Evolution of Maritime Law in India

India’s maritime legal framework has undergone a remarkable transformation over the past century. The foundations of Indian admiralty law were established during the colonial era, with the enactment of British maritime legislation that remained operational even after India gained independence in 1947. For decades, Indian courts grappled with outdated colonial statutes, including the Admiralty Court Act of 1840, the Admiralty Court Act of 1861, the Colonial Courts of Admiralty Act of 1890, and the Colonial Courts of Admiralty (India) Act of 1891. These archaic laws, some dating back over 170 years, proved increasingly inadequate for addressing the complexities of modern international maritime commerce.

The need for reform became apparent as India’s maritime trade expanded significantly. In 1986, a committee chaired by Mr. Praveen Singh, the then Director-General of Shipping in Mumbai, conducted an extensive review of existing maritime laws. The committee’s findings highlighted that the admiralty jurisdiction exercised by Indian courts had become obsolete and recommended the enactment of modern legislation that would clearly define the scope and extent of admiralty jurisdiction in India [1]. Despite numerous attempts to introduce an Admiralty Bill in Parliament during 1993, 1999, 2005, 2009, and 2012, it was only in 2017 that the Parliament finally passed the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 [2]. The Act received presidential assent and came into force on April 1, 2018, following a notification dated February 22, 2018.

Structure and Applicability of the Act

The Admiralty Act, 2017 is organized into four distinct chapters containing 18 sections that address various aspects of maritime law. The Act applies to every vessel operating within Indian territorial waters, regardless of the owner’s place of residence or domicile. However, certain categories of vessels fall outside its purview. The Act specifically excludes inland vessels as defined in the Inland Vessels Act of 1917, vessels under construction that have not yet been launched, and warships or naval auxiliaries owned or operated by the Central or State Government for non-commercial purposes. Additionally, foreign vessels used for non-commercial purposes, as may be notified by the Central Government, are also exempt from the Act’s application [2].

The legislation defines a vessel broadly to include any ship, boat, sailing vessel, or other description of vessel used or constructed for use in navigation by water, whether propelled or not. This definition encompasses barges, lighters, other floating vessels, hovercrafts, offshore industry mobile units, and even vessels that have sunk, are stranded or abandoned, and the remains of such vessels. This expansive definition ensures that the Act covers virtually all types of maritime property that could give rise to maritime claims.

Expansion of Admiralty Jurisdiction

One of the most significant reforms introduced by the Admiralty Act, 2017 was the substantial expansion of admiralty jurisdiction beyond the three traditional chartered High Courts. Prior to the enactment of this legislation, admiralty jurisdiction was vested exclusively in the High Courts of Bombay, Madras, and Calcutta under various colonial-era laws [3]. The new Act extended this jurisdiction to five additional High Courts, namely those of Karnataka, Gujarat, Orissa, Kerala, and Hyderabad (for the States of Telangana and Andhra Pradesh). This expansion brought the total number of High Courts with admiralty jurisdiction to eight, significantly improving access to specialized maritime courts across India’s coastal states.

The Act grants each of these High Courts jurisdiction over the territorial waters falling within their respective state boundaries. However, the precise demarcation of these territorial waters has been a subject of ongoing discussion. During the parliamentary debates on the Admiralty Bill in 2016, concerns were raised about the lack of clarity regarding the boundaries of territorial waters for each state. Some members of Parliament suggested that modern technologies such as satellite mapping and geo-spatial mapping should be employed to clearly delineate these jurisdictional boundaries. The Act also empowers the Central Government to extend admiralty jurisdiction to other High Courts through official notifications, allowing for future expansion as needed.

Landmark Judicial Precedents

The development of admiralty jurisdiction in India has been significantly shaped by judicial interpretation, particularly in cases decided before the enactment of the 2017 Act. The Supreme Court’s decision in M.V. Elisabeth and Others v. Harwan Investment and Trading Pvt. Ltd. stands as a watershed moment in Indian admiralty jurisprudence [4]. In this landmark case, the Court addressed the fundamental question of whether Indian High Courts possessed the authority to exercise admiralty jurisdiction over foreign vessels owned by foreign companies with no place of residence or business in India.

The facts of the case involved a Greek-owned vessel, M.V. Elisabeth, which departed from the Port of Marmagao without issuing the required bills of lading for goods being carried. Upon reaching its destination, the carrier misdelivered the goods contrary to the respondent’s instructions. When the vessel subsequently entered the port of Visakhapatnam, it was arrested pursuant to an action in rem initiated by the respondent under the admiralty jurisdiction of the Andhra Pradesh High Court. The vessel owners challenged this arrest, arguing that Indian courts lacked jurisdiction over foreign vessels for causes of action arising outside Indian waters.

The Supreme Court rejected this narrow interpretation of admiralty jurisdiction. The Court held that High Courts in India are superior courts of record with inherent and plenary powers, including the jurisdiction to determine their own authority. The Court emphasized that the admiralty jurisdiction of Indian High Courts is not frozen at the level defined by colonial-era legislation but continues to evolve. The judgment established that once a foreign ship is arrested in Indian waters by order of a High Court exercising admiralty jurisdiction, the court can proceed with the trial as in any other suit, and any decree obtained is enforceable against the owner’s property within the jurisdiction [4].

In Kamalakar Mahadev Bhagat v. Scindia Steamship Navigation Co. Ltd., the Bombay High Court further clarified that suits for damages arising from collisions on the high seas must be adjudicated by the High Court having admiralty jurisdiction, regardless of whether the vessels involved are Indian or foreign-flagged [5]. Similarly, in Bai Kashibai & Ors. v. Scindia Steamship Navigation Co. Ltd., it was held that suits for damages relating to loss of life resulting from collisions on the high seas, whether brought in rem or in personam, fall within the exclusive jurisdiction of the High Court under its admiralty authority [6]. These decisions collectively established important principles regarding the scope and exercise of admiralty jurisdiction in India.

Maritime Claims Under the Act

The Act provides an exhaustive enumeration of maritime claims that can be adjudicated by courts exercising admiralty jurisdiction. Drawing inspiration from the International Convention Relating to the Arrest of Seagoing Ships of 1952 and 1999, the Act lists various categories of claims in its fourth section. These include claims relating to the operation of ships, such as loss or damage caused by a vessel, loss of life or personal injury occurring in connection with the operation of a vessel, and salvage operations. The Act also covers claims for necessaries supplied to a vessel, construction, repair, or equipment of any vessel, wages of masters and crew members, and master’s disbursements.

Additionally, the Act recognizes claims arising from disputes regarding the ownership or possession of a vessel, co-ownership disputes, mortgages and charges on vessels, towage services, pilotage services, goods and materials supplied for vessel operation, port and waterway dues, insurance premiums, and commissions and brokerage relating to vessels. Claims concerning the sale of vessels, agreements for the use or hire of vessels (including charter parties), and agreements for the carriage of goods or passengers are also included within the definition of maritime claims.

Maritime Liens and Their Priority

A distinctive feature of admiralty law is the concept of maritime liens, which the Act addresses in detail. A maritime lien is a privileged claim against a vessel, cargo, or freight for services rendered to or damage caused by the maritime property. Unlike ordinary liens, a maritime lien travels with the vessel and can survive changes in ownership, registration, or flag. The Act establishes a clear hierarchy of maritime liens, prioritizing them in the following order: claims for wages and other amounts due to the master, officers, and crew arising from their employment on the vessel, including costs of repatriation and social insurance contributions; claims for loss of life or personal injury occurring in direct connection with the operation of the vessel; claims for reward for salvage services; and claims for port, canal, and other waterway dues and pilotage dues [2].

The Act specifies that maritime liens for crew wages are extinguished after a period of two years from the date when the claim arose. This time limitation balances the need to protect seafarers’ rights with the principle of finality in maritime transactions. When a vessel is sold pursuant to a court order, the maritime lien on the vessel is extinguished, though the claim against the owner may continue. The establishment of this clear priority system helps resolve conflicts between multiple claimants and provides certainty in maritime financing and transactions.

Vessel Arrest and Sale Procedures

The Act establishes detailed procedures for the arrest and sale of vessels in connection with maritime claims. A High Court may order the arrest of a vessel within its jurisdiction to provide security against a maritime claim when the court has reason to believe that the person who owned the vessel at the time the claim arose is liable for the claim and remains the owner when the arrest is effected. Alternatively, arrest may be ordered if the demise charterer at the time the claim arose is liable and remains either the demise charterer or the owner at the time of arrest, or if the claim is based on a mortgage or similar charge on the vessel [2].

The Act also permits sister-ship arrests, whereby a court may order the arrest of any other vessel owned by the same person or demise charterer in place of the vessel against which the maritime claim has been made. However, only one vessel may be arrested at any given time. When a vessel is ordered to be arrested, it is held as security against the claim pending the final outcome of the admiralty proceedings. The court may require the arresting claimant to furnish an unconditional undertaking on terms determined by the court to secure the defendant against any loss or damage that may result from the arrest if it proves to be wrongful or unjustified.

The Act distinguishes between actions in rem and actions in personam. An action in rem is brought against the vessel itself as the defendant, allowing the court to exercise jurisdiction over the maritime property regardless of the owner’s presence. An action in personam is brought against the person liable for the claim. However, the Act places certain restrictions on actions in personam. For instance, the High Court generally will not entertain an action in personam to enforce certain maritime claims unless any proceedings previously brought by the plaintiff in any court outside India against the same defendant for the same incident have been discontinued or have become final [2].

Impact and Significance of the Reform

The enactment of the Admiralty Act, 2017 represents a watershed moment in Indian maritime law. By repealing outdated colonial legislation and establishing a modern, codified framework for admiralty jurisdiction, the Act has brought Indian maritime law into alignment with contemporary international practices. The extension of admiralty jurisdiction to eight High Courts across coastal states has democratized access to specialized maritime courts, reducing the burden on the three traditional chartered High Courts and enabling more efficient resolution of maritime disputes across the country.

The Act also introduced important procedural reforms. Any judgment, decree, or order passed by a single judge of a High Court exercising admiralty jurisdiction may be appealed to a Division Bench of the same High Court. This ensures adequate appellate review while maintaining specialization in maritime matters. Furthermore, the Act mandates that the Central Government shall appoint a list of assessors with expertise in maritime affairs to assist judges in determining rates and claims in admiralty proceedings. This provision recognizes the technical complexity of maritime disputes and ensures that courts have access to specialized knowledge when needed [7].

For the maritime industry, the Act has provided much-needed clarity and predictability. Ship owners, charterers, cargo interests, maritime financiers, and other stakeholders now have a clear statutory framework governing their rights and obligations. The codification of maritime claims, the establishment of a clear hierarchy of maritime liens, and the detailed procedures for vessel arrest and sale have reduced uncertainty and facilitated more efficient maritime commerce. The Act has also enhanced India’s attractiveness as a maritime jurisdiction, potentially encouraging greater use of Indian courts for the resolution of international maritime disputes.

Conclusion

The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 stands as a testament to India’s commitment to modernizing its legal framework to support its growing maritime sector. By replacing colonial-era legislation with a contemporary statute that reflects international best practices, India has taken a significant step toward establishing itself as a major maritime nation. The Act’s clear articulation of jurisdictional boundaries, maritime claims, arrest procedures, and the priority of maritime liens provides the legal certainty necessary for the efficient functioning of maritime commerce.

As India continues to develop its ports, shipping infrastructure, and maritime capabilities, the importance of a robust legal framework cannot be overstated. The Admiralty Act, 2017 provides this foundation, ensuring that maritime disputes can be resolved fairly, efficiently, and in accordance with recognized international principles. While the Act represents a major achievement, its ultimate success will depend on how it is interpreted and applied by Indian courts in the years to come. The early jurisprudence under the Act suggests that Indian courts are rising to this challenge, developing a body of case law that will guide the maritime sector for decades to come.

References

[1] Law Commission of India. (Various Reports on Maritime Law Reform). Available at: https://lawcommissionofindia.nic.in 

[2] The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017. India Code. Available at: https://www.indiacode.nic.in/handle/123456789/2256 

[3] Colonial Courts of Admiralty Act, 1890 and Colonial Courts of Admiralty (India) Act, 1891. India Code Legislative Archives.

[4] M.V. Elisabeth and Others v. Harwan Investment and Trading Pvt. Ltd., AIR 1993 SC 1014. Available at: https://indiankanoon.org/doc/1515069/ 

[5] Kamalakar Mahadev Bhagat v. Scindia Steamship Navigation Co. Ltd., AIR 1961 Bom 186. Available at: https://www.casemine.com/judgement/in/5608f948e4b0149711144821 

[6] Bai Kashibai & Ors. v. Scindia Steamship Navigation Co. Ltd., AIR 1961 Bom 200. International Centre for Commercial Law (ICLG). Available at: https://iclg.com/practice-areas/shipping-laws-and-regulations/india 

[7] Admiralty (Assessors) Rules, 2018. Directorate General of Shipping. Available at: https://www.dgshipping.gov.in/Content/admiraltyactrules.aspx 

Authorized and Published by Vishal Davda

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Introduction

India’s Foreign Trade Policy represents a critical pillar in the nation’s economic architecture, serving as the regulatory framework that governs the movement of goods, services and technology across international borders. On April 1, 2015, Minister of Commerce and Industry Nirmala Sitharaman unveiled the Foreign Trade Policy for 2015-2020, marking a significant shift in India’s approach to international trade [1]. This five-year policy framework emerged at a pivotal moment in India’s economic trajectory, aligning closely with the government’s flagship initiatives including Make in India, Digital India and Skills India. The policy sought to address the twin challenges of enhancing India’s export competitiveness while simplifying the bureaucratic maze that had historically characterized India’s trade regime.

The timing of this policy was particularly significant. India stood at a crossroads where global trade dynamics were rapidly evolving, with mega-regional trade agreements reshaping international commerce and global value chains redefining manufacturing processes. The Foreign Trade Policy 2015-2020 aimed to position India not merely as a participant but as a significant player in these transformations. The government set an ambitious target to increase exports of merchandise and services from USD 465.9 billion in 2013-14 to approximately USD 900 billion by 2019-20, while simultaneously raising India’s share in world exports from 2 percent to 3.5 percent [1]. These objectives reflected not just economic ambitions but a broader vision of integrating India more deeply into global trade networks while maintaining policy space for developmental priorities.

Legal Framework and Statutory Foundation

The legal foundation of India’s foreign trade Policy regime rests upon the Foreign Trade (Development and Regulation) Act, 1992, which replaced the colonial-era Imports and Exports (Control) Act of 1947. This Act represents a watershed moment in India’s economic liberalization, providing the Central Government with enabling powers to regulate foreign trade while facilitating the transition from a controlled economy to a more market-oriented system. Section 5 of the Act specifically empowers the Central Government to formulate and announce foreign trade policy through official gazette notifications [2]. The provision states that “The Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy.” This statutory framework grants flexibility to the government to respond to evolving trade dynamics without requiring legislative amendments for policy changes.

The Act also contains an important proviso under Section 5 that mandates special treatment for Special Economic Zones. It directs that “in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications and adaptations, as may be specified by it by notification in the Official Gazette” [2]. This provision acknowledges the unique nature of SEZs as enclaves of liberal trade policy within India’s broader regulatory framework. The Foreign Trade (Development and Regulation) Act, 1992 also establishes the institutional architecture for trade administration, including the appointment of the Director General of Foreign Trade under Section 6, who serves as the principal administrative authority responsible for implementing foreign trade policy. The Director General advises the Central Government on policy formulation and bears responsibility for executing the policy through a network of regional offices across India.

The 2015-2020 India’s Foreign Trade Policy operated within this statutory framework, with the Directorate General of Foreign Trade serving as the nodal agency for policy implementation. The policy emphasized good governance through digitization of processes, establishment of help desks and creation of online grievance redressal mechanisms. Trade facilitation measures included the Export Data Processing and Monitoring System introduced by the Reserve Bank of India to track export transactions and ensure compliance [3]. The policy also introduced the concept of Towns of Export Excellence, recognizing urban clusters with annual exports exceeding Rs. 750 crore and providing them with focused support for infrastructure development and export promotion.

The Merchandise Exports from India Scheme

The Merchandise Exports from India Scheme emerged as the centerpiece of the 2015-2020 Foreign Trade Policy, consolidating five previous reward schemes into a single, streamlined mechanism. Prior to MEIS, exporters navigated a complex landscape of schemes including the Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri-Infrastructure Incentive Scrip and Vishesh Krishi and Gram Udyog Yojana, each with different types of duty scripts and varying conditions attached to their use. This fragmentation created administrative burdens and reduced the effectiveness of export incentives. MEIS rationalized this structure by providing a unified framework where rewards ranged from 2 to 5 percent of the realized FOB value of exports, depending on the product and destination market [4].

The scheme divided destination markets into three groups, with differentiated reward rates reflecting India’s trade strategy and market priorities. Countries were classified based on factors including trade potential, existing market share, competitive landscape and strategic importance. MEIS specifically targeted goods with high export intensity, significant employment generation potential and products where India possessed competitive advantages but faced infrastructural bottlenecks. The rewards under MEIS were provided as duty credit scrips, which were freely transferable and could be used for payment of customs duties, excise duties and service tax. Importantly, MEIS eliminated the sector-specific and end-use restrictions that had characterized earlier schemes, providing exporters with greater flexibility in utilizing their benefits.

The basic objective underlying MEIS was to offset infrastructural inefficiencies and associated costs involved in exporting goods produced or manufactured in India. India’s export competitiveness has historically been constrained by infrastructure deficits including inadequate port facilities, inefficient logistics networks, power shortages and complex regulatory procedures. MEIS sought to partially compensate exporters for these disadvantages by providing financial incentives that would help level the playing field with competitors from countries with superior infrastructure. The scheme also aimed to promote diversification of India’s export basket, encouraging exports of value-added products and products from labor-intensive sectors that could generate significant employment.

Services Exports from India Scheme

Recognizing that services had emerged as a major engine of India’s export growth, the Foreign Trade Policy 2015-2020 introduced the Services Exports from India Scheme, replacing the earlier Served from India Scheme. SEIS represented a significant policy evolution, expanding coverage to 77 services including airport operations and ground handling services. The scheme applied to service providers located in India rather than restricting benefits to Indian service providers, thereby broadening its scope to include foreign service providers operating from Indian territory [4]. This inclusive approach aligned with India’s commitments under the General Agreement on Trade in Services and reflected the reality of India’s services sector, where foreign investment and collaboration played important roles.

Under SEIS, eligible services were rewarded at the rate of 3 percent based on net foreign exchange earned. The scheme covered diverse service sectors including business services, communication services, construction services, distribution services, educational services, environmental services, financial services, health related services, tourism services and transport services among others. The reward was calculated on the net foreign exchange earnings after deducting payments made in foreign exchange for rendering the service. Like MEIS, the rewards under SEIS were provided as duty credit scrips that were freely transferable and could be used for payment of customs duties on imports of inputs and capital goods, payment of excise duties and service tax on procurement of services and goods.

The debits under duty credit scrips issued under SEIS were eligible for CENVAT credit or drawback, ensuring that exporters could maximize the benefits of the scheme. This feature was particularly important for service exporters who typically had limited requirement for importing goods but needed to procure domestic inputs and services. By allowing the scrips to be used for payment of service tax and excise duties, SEIS provided meaningful benefits to the services sector. The scheme aimed to maintain India’s competitive edge in services exports, particularly in information technology, business process outsourcing, engineering services, healthcare services and tourism services where India had established strong global positions.

The WTO Challenge and Panel Ruling

The Foreign Trade Policy 2015-2020 faced its most significant challenge when the United States initiated dispute settlement proceedings at the World Trade Organization in March 2018. The United States challenged five sets of export subsidy measures under India’s trade regime: the Export Oriented Units, Electronics Hardware Technology Park and Bio-Technology Park Schemes; the Export Promotion Capital Goods Scheme; the Special Economic Zones Scheme; the Duty-Free Imports for Exporters Scheme; and the Merchandise Exports from India Scheme [5]. The United States argued that these programs provided prohibited export subsidies worth over USD 7 billion annually to Indian exporters across sectors including steel, pharmaceuticals, chemicals, information technology products and textiles.

The dispute centered on Articles 3.1(a) and 3.2 of the WTO Agreement on Subsidies and Countervailing Measures, which prohibit subsidies contingent upon export performance. The SCM Agreement distinguishes between prohibited subsidies, which include export subsidies and import substitution subsidies, and actionable subsidies, which are not prohibited but can be challenged if they cause adverse effects to other members. However, the SCM Agreement provided special and differential treatment for developing countries under Article 27 and Annex VII, exempting certain developing countries from the export subsidy prohibition. India had enjoyed this exemption based on its per capita GNP remaining below USD 1,000 per annum in constant 1990 dollars for three consecutive years.

The critical issue in the dispute was India’s graduation from the Annex VII(b) developing country category. It was undisputed that India had crossed the USD 1,000 threshold in 2016, graduating from the developing country exemption from 2017 onwards [6]. India argued before the WTO Panel that it was entitled to an eight-year transition period from the date of its graduation to phase out prohibited export subsidies. However, the Panel interpreted Article 27.2(b) of the SCM Agreement to mean that the eight-year transition period applied from the date of entry into force of the WTO Agreement in 1995, not from the date of individual country graduation. This interpretation meant that the transition period had expired on January 1, 2003, and India could no longer maintain export subsidies regardless of when it graduated from Annex VII(b) status.

The WTO Panel issued its report on October 31, 2019, finding that India had provided prohibited export subsidies inconsistent with the SCM Agreement. The Panel examined each challenged measure in detail. For MEIS, the Panel found that duty credit scrips awarded under the scheme constituted subsidies contingent upon export performance. The Panel determined that the provision of scrips involved a direct transfer of funds conferring a benefit on recipients, and that the scheme’s design, structure and operation made it contingent in law upon export performance [7]. For the Export Oriented Units and related schemes, the Panel found that exemptions from customs duties on imported inputs were export subsidies, though it accepted India’s defense under Footnote 1 of the SCM Agreement for certain duty exemptions on exported products.

The Panel recommendations differentiated timelines for withdrawing various subsidy programs based on the administrative and legal complexity of implementation. It directed India to withdraw the Duty-Free Imports for Exporters Scheme within 90 days from adoption of the report, the Export Oriented Units, Export Promotion Capital Goods Scheme and MEIS within 120 days, and the Special Economic Zones scheme within 180 days [7]. India filed an appeal on November 19, 2019, which prevented the Panel report from being adopted and buying India additional time. However, the appeal faced an unprecedented situation as the WTO Appellate Body became dysfunctional due to the United States blocking appointments of new members, leaving the appeal in limbo.

Implications and Policy Response

The WTO Panel ruling against India’s export subsidy programs had far-reaching implications for India’s trade policy and export sector. The schemes in question had provided critical support to exporters, helping offset India’s infrastructural disadvantages and enabling Indian products to compete in global markets. The sudden withdrawal of these benefits threatened to disrupt export industries, particularly labor-intensive sectors like textiles, leather goods and processed foods that relied on these incentives to maintain competitiveness. Exporters faced the prospect of increased costs that could price them out of international markets or force them to absorb margins that would threaten their viability.

In response to the WTO ruling, the Government of India undertook significant reforms to its export incentive architecture. In January 2021, the government launched the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to replace MEIS. Unlike MEIS, which provided benefits as a percentage of FOB value, RoDTEP is designed to reimburse exporters for embedded central, state and local duties, taxes and levies that are currently not being refunded under any other mechanism [8]. The scheme aims to be WTO-compliant by ensuring that it does not provide subsidies contingent upon export performance but rather neutralizes the disadvantage of non-refunded taxes and duties.

The transition from MEIS to RoDTEP represents a fundamental shift in India’s export promotion philosophy. Rather than providing incentives as a percentage of export value, the new approach focuses on ensuring that exports leave India without carrying the burden of domestic taxes and duties. This distinction is crucial for WTO compliance, as Footnote 1 of the SCM Agreement and Annexes II and III provide that remission or drawback of duties and taxes on exported products does not constitute a prohibited subsidy if it does not exceed the duties and taxes actually levied on the inputs consumed in producing the exported product. RoDTEP’s structure attempts to fit within this exception by limiting refunds to the actual embedded duties and taxes.

The government also introduced sector-specific schemes to support exports while maintaining WTO compliance. These include the Scheme for Remission of Duties and Taxes on Export Products, production-linked incentive schemes for specific sectors and enhanced support for development of export infrastructure. The policy response also involved greater focus on trade facilitation measures including digitization of trade processes, reduction of transaction costs, improvement of logistics infrastructure and negotiation of trade agreements that would provide market access advantages to Indian exporters. The experience highlighted the need for India to develop export competitiveness based on structural improvements in infrastructure, technology and skills rather than relying primarily on fiscal incentives.

Trade Facilitation and Institutional Reforms

Beyond the export incentive schemes, the India’s Foreign Trade Policy 2015-2020 introduced several measures aimed at simplifying procedures and reducing the cost and time for trade transactions. A significant innovation was the establishment of online systems for applications, approvals and monitoring. The policy mandated digitization of all processes under the Directorate General of Foreign Trade, allowing exporters and importers to complete transactions electronically without physical interface with officials. This digital infrastructure included online filing of applications for licenses and certificates, digital issuance of authorizations, electronic monitoring of export obligations and online grievance redressal mechanisms.

The policy also led to the creation of the National Committee for Trade Facilitation, established to implement India’s commitments under the WTO Trade Facilitation Agreement. This Committee brought together representatives from various government agencies involved in trade regulation including customs, port authorities, standards bodies and regulatory agencies. The Committee’s mandate included coordinating trade facilitation efforts across government, identifying bottlenecks in trade processes, implementing best practices and monitoring progress on trade facilitation measures [9]. This inter-agency coordination mechanism aimed to break down silos that had historically complicated trade procedures.

Trade facilitation under the policy extended to simplification of documentation requirements, reduction of the number of mandatory documents for export and import, acceptance of electronic documents and introduction of risk-based inspection procedures. The policy also promoted the concept of Authorized Economic Operators, providing trusted traders with expedited clearance procedures and reduced compliance burdens. These measures collectively aimed to improve India’s ranking on ease of doing business indicators and reduce the transaction costs that had historically made Indian exports less competitive. The focus on trade facilitation reflected an understanding that regulatory efficiency could be as important as fiscal incentives in promoting exports.

Conclusion

India’s Foreign Trade Policy 2015-2020 represented an ambitious attempt to transform the country’s export landscape through a combination of fiscal incentives, procedural simplification and institutional reforms. The policy’s alignment with national initiatives like Make in India demonstrated an integrated approach to economic development where trade policy supported broader manufacturing and services growth objectives. The introduction of MEIS and SEIS consolidated fragmented incentive schemes, providing exporters with simpler and more transparent mechanisms to access government support. These schemes contributed to growth in India’s exports during the policy period, though the full achievement of the USD 900 billion target remained elusive.

The WTO challenge and subsequent ruling against India’s export subsidy programs marked a significant setback, forcing a fundamental recalibration of India’s export promotion strategy. The dispute highlighted the tensions between developing countries’ desire to use policy tools for industrial development and the rules-based international trade system that restricts certain forms of government intervention. India’s experience demonstrates the shrinking policy space available to developing countries as they graduate to higher income levels, even while they continue to face developmental challenges and infrastructure deficits that justify targeted support for export sectors.

Looking forward, the lessons from the 2015-2020 India’s Foreign Trade Policy period suggest that sustainable export competitiveness must be built on structural foundations rather than fiscal incentives alone. This includes investments in trade infrastructure, logistics efficiency, technology adoption, skill development and quality standards. It also requires active pursuit of preferential market access through trade agreements while ensuring that domestic policy measures remain compliant with international obligations. The policy period demonstrated both the potential and limitations of government-led export promotion in an increasingly complex global trading environment where competitiveness depends on multiple factors beyond traditional incentives.

References

[1] Press Information Bureau, Government of India. (2015). Foreign Trade Policy 2015-20 Unveiled. https://www.pib.gov.in/newsite/printrelease.aspx?relid=117917

[2] Government of India. (1992). The Foreign Trade (Development and Regulation) Act, 1992. India Code. https://www.indiacode.nic.in/handle/123456789/1947

[3] Electronics and Computer Software Export Promotion Council. (2015). Foreign Trade Policy 2015-20: Key Highlights. https://www.escindia.in/policy-info/foreign-trade-policy-2015-20-key-highlights/

[4] IIFL Capital. (2015). India’s Foreign Trade Policy (FTP) Explained Simply. https://www.indiainfoline.com/knowledge-center/tax-saving-tax-planning/economics-for-everyone-indias-foreign-trade-policy-ftp-exim

[5] World Trade Organization. (2018). Dispute Settlement: DS541 – India – Export Related Measures. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds541_e.htm

[6] Cambridge International Law Journal. (2020). WTO Report on India-USA Export Subsidies Related Dispute: What Lies Ahead? https://cilj.co.uk/2020/05/29/wto-report-on-india-usa-export-subsidies-related-dispute-what-lies-ahead/

[7] Business Standard. (2019). WTO Panel Upholds US Case, Rules India’s Export Subsidies Illegal. https://www.business-standard.com/article/economy-policy/wto-panel-upholds-us-case-rules-india-s-export-subsidies-illegal-119103101565_1.html

[8] Ministry of Commerce and Industry. (2021). Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme. Government of India. https://commerce.gov.in

[9] Observer Research Foundation. (2019). WTO Ruling on Indian Export Subsidies: Tackling Contradictions of the Agreement on Subsidies and Countervailing Measures. https://www.orfonline.org/expert-speak/wto-ruling-on-indian-export-subsidies-tackling-contradictions-of-the-agreement-on-subsidies-and-countervailing-measures-58266

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