With the implementation of the mutual recognition agreement, goods exported by Indian AEOs will enjoy enhanced trade facilitation at all ports of entry in the US
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NEW DELHI :
NEW DELHI: India's Central Board of Indirect Taxes and Customs (CBIC) and the US Customs and Border Protection have agreed to extend greater facilities to exporters, from each other’s country, who meet certain compliance criteria.
This was agreed upon as part of a mutual recognition agreement by the two agencies of the authorised economic operator (AEO) programme, a scheme that allows certain privileges to players in international trade that are accredited by authorities based on their track record. Privileges include greater trust in declarations, besides faster tax refunds and expedited adjudication of disputes.
CBIC, in an update on Monday, said the agreement was concluded at a virtual meet last week. “With the volume of trade with the US being over $80,000 million in the year 2020-21, this initiative is further expected to give a positive thrust to trade. With the implementation of the mutual recognition agreement, the goods exported by Indian AEOs will enjoy enhanced trade facilitation at all the ports of entry in the US," CBIC said in the update.
In international trade, AEOs are entities approved by customs authorities as compliant with supply chain security standards, based on documentation and other forms of verification. This voluntary scheme is open to importers, exporters, logistics providers, custodians or terminal operators, custom brokers and warehouse operators. AEOs’ self-declaration of origin of goods is also accepted.
CBIC said the development was significant in light of Prime Minister Narendra Modi’s call to achieve $400 billion worth of exports during this year. Cross-border trade is a crucial part of economic recovery of many countries, including India. New Delhi is also offering incentives to boost local manufacturing and build infrastructure.
During the pandemic, the indirect tax authority stepped up digitisation of trade related paperwork to reduce physical interface between people and to improve ease of doing business. Cross-border trade was one of the areas that the World Bank had highlighted where India needed to usher in reforms to improve its overall ease of doing business score.