Seeds of growth

New Delhi, July 4: India needs to undertake adequate trade facilitation measures to become globally competitive, says a study conducted by the Confederation of Indian Industry (CII).

According to a study on the ‘potential consequences and benefits of implementing a multilateral approach to trade facilitation’, a lot of work has to be done on simplification of export and import procedures and modernisation of customs to move to a paperless system. It also calls for improving port logistics.

“Despite major trade liberalisation since 1991, administrative procedures regarding export and import are probably the most complex and irrational. This is proving to be a major irritant for new global players,” says CII.

The current performance of clearance of cargo at ports and airports are well below global norms. According to statistics available, Delhi airport takes 2.5 days to clear goods for exports, while the norm is less than 12 hours. Similarly, it takes 15 days to clear import cargo, while the norm is less than 12 hours.

The study also points out that the export dwell time for sea freight in Mumbai is 3-5 days, while the norm is less than 18 hours. Similarly, import dwell time is 7-14 days, while the international norm is less than 24 hours.

“The premier entry points — Delhi and Mumbai — perform far below international norms and reforms should be carried out urgently,” says the chamber.

The industry body has called for immediate use of electronic media for trade facilitation by implementing electronic data interchange (EDI) in all major custom points.

The study says India should immediately work on creating online single-window inquiry point. This will reduce information cost of trade in India. “As of now there is no officially designated inquiry point for traders,” says CII.

There is also a need to evolve some kind of mechanism, whereby minor disputes in terms of valuation and assessment are dealt with expeditiously.

To meet the international standards set by revised Kyoto convention, India will need to implement several reforms in the area of customs administration. These involve upgrading the existing EDI system and incorporating latest technology for online payment of duties.

In its pre-budget memorandum, the CII had favoured the imposition of cess rather than a hike in taxes to raise funds for specific purposes.

One of its suggestions was the imposition of a 5 per cent across-the-board cess on passenger fares to create a railway development fund.