Not breaking the ‘customs’ chain
CARGOTALK INDIAN CUSTOMS BROKERS play a vital role in facilitating India’s foreign trade. explores how custom brokers are significant for the trade for safeguarding their interest during changing times.
Trade facilitation lays emphasis on the efficient implementation of trade rules and regulations and reduces all the transaction costs which are associated with different kinds of enforcement, regulation and trade policies, as well as reforms that are particularly framed to reduce the costs involved in cross border movement of goods and services. Following the approval of the Trade Facilitation Agreement (TFA) of World Trade Organisation (WTO) by India in April 2016, a National Committee on Trade Facilitation (NCTF) under the Chairmanship of Cabinet Secretary has been constituted. The TFA would necessitate simplification of border management procedures and adoption of new transparency measures, all of which are expected to reduce the transaction cost of imports and exports and facilitate smooth movement of goods across borders. CARGOTALK brings to you the customs brokers’ role in trade facilitation.
Samir J Shah, Partner, JBS Group of Companies states, “The Indian customs broker is a very underestimated and under respected professional. He is the most knowledgeable stakeholder in the entire ex-im change and the true link between all the various stakeholders. The Indian customs brokers not only interact with all agencies on behalf of the ex-im trade but also extend their services to resolve issues with foreign consulates. The Indian Customs Broker has played a very
The Indian customs brokers not only interact with all agencies on behalf of the ex-im trade but also extend their services to resolve issues with foreign consulates
The Indian customs broker is adaptable and agile. All those who can recognise the basic changes would survive the present tumultuous times Human interaction and intervention is coming down and hence all issues have to be addressed with the help of technology
crucial role in TFA promotion. A very active dialogue with many government agencies is a very passionate activity of the Indian Customs Broker.” Sudip Dey, Vice President, Calcutta Customs House Agents’ Association & Vice Chairman, FFFAI, says, “Indian customs broker thinks more on behalf of the ex-im trade than themselves. Most of the issues we represent, seeks to make the life of the importer/ exporter easier. In fact, most of the facilitation measures that the government is coming up with has been received from the customs broker fraternity only.” Sharing the contribution of custom brokers in trade facilitation, Harpreet
Singh Malhotra, CMD, Tiger Logistics, says, “The plumbing of international trade by implementing efficient trade rules and regulations in a major way was completed by customs brokers in India. This contribution could be understood well as a result in an overall improvement of trade performance of our country by the help of trade infrastructure. This also complements overall trade promotion and refers to reducing all the transaction costs which are associated with different kinds of enforcements. According to S Ramakrishna, Director, Balaji Mariline, “There are no service providers who have better understanding on the subject of ex-im trade in terms of policies and procedure of commerce and industry, taxation including GST, E way bills and its rules, apart from the requirement of various allied agencies.” “Customs brokers make borders work,” believes, Sanjam Sahi Gupta, Director, Sitara Shipping. “By managing data, relationships and complexity, customs brokers plus customs modernisation directly supports trade facilitation,” she adds.
Rajesh Verma, Director, AR Shipping, tells, “Customs Brokers act as intermediaries between ex-im trade and customs in the clearance process of goods. They are the professionals who with broad knowledge of customs law, customs tariff classification, customs tariff schedule, ex-im policy, allied acts, shipping knowledge handles not only the documentation but also coordinates with different participative government agencies and custodians for smooth and trouble-free clearance of goods. When India has gone for the biggest change in tax system
and entered the GST regime, it was the customs brokers fraternity which was first point to handle documentation for customs clearance with all relevant GST provisions. Customs brokers professional handling of customs clearance in required time frame helped Indian exporters and importers to meet their delivery schedules.” Roadblocks & government participation Commenting on the challenges that need to be addressed either by government or industry stakeholders, Malhotra notifies, “In India, a plethora of issues related to trade facilitation continues to persist, even as the government has been introducing reforms for last several years. This is evident from a number of reports and studies that highlight the large scope of improvement for India in trade facilitation. The integration of the domestic economy through the twin channels of trade and capital flows has accelerated in the past two decades which in turn led to the Indian economy growing from ` 32 trillion (US$ 474.37 billion) in 2004 to about ` 153 trillion (US$ 2.3 trillion) by 2016. Simultaneously, the per capita income also nearly trebled during these years. India’s trade and external sector had a significant impact on the GDP growth as well as expansion in per capita income.” On the other hand, Dey believes, “The industry should put their heads into trying to figure out why the customs clearance process is taking more than 10 days when it can be done within two days. It has been seen that most of the time the cargo is pending in the hands of other stakeholders like importer, port, CFS & shipping lines. Here, the improvement is vital.” According to Shah, quality of the software and the connectivity issues and mindset changes with capacity building would be the top challenges. “However, the government is working on many issues and most of them would change the basic assumption on which we have acted over the last six decades,” he adds. Adding to this, Verma says, “At this juncture with ongoing customs reforms, customs brokers are required to adopt more comprehensive and advisory role, rather than limiting themselves to merely filing documents for customs clearance. In the past year, government has very strongly shown their intent of bringing ‘ease of doing’ in business and depending more on strengthening their EDI system by introducing Digital Signatures for users for filing documents, adopting SWIFT i.e. Single Window interface for participative government agencies, use of RFID seals for selfsealed containers, and now eSanchit programme for filing of documents
When India had entered the GST regime, it was the customs brokers fraternity who were first point to handle documentation for customs clearance with GST provisions The plumbing of international trade by implementing efficient trade rules and regulations in a major way completed by customs brokers in India
with PDF attachments and replacing the paper documents. The challenge for the government is to train their own field formations to adopt these programmes faster though customs brokers were always quick to upgrade themselves as required. The helpdesks of ICEGATE still need to respond quicker and in much better way. Other most important challenge is faster connectivity to gateway ports with hinterland ICDs though more and more operators are becoming operational but as the exports are stagnant and not growing as per government plans and target, the presence of more logistics players is only resulting in more time to connect to gateway ports because they are not able to complete their required loads to move trains.” “The only challenge is that Ministries other than the Finance and Commerce is not in sync with the customs. EPR is the biggest challenge today, apart from BIS where the primary product does not require BIS, however attachments for example adapter are being insisted upon though it is incorrect,” highlights Ramakrishna. Expressing contentment from government side, Dey says, “The government is all out in trade facilitation as a policy as per their commitment to WTO. However, this message has not been fully embedded in the minds of the field formations.” “The trade facilitation implementation in India has been a good symphony between the bureaucracy; the legislature and the private sector. This is the first time I have noticed that all the three are working at the same pace with the bureaucracy leading the change,” adds Shah. “Regular trade facilitation meetings at all Commissionerate’s are taking place and all deliberations are taken positively and necessary steps are taken to resolve the issues, if any. More and more steps taken by government on relying and strengthening EDI system shows the seriousness of government for raising level of ‘ease of doing’ business,” Verma added. “The government of the country has at the highest level have redressal committees including National committee on trade facilitation headed by Cabinet Secretary to Commissioners level at various custom formation. The Custom formation level meeting is also sent to the board where based on the observations good measures have been implemented. One of the best example is the GST refund for the exporters. The refund process were delayed due to mistakes which happened at the exporters end were resolved by the government.” informs Ramakrishna.
Future of customs brokers
“The Indian customs broker is adaptable and agile. All those who can recognise the basic changes would survive the present tumultuous times. It is a time for new dimensions and a readiness to adapt and accept what seemed impossible a few years ago,” emphasises Shah. “When you are dealing in the business of import and export, you certainly have to make sure that the goods that you are importing overseas do not fail to conform to all the terms and conditions of international transportation of supplies. It is mandatory for you to fill many forms, in due course, that validate the required certifications including sanitary certificate, permits, etc. You cannot handle all these formalities completely on your own. So here the role of a professional customs broker comes into play. And to ease yourself from all these burdens, you surely need to take help of customs brokers who is much more thorough than you with all the rules and regulations of ex-im,” shares Malhotra. “The traditional role of customs brokers and freight forwarders is being revamped to cater to the requirements of complete logistics services. India is aiming to increase its share in global trade and exports through various initiatives like, ‘ease of doing business’, hence, the role of the customs broker cannot be ignored. They play a vital role in the success of programmes such as ‘Single Window Clearances’ ‘Digital India’,” opines Gupta. “The customs broker has huge and very optimistic scope in India and with fast changing government policies; trade requires the well informed custom brokers to handle their business. The system is becoming more transparent and ex-im trade can see the processing of their documents sitting in their offices,” adds Verma. “However, customs brokers have to be tech savvy. Human interaction and intervention is coming down and hence all issues have to be addressed with the help of technology. Therefore, those who do not use technology they shall not be able to give satisfactory service to their clients,” points Dey.
Sanjam Sahi Gupta Director Sitara Shipping Customs brokers make borders work. By managing data, relationships and complexity, customs brokers plus customs modernisation directly supports trade facilitation S Ramakrishna Director Balaji Mariline There are no service providers who have better understanding on the subject of ex-im trade in terms of policies and procedure of commerce and industry, taxation, E way bills and its rules