In a world of rapid technology adoption, a whole lot has been digitised. Meanwhile, it is also essential to shape the future of digital economy. Being empowered by the new forms of digital commerce is the latest economic imperative. It diminishes barriers and creates growth opportunities.
The Fourth Industrial Revolution project deploys public-private alliance to implement digital trade, as the international trade has always relied on paperwork. Even for most of the regulatory activities associated with trade apart from the financial and commercial documents, there has been put significant emphasis on paper-based reporting. The initiative of Digital India has been taken primarily to reduce the dependence on paper for international trade, and to streamline both governance and monitoring of trade transactions.
This e-trade initiative covers these key objectives:
- Electronic filing to customs authorities and airports/seaports, etc of import and export documents by the imports and exporters.
- Electronic delivery of services provided to exporters, importers and customs agents by the airports, seaports and customs.
- Electronic payment of charges like custom duties, licence fees etc.
The Digital trade policy framework by the Fourth Industrial Revolution project includes:
- Direct and shape the policies related to digitization of trade and cross-border data that flows nationally, regionally and globally and other e-commerce trade activities.
- Offering insights, supporting and building capacity for policy-makers to comprehend cross-border data flows and to deal with the swift technological changes in digital trade.
- Promoting practical solutions and generating global thought leadership to advance inclusive growth and to sustain improvement in digital trade.
- To model the trajectory of the advanced technologies and discover tangible economic and social impacts by designing and implementing Fourth Industrial Revolution pilot projects.
A kickstart was made towards this with e-BRC and ICEGATE, which was expanded to include more trade activities in the EXIM process.
For the fact that the export data was made available in the electronic form in DGFT’s, EDI system, but the realisation data was available only in the physical form, the initiative of the primary driver e-BRC was taken. Moreover, the exporters, in order to claim benefits used to submit this physical ‘realisation data’, which was difficult to be integrated into the EDI system as it was prone to errors or causing delays.
For any exporter, managing and retaining the BRC documents was definitely a big task because the documents were of great importance and any loss or damage had its own consequences.
For the task to be much simpler, the e-BRC launched all the data in electronic form, making it available in the system. Now it has access to be downloaded, printed or even stored in the electronic media, providing coherent integration of realisation data with shipment data, thereby streamlining settlement process and the export benefit reconciliation.
EDPMS- In April 2014, RBI implemented Export Data Processing & Monitoring System (EDPMS) to integrate the data flow between stakeholders in the export process which plugged a major gap in reporting and reduced paperwork.
IDPMS- Later on, in Oct 2016, there was a similar system implemented for import transactions named IDPMS Import Data Processing & Monitoring System. It worked similar to EDPMS but for imports, there were other implementations and changes made in accordance with FEMA and provided stringent monitoring of import settlements.
Imports proofs are available electronically: With all the required shipment data and the exports and imports settlement data made available in the electronic form, it is also essential to make other regulatory documents like Shipping bill make Bill of Entry available online.
Subsequently, the Reserve Bank of India has directed the banks not to insist on a hard copy evidence of import documents from Dec 01, 2016 and make settlements of transactions by using the data available in IDPMS to match off remittances with imports, as it has issued directions vide A.P. (DIR Series) Circular No. 27 dated Jan 12, 2017).
Therefore, the importers will now have details such as the port code and BoE date to his AD in order along with BoE number (issued by customs at the time of clearance of goods) to make settlements of an advanced payments or to settle the import with outward remittances. The AD will do the necessary processing by extracting the details of the Bill of Entry from the system. The bank is also burdened with issuing a printed acknowledgement to the importer to keep in conformity with the Circular and provide it as an evidence or to list any unsettled portion of remittance/import.
With all this processing, Bill of Entry, the crucial regulatory document gets digitized to simplify and ease the trouble caused for a lot of importers.
Get your Shipping Bills Digitally:
It is made clear that the physical Shipping Bill is of no major use now, stated by: Customs Circular of Nov 23, 2016. Now, going fully digital for Shipping Bills and Bill of Entry will systemize document handling and reporting activities to a very large extent. The only exception is provided to the non-EDI ports, this area is left out and focus is required to ensure there are no gaps.
Minor issues to be resolved:
Presently, there is access to EDPMS and IDPMS platforms provided to multiple stakeholders in the international trade ecosystem, viz., RBI, DGFT, Customs authorities, and Authorised Dealers. But on the other hand, for the exporters & the importers dealing in very large quantities, the biggest stakeholders are not accessible to these systems.
It would be helpful to the exporters and importers if access is provided to view the data pertaining to them in these systems.
Few cases are found where there is no update available on EDPMS even after the submission of realisation details for export bills to banks by the exporters. Meanwhile, there are no facilities for the exporters to verify independently if all the details are captured correctly by the bankers. This assumes more prominence now, considering that a Shipping Bill that remains unsettled for about two years could be automatically caution-listed. This would definitely end up with the exporters paying the prices for bottlenecks at the AD banks
There can be similar situations found for imports as well.
An access where the importers and exporters are allowed to download and view data relating to his/her IE code would aid in sorting such issues. This would also pave the way to leverage the benefits of these systems to the possible extent.
For exporters especially, this should help them have a consolidated view of all Shipping Bills in their names which provide information with reference to the status (settled/unsettled/partially settled). Importers should also be able to view the BoEs raised by them, other outstanding bills if any, and the advance payments done on bills. If these issues are addressed, there will be significant contributors.
Future of digital trade:
Laying the foundation of digitally enabled trade is what India is looking forward to. Since the process is much more simplified, there is no need for the importers to undergo the trauma of the physical processes.
All the activities can digitally aid to improve the productivity of businesses, and raise levels of innovation and competitiveness which leads to increased opportunities for international trade.