India Making Changes to 'Customs Environment' to Address Issues Faced By Exporters, Report Says

India’s Central Board of Indirect Taxes and Customs is looking into the “quality and cost of services” in the country’s customs, such as shipping lines and customs brokers, and is planning to abandon “physical supervision” in bonded warehouses, according to a May 7 report from the India Brand Equity Foundation. The announcement is part of a larger examination by the CBIC into “issues” faced by its exporters in an attempt to improve “trade facilitation.”

As part of the process, the CBIC is evaluating its export promotion policies and examining the impact of its free trade agreements, “tariff concessions, non-tariff barriers faced by exporters and facilitating e-commerce exports,” the report said. India’s evaluation of its “customs environment” may include “popularising the manufacture-in-bond under Section 65 of the Customs Act, wherein manufacturers can import duty-free for export in the bonded warehouse,” according to the report. A CBIC official said the government wants to “push the scheme to a few export-oriented sectors like apparel, gems and jewellery, carpets, handicrafts, and electronic equipment,” the report said. The official added that customs is planning to move away from “physical supervision in bonded warehouses” to “record-based supervision … for most cases.”

India’s trade agreements have been criticized for “being skewed” in favor of the “partner country,” according to the report, increasing India’s trade deficit. The foundation said the country’s trade deficit hit “a high of $176 billion in 2018-19.” As a result, the CBIC official said the country is “looking into issues faced by exporters amid intense competition in the international market,” the report said.