Trade Analytics

Go Back

Exports likely to get clearance in a day under Make in India green channel

Economic Times:  May 02, 2016

New Delhi: Cars, smartphones, machines, medicines, garments — anything made in India will be allowed 'warehouse to wharf ' export in a single day under a new Make in India green channel that seeks to give a big boost to local manufacturing and exports.

Under the facility that will begin at select ports in a month, cargo clearance will shorten from about a week to a few hours, a senior government official told ET.

Among the measures aimed at helping to make the policy work, there will be no upfront payment of any duties. That will be settled later when the paperwork is done. "It would be launched after the passage of the finance bill," the official said, adding that this would allow clearance of shipments without any payment of duty as proposed in the budget.

A new platform being developed will let companies know when to move goods from factories or warehouses so they don't have to wait at ports, the official added.

The SWIFT system, introduced in April by the Central Board of Excise and Customs (CBEC), allows importers and exporters to file just one form at ports for clearance from all agencies including the Food Safety and Standards Authority of India, Drug Controller General of India and Plant Quarantine and Wildlife Crime Control Bureau.

SWIFT, or Single Window Interface for Facilitating Trade, also allows for risk-based assessment at customs. The programme cuts down on paperwork procedures significantly but not the waiting period of six-seven days. The new initiative seeks to address this issue.

The Narendra Modi government launched the Make in India programme to push manufacturing in the country. It's also been touted as the main vehicle to draw foreign capital.

Although India has managed to pip China in terms of foreign direct investment ( FDI) flows, there are still significant obstacles. Cargo clearance delays at ports have been cited by many foreign investors as one of the key issues.

India is ranked 133 in the World Bank's ease of doing business ranking on the "trading across borders" parameter because of paperwork taking too much time and high costs. Border compliance takes 311 hours compared with nine in highincome OECD countries. Documentation compliance takes 67 hours versus four hours.

After cutting down on paperwork, the new programme will seek to address this concern effectively, the official said. The CBEC has initiated talks with stakeholders seeking their feedback on the operational aspect of the proposed platform as well as participation. "These are the measures that will go a long way in helping trade," said Ajay Sahai, director general of the Federation of Indian Export Organisations.

However, he pointed out that the customs department needs to address manpower shortage issues urgently if it wants these ambitious programmes to succeed.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.