The Hindu Business Line : Breather to exporters on the cards — Study group presents customs, trade practice in Australia, the Philippines

Industry & Economy - Foreign Trade

Breather to exporters on the cards — Study group presents customs, trade practice in Australia, the Philippines

G. Srinivasan

New Delhi , Jan. 29

FACED with the hassle of running from pillar to post to conform to complex procedures of the various governmental departments to get their products shipped to avail themselves of the proclaimed policy support, the exasperated exporters may at long last look for a reprieve if the far-reaching recommendations of an official study group are implemented.

A five-member study group, headed by the Director General of Foreign Trade (DGFT), Mr K.T. Chacko, recently toured Australia and the Philippines to ascertain first-hand the export and import procedures with a remit to scan the practice being followed by the customs and trade authorities there.

The recommendations of the study group, approved by the Department of Commerce, are now doing the rounds with other departments such as finance, environment, chemicals and agriculture and once their approvals are obtained, they might form part of the forthcoming Export-Import (Exim) Policy modifications to be unveiled in March 31, sources in the Government told Business Line here.

Asked why the two countries were chosen for study, the sources said Australia is one of the countries with advanced and sophisticated level of computerisation in most of the regulatory and promotion agencies. Besides, Australian customs is totally computerised over the last 10 years, as the traders' file 99.9 per cent of the documents online with customs.

About the choice of the Philippines, the sources contend that nearly 81 per cent of manufactured exports from that country are from Special Economic Zones with a notable facility to small exporters being "One Stop Export Documentation Centre' service to keep the transaction cost to trade and industry minimal.

The study report on simplification of procedures and transaction cost reduction has favoured the establishment of One Stop Documentation Centre (OSDC) in the country's major airports/seaports/inland container depots (ICDs) to provide clearances/certificates/forms under one roof from all the Government agencies tasked with processing of export goods. The facility will have authorised officers from customs, DGFT, Ministry of Agriculture, Wild Life, Drug Controller's Office, DGCI&S and other regulatory bodies to provide all clearances pertaining to imports/exports under one roof within a time line of one to two hours.

The OSDC should be set up by export organisations such as FIEO/Export Promotion Councils/Commodity Boards and these managers might levy service charges from the exporters for this purpose. To start with, the centre may be set up in the four metros.

Yet another major suggestion is a comprehensive risk management strategy on lines of global practice which would identify the risks, analyse such risks and address them effectively so that the Government agencies should work on risk-based management system rather than checking or regulating each exporter/importer. Such a comprehensive risk management strategy would help expedite the clearance of cargo, infuse confidence and reduce scope for misuse. Since the risk management system involves a limitation on physical inspection of goods, it is advisable that a system of post-clearance audit on lines of best global practices also be put in place.

As the word `licence' had assumed pejorative connotations over the years, this word needs to be replaced by `authorisation/permission' since most of the licences issued presently are `facilitation authorisations only,' the report noted. Moreover, exporters availing themselves of the drawback facility are now required to maintain bank accounts at each port, which adds to the transaction costs. Hence a system for only one account with the Customs by the exporters could be devised and the drawback disbursed at ports other than where he maintains the accounts might be digitally transmitted to the exporters' account.

Since today a company is required to submit licence-wise bond to the customs authorities, which is laborious, it may be allowed to furnish a single bond at one customs house for duty-free clearance of goods at any customs port under any scheme in view of the fact that all major customs ports are having EDI (Electronic Data Interchange) connectivity.

On analogous lines to AUSTRADE, a single nodal export promotion board maybe set up to strategise export promotion activities, the report said suggesting further reforms such as simplified transhipment procedures, payment of customs duty or licence fee through credit cards and online issue of import-export code and time bound assessment and adjudication of exporters/importers cases. The report also favours manning of immigration counters by Customs staff (as in Australia) to be complemented by support from immigration authorities to ensure smooth airport business facilitation.