According to two officials, the government is expediting the implementation of two agreements signed with the US and the UAE to facilitate trade and boost the number of exporters and allied service providers benefiting from them. The focus is on achieving full effect for mutual recognition of a significant trade facilitation scheme for authorized economic operators (AEOs) in India and their counterparts in the partner-countries, while also expanding the coverage of beneficiaries. These mutual recognition agreements (MRAs) with the US and the UAE are being tested through a pilot program.
An authorized economic operators designation is granted to trusted merchants and entities involved in international trade who comply with supply chain standards and security norms. Currently, India has bestowed the AEO status on approximately 5,680 importers, exporters, logistics providers, custom brokers, and warehouse operators. The US has a similar program called the Customs-Trade Partnership Against Terrorism (C-TPAT) managed by the US Customs and Border Protection (CBP) department.
Once these deals are operationalized, customers of Indian businesses in the US and the UAE will receive various trade privileges, such as priority customs processing, lower inspection rates, and acceptance of self-declaration of ‘origin of goods.’ Similarly, accredited merchants in these partner-countries will receive similar privileges at Indian ports.
Over 700 Indian AEO businesses export to the US and stand to benefit from the mutual recognition of the schemes. Naveen Kumar Jain, principal commissioner at the Directorate of International Customs (DIC) in the finance ministry, highlights the progress made in the AEO program, aiming to surpass last year’s track record by adding more AEOs in the current year.
To gain AEO accreditation, all documentation can be filed online, and the DIC is engaging with the trading community to encourage greater participation in the program and to finalize reciprocal arrangements under the mutual recognition agreements.
India has already operationalized a mutual recognition deal with South Korea, and discussions are underway to explore a similar deal with Russia. These efforts to ensure expedited clearances at ports come amidst a slowdown in merchandise exports due to a global demand decline. In June, India’s merchandise exports contracted by 22% compared to the same month the previous year, reaching $32.97 billion, as reported by official figures.
Despite attempts to seek comments from the finance ministry, responses were not received at the time of publishing.
