Foreign Trade Policy

The Foreign Trade Policy is a statutory framework formulated under the Foreign Trade (Development and Regulation) Act, 1992, to regulate, facilitate, and promote India's merchandise and services trade while maintaining macroeconomic and foreign exchange stability.

Under Indian Economy

• It serves as the primary strategic instrument for aligning India's export promotion initiatives with domestic manufacturing capabilities and global value chain integration.
• It addresses trade governance by transitioning export support from WTO-incompatible direct fiscal subsidies to institutional trade facilitation and logistics rationalization.
• It provides administrative mechanisms for expanding rupee-denominated international trade settlement and building export infrastructure at the district level.

UPSC evaluates the Foreign Trade Policy under GS Paper III primarily through the lens of export competitiveness, trade deficit management, and WTO compliance. Questions typically require candidates to analyze the policy's transition from fiscal incentives to service-led and tech-enabled trade facilitation measures. Candidates are expected to critically assess how trade policy coordinates with domestic industrial strategies to build resilient supply chains amid global trade realignments.

• Indian Economy GS3
• Liberalization GS3