, and it is the one that names collaboration with exporters, States, districts and Indian missions abroad.
- (c)Ease of doing business — This is a pillar as well, expressed as ease of doing business, reduction in transaction cost and electronic initiatives, including online approvals and a revamped certificate of origin platform.
- (d)Emerging areas – streamlining SCOMET policy — This is the fourth pillar. It groups electronic commerce exports, developing districts as export hubs and simplifying the dual-use export control policy for special chemicals, organisms, materials, equipment and technologies.
The Foreign Trade Policy 2023 broke with the practice of fixing a five-year term; it has no end date and is meant to be updated as needed. Its central shift is from incentives to remission — moving away from schemes that hand out scrips towards mechanisms that refund embedded taxes and duties, which is what World Trade Organization rules permit. Remission of Duties and Taxes on Exported Products and the Rebate of State and Central Taxes and Levies are the two instruments that carry this idea.
Three of the four options are phrased in the language of the policy document itself, and one is phrased in the language of multilateral trade law. Most favoured nation status is granted under the General Agreement on Tariffs and Trade to fellow World Trade Organization members, which India already extends by default; a country enlarges preferential access through free trade agreements rather than by making most favoured nation treatment a pillar of domestic trade policy. That difference in register is the quickest route to the answer.
- The Foreign Trade Policy 2023 was announced on 31 March 2023 and took effect on 1 April 2023.
- Its four pillars are incentive to remission, export promotion through collaboration, ease of doing business, and emerging areas.
- It has no fixed end date, unlike earlier five-year policies.
- SCOMET refers to special chemicals, organisms, materials, equipment and technologies, India's dual-use export control list.
- Most favoured nation treatment is a non-discrimination obligation under the World Trade Organization framework.
The odd option is written in the vocabulary of multilateral trade law rather than of the policy document.
- Assuming the policy runs for five years; the 2023 policy is open-ended.
- Reading incentive to remission backwards, as a move towards incentives.
- Treating most favoured nation status as a concession India grants selectively.
A which-is-not-a-pillar item where the false option comes from a neighbouring vocabulary, that of World Trade Organization obligations.
No directly related past PYQ was found.
- practice — not a real PYQ
In the Foreign Trade Policy 2023, SCOMET refers to
- (a)A scheme for small exporters
- (b)The dual-use export control list of special chemicals, organisms, materials, equipment and technologies
- (c)A customs clearance portal
- (d)A shipping subsidy
Answer(b) The dual-use export control list — streamlining its policy is part of the emerging areas pillar.
- practice — not a real PYQ
A distinctive feature of the Foreign Trade Policy 2023 compared with its predecessors is that it
- (a)Runs for a fixed term of five years
- (b)Has no fixed end date and is updated as required
- (c)Applies only to services exports
- (d)Replaces the goods and services tax on exports
Answer(b) Has no fixed end date — it is designed to be responsive rather than periodic.