Exports documentation gets easier

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Bikky Khosla | 17 Mar, 2015
Documentation is one of the most nettlesome issues for exporters. It is no less than a nightmare for starters. Additionally, long hours of waiting, high costs, irritating haggling with unresponsive officials and anxiety involved with documentation can make your life much more difficult. From days of yore it has been thus, but now it seems things may change in the coming days. In a breather to the exporter community, the DGFT has recently reduced the number of mandatory documents required for import and export of goods to three in each case.

In the World Bank's 2015 'Doing Business' report, India ranked 126 in 'Trading Across Borders" component of 'Ease of Doing Business'. It points out that Indian exporters need to collect 7 types of document, including Bill of Lading, Commercial invoice, Foreign currency exchange form, Packing list, Shipping Bill, Technical standard certificate and Terminal handling receipts. The document preparation takes 7 to 8 days on average and costs around US $365. Similarly, import documentation involves 10 types of document, an 8-day waiting period, and costs around US $400.

However, with the changes notified last week, the number of mandatory documents required for export and import has been cut to three in each case: (i) Bill of Lading/Airway Bill, (ii) Commercial Invoice cum Packing List and (iii) Shipping Bill/Bill of Export for exports, and (i) Bill of Lading/Airway Bill, (ii) Commercial Invoice cum Packing List and (iii) Bill of Entry for imports. Exporters and importers, however, have the option of filing separate 'Commercial Invoice' and 'Packing List' also, if they so desire.

The move will help the exim community in a great way by reducing time as well as transaction costs. The effort of the Inter Ministerial Committee in this regard is praiseworthy. I think this initiative could have been taken much earlier and hope other such measures will follow soon. In his Budget speech, the finance minister proposed several measures including setting up of an expert committee to prepare a draft legislation for obtaining regulatory clearances expeditiously. I'm eagerly looking forward to some more concrete steps to improve the ease of doing business.

Meanwhile, our exports in February plunged 15% y-o-y, following an 11.2% decrease in January. So, the Centre should make no further delay in detailing a foolproof strategy for foreign trade. In the Union Budget, there was no mention of specific sops for the sector and I hope the forthcoming FTP will address the woes of the community. In addition, I think the export diversification strategy needs to be pushed further and sector specific measures should be introduced to lift exports from sectors like agri, jewellery and textiles which have been witnessing decline for some time now.

I invite your opinions.