Technology has an important role to play in simplifying and fast-tracking customs procedures at ports by ensuring efficiency, transparency and accountability. India is not only aiming to meet the requirements of the World Trade Organization’s Trade Facilitation Agreement (TFA) which came into force in 2017, but also to become a global manufacturing hub by improving ease of doing business. Many of the goals listed in India’s National Trade Facilitation Action Plan, drawn up to fulfil national commitments under the TFA, go beyond the TFA provisions. As a result of the technological initiatives taken by the Central Board of Indirect Taxes and Customs (CBIC) to promote ease of doing business, India has witnessed a significant jump in its ranking in the World Bank’s Ease of Doing Business Index under the “Trading Across Borders” parameter. India has jumped 78 ranks in two years, from 146 in 2017 to 80 in 2018 and then to 68 in the 2019 ranking. Besides, the country’s largest customs house, the Jawaharlal Nehru Custom House (JNCH) has always kept itself a step ahead in terms of ensuring smooth trade.
Recent CBIC initiatives
The CBIC embraced information technology (IT) fairly early and has a range of IT-enabled services today that are hosted at its centralised IT infrastructure set up. Initiatives such as the introduction of an electronic messaging system between shipping lines and custodians for electronic delivery orders, provisions for online filing of declarations through digital signatures and launch of Customs SWIFT (Single Window Interface for Facilitating Trade) clearances to enable importers/exporters to file a common integrated electronic declaration on the ICEGATE (Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange [EC/ EDI] Gateway) portal, have been simplifying customs procedures for a number of years now.
Dwelling on some of the recent initiatives, it is worth noting that in February 2019, the CBIC introduced the Electronic Cargo Tracking System (ECTS) for Nepal-bound shipments from Kolkata and Visakhapatnam ports. With this initiative, containerised rail cargo carrying third-country imports for Nepal via these ports will no longer require clearance by the Indian customs authorities. The ECTS is an electronic seal that, unless tampered with, ensures free container movement through the country’s international borders. It has been introduced on a pilot basis on rail routes from Kolkata/Haldia to Birgunj via the Raxaul Land Customs Station (LCS) and to Biratnagar via the Bathnaha railway station and the Jogbani LCS. A similar facility for Nepal-bound transit cargo was introduced on a pilot basis in August 2018 from Visakhapatnam port. Customs officials have also issued a notification giving permission to Beypore port to make use of the EDI facility at Karipur airport for transport of cargo from other countries.
In November 2019, the CBIC launched a new IT initiative – ICEDASH, which is a dashboard for monitoring ease of doing business and helps the public see the daily customs clearance times of import cargo at various ports and airports. With ICEDASH, Indian customs has taken a lead globally to provide an effective tool that helps businesses compare clearance times across ports and plan their logistics accordingly. The dashboard, developed by CBIC in collaboration with the National Informatics Centre of the Ministry of Electronics and Information Technology, can be accessed through the CBIC website. ICEDASH has enabled e-paperwork, whereby all procedures ranging from filing papers for clearance to making GST payments have come online. Apart from this, the introduction of IT-enabled dashboards has also helped in reducing the corruption rampant in customs offices across the country.
Further, on February 6, 2020, the CBIC introduced machine-based automated clearance of imported goods. Under this, the customs officer will be able to undertake all compliance verifications such as examination of goods even before duties are paid, and once the importer pays the duty, the customs system will automatically give a clearance or “out of charge” to the imported goods. The new initiative has been launched as a pilot at two ports, Chennai and the Jawaharlal Nehru Port Trust (JNPT), and will soon be rolled out at all the ports across the country. On the one hand, the new initiative will speed up the customs process as there will be no waiting time for duty payments, while on the other, it will give additional time to the importer who will now be able to pay the duties even while the goods are being verified by the customs officer.
As a part of its next-generation reforms, the CBIC has also introduced Turant Customs to further improve ease of doing business. The new reform is a comprehensive package of various elements that will be implemented over the next few months. As part of the reform, the CBIC has proposed the restructuring of the existing commissionerates into national assessment commissionerates and jurisdictional port commissionerates, where the former will be virtual, with an all-India jurisdiction and comprise a cluster of faceless assessment groups, while the latter will set up “TurantSuvidhaKendras” for facilitating customs clearances. Faceless assessment will bring anonymity in assessment and cut out the physical interface between the assessing officer and the importer/broker to the extent technologically feasible. This will ensure uniformity in assessments across the country and thereby reduce transaction costs and uncertainty among the trade.
Technology initiatives by JNCH
The JNCH has been at the forefront of implementing various trade facilitation measures defined by the CBIC as well as taking innovative local initiatives to improve ease of doing business. As a result of its technological initiatives, its all-in-one average release time for imports has improved significantly over the years. Meanwhile, the government is considering implementing blockchain, machine learning and artificial intelligence (AI) technologies to further reduce clearance time from 12 hours to 12 minutes. Acclaimed as a futuristic reform that will allow perceived risk-free release of consignments, machine clearance will initially be implemented for 3,800 select importers accredited with the customs department under the authorised economic operator scheme and for those who have a good compliance history. The department also plans to use image scanners for cargo that does not pass initial machine clearance and keep the data as intelligence for future reference. This will be executed via the blockchain technology. Besides, the government is also considering electronic seal (e-seal) at the factory level, wherein each container would be tracked from the factories to the ports, allowing for automated clearance. The initiatives are expected to eliminate these need for physical documentation and allow reallocation of the workforce.
Summing up
The technological initiatives taken by the CBIC have played an important role in enhancing the efficiency of India’s customs procedures. Moreover, the digital interventions planned by the JNCH are expected to provide a further boost to trade and customs facilitation. The ongoing COVID-19 crisis too has created a need for further digitalisation of port operations and customs procedures. In this regard, the Ministry of Shipping has sought the Ministry of Commerce and Industry’s intervention for issuing an advisory for recognition of electronic trading documents in place of manual trade documentation still required by many departments including customs, in order to ensure smooth cargo operations at ports. The government is also fast-tracking a plan to implement an electronic bill of lading as it looks at ways to facilitate business continuity by removing hurdles in the trade documentation process in a post-COVID world, where the current hard copy-based format could pose a huge risk to the smooth flow of export-import goods. Going forward, the customs authorities are planning to introduce comprehensive digitalisation of export/import transactions and leverage radio frequency identification-based technology to improve India’s export logistics. Mandating the customs authorities to adopt and accept electronically generated trade documentation is expected to help ease the economic and human challenges, encourage continuity of trade and also enable trade revival in the future.