Implementation of the Trade Facilitation Agreement (TFA) of the World Trade Organisation (WTO) will bring down the cost of exporters by up to Rs 15,000 per 40 equivalent units (TEU) of container, a senior Central Board for Excise and Customs (CBEC) official said here today.
TFA, which facilitates movement of goods, including release and clearance of goods which are in transit, was ratified by 110 or two-thirds of members of the 164-member WTO on February 22 and came into operation forthwith.
"Implementation of various articles in TFA will bring down the costs of exporters (by) up to Rs 15,000 per 40 TEU of container, increasing the competitiveness of Indian exporters immensely," said Beni Bhattacharya, principal commissioner of customs, CBEC, at a CII conference on TFA.
It would improve ease of doing trade in the county, and result in savings of about Rs 10,000 per 20 TEU and Rs 15,000 per 40 equivalent unit container each, he said.
The agreement simplifies the paperwork and transforms all transactions into electronic format and sets global standards in processes and procedures.
"India will implement these provisions, including the single window and risk management systems (RMS) for which it had sought five years breather from WTO, over the next two years," he said.
WTO estimates put the gross benefits of TFA at 130 per cent ad valorem of tariffs in developed countries, and 200 per cent ad valorem of tariffs levied in developing and underdeveloped countries.
India is more interested in TFA in services sector given the share of services at 60 per cent of the country's GDP.
"This (TFA) will increase voluntary compliance on the part of exporters and importers. TFA will impart predictability of movement of goods, enabling importers and exporters to give commitments to their trade partners in other countries," he said.
India is ranked very low, at 143, in the World Bank study in international trade facilitation in 190 countries.
Seema Jere Bisht, additional director general, risk management division, directorate of revenue and intelligence, CBEC, said that India's ranking was low also because the industry is not giving regular feedback to CBEC or World Bank.
"World Bank study team visits only Mumbai and Delhi for feedback and as such it does not reflect the true state of affairs. If every company sends its feedback then India's ranking will certainly be better," she said.
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