Niti Aayog suggests slew of steps to make India’s exports competitive

The measures include establishment of a national trade network (NTN), improving information flow and making customs processes and IT systems more efficient.

The NITI Aayog has proposed 17 measures to improve competitiveness of India’s external trade. The measures include establishment of a national trade network (NTN), improving information flow and making customs processes and IT systems more efficient.

The government think-tank said time has come to set up an NTN on the lines of the GSTN (for goods and services tax), integrating all departmental data flows into one integrated system to enable all export-import related compliance online.

“It (NTN) will facilitate exports-imports not only by existing firms, but will (also) bring in large number of MSMEs, which today have to export through export houses and third parties on account of complexities of the current system. This will also radically reduce the cost of transactions and make India a highly efficient country,” NITI Aayog CEO Amitabh Kant said in a note to the revenue department.

NTN will allow exporters to file all information and documents online at one place. There will be no need to separately deal with customs, directorate general of foreign trade, shipping companies, sea and air ports and banks, NITI said.

To improve the information flow, it suggested use of simple language and ensure transparency in issuance of notifications, make past tribunal decisions available online and use of standard codes for the Duty Drawback Scheme.

In order to make customs processes more efficient, the think-tank has suggested modifying the risk management system (RMS) to record/reflect actions of field officers as the time taken for removal of goods from factory to final exports has not compressed over the years.

“Even in the absence of rent seeking, officers often demand cars/free meals/other personalized services that brokers/CFS operators have to provide to ensure presence of officers on location, and expeditiously undertaking their job. Customs uses a sophisticated risk management system or RMS. But many times, Customs officers have reasons to reject RMS recommendations and go for inspection of the goods,” it said.

These reforms could further improve India’s ranking on ‘trading across borders’ parameter in the World Bank’s Ease of Doing Business, at 68 now (from 146 in 2018). Every year, merchandise (export and import) of more than $780 billion or about 27% of the GDP passes through Indian Customs before it could be exported or imported.