India, US consent on greater trade facilities for compliant exporters



India, US consent on greater trade facilities for compliant exporters

India's Central Board of Indirect Taxes and Customs (CBIC) and the US Customs and Border Protection have agreed to expand greater facilities to exporters, from each other’s country, who meet certain compliance criteria.

 

This was agreed upon as part of a mutual recognition agreement by the two agencies of the authorized economic operator (AEO) programme, a scheme that permits certain privileges to players in international trade that are accredited by authorities based on their track record. Privileges consist of greater trust in declarations, besides faster tax refunds and expedited adjudication of disputes.

 

CBIC, in an update on Monday, said the agreement was finalized at a virtual meet last week. “With the volume of trade with the US being over $80,000 million in the year 2020-21, this initiative is further expected to give a positive thrust to trade. With the implementation of the mutual recognition agreement, the goods exported by Indian AEOs will enjoy enhanced trade facilitation at all the ports of entry in the US," CBIC stated in the update.

 

In international trade, AEOs are entities permitted by customs authorities as compliant with supply chain security standards, based on documentation and other forms of verification. This voluntary scheme is open to importers, exporters, logistics providers, custodians or terminal operators, custom brokers and warehouse operators. AEOs’ self-declaration of origin of goods is also accepted.

 

CBIC said the development was important in light of Prime Minister Narendra Modi’s call to get $400 billion worth of exports during this year. Cross-border trade is a crucial part of economic recovery of many countries, including India. New Delhi is also providing incentives to boost local manufacturing and build infrastructure.

 

Throughout the pandemic, the indirect tax authority stepped up digitisation of trade related paperwork to reduce physical interface between people and to improve ease of doing business. Cross-border trade was one of the areas that the World Bank had highlighted where India needed to usher in reforms to improve its overall ease of doing business score.