Deal with Australia done, India eyes customs pact with more nations
Informist, Monday, Apr 8, 2024
By Priyasmita Dutta and Sagar Sen
NEW DELHI – After months of deliberations, India and Australia recently signed a cross-border trade facilitation deal--a customs pact--to enable faster clearance of shipments for mutually recognised trusted companies and traders from the two countries, a senior finance ministry official said. "We are in advanced stage of discussion with New Zealand while also negotiating with over dozen other countries," the official told Informist.
Under the agreement, the two countries will issue mutual recognition agreement licence to trusted companies and conglomerates to carry out bilateral trade. These identified companies get preference at the time of customs clearance and other regulatory leeway. Prior to the pact with Australia, India had similar agreements with five countries, including the US and the United Arab Emirates.
According to latest available data, in the first 10 months of 2023-24 (Apr-Mar), India's total exports to Australia were around $7 bln while imports were around $14 bln. The total bilateral trade between India and Australia was about $26 bln in 2022-23, which included exports worth $7 bln and imports worth $19 bln.
With New Zealand, however, India's total trade is much lower. In Apr-Jan of 2023-24, India's imports from New Zealand were around $285 mln while exports were to the tune of $442 mln. In 2022-23, India's total trade with New Zealand was about $1 bln, which included exports worth $548 mln and imports worth $478 mln.
The government has been negotiating for a similar agreement with Russia as well and was set to sign the pact in October, the official said. However, the signing of that agreement faced a few snags, he said. Russia was India's fourth-largest trading partner with total bilateral trade of $49.3 bln in 2022-23 which included exports worth $3.1 bln and imports worth $46.2 bln. In Apr-Jan of 2023-24, India's total imports from Russia were a whopping $51 bln while exports were $3.4 bln.
Besides the US and the UAE, India has similar pacts with South Korea, Hong Kong and Taiwan. "India is negotiating with a dozen other countries, including the eight-nation East African Community and South Africa. We are also negotiating with Japan," the official said.
The benefits that accredited merchants and companies get under these schemes include priority customs processing, lower inspection rates and acceptance of self-declaration of origin of goods, which is a vital certificate for cross-border trade. The push for these agreements is in line with the government's thrust on expanding its footprint in global trade and diversifying its trade partners.
This cross-border trade facilitation for customs clearance is different from a free trade agreement. The government has set an ambitious total exports target--including merchandise and services--to touch $2 trln by 2030. End
