India to phase in customs reform through January

India to phase in customs reform through January

The RFID reform is intended to help India make further progress in speeding the flow of goods through the supply chain. Photo credit: Shutterstock

Indian customs plans to roll out the already delayed use of radio-frequency identification (RFID) sealing tags for factory-stuffed exports in stages through Jan. 1, 2018 after a review found many locations lack the necessary capabilities for the digitization program.

The primary issues is with “field formations” that must still set up systems and procedures for handling RFID e-sealed containers, customs said in a trade announcement.

The agency said AEO [authorized economic operator]-accredited shippers already holding the self-sealing mandate are required to start using RFID seals beginning Nov. 8, whereas exporters whose cargo is stuffed under the supervision of customs officials at their sites have until Nov. 20 to switch to the electronic procedure.

Exporters awaiting customs’ nod for self-sealing of containers at their sites can join the program on approval, but those who have already acquired RFID tags conforming to prescribed standards have the option to start the new process immediately, subject to operational feasibility, according to the advisory.

Customs also said it would make sure all locations are equipped with scanner readers and other required assets by Dec. 31 to facilitate a nationwide enforcement of the RFID sealing program, effective Jan. 1.

RFID seals are considered tamper proof and as such, the new method enhances supply chain security. Additionally, as the process eliminates the need for physical on-site inspection by customs officials, it can save shippers on their logistics costs.

“This measure is expected to reduce transaction costs of exporters since they do not have to incur ‘merchant overtime charges’ in respect of such inspection as well as improve the timelines of their exports,” Customs said.

The agency also said the technology-based program has the potential to improve cargo velocity throughout the supply chain from inland points to gateways.

The electronic self-tagging system is expected to have a far-reaching effect on Indian export trade as the government works to further improve its ease-of-doing-business competitiveness after moving up 30 spots to 100 in the World Bank’s 2018 global ease-of-doing-business index published last week.

Thanks to digitization and ease-of-doing-business measures, such as direct gate in and out of cargo, there has been a steady improvement in productivity during the past year at key Indian ports, especially Jawaharlal Nehru Port Trust (JNPT), a fact also highlighted by the World Bank in its report.