The government is aiming to digitalise the entire customs process by April 2026 and bring more departments on board the single window interface for facilitating trade (SWIFT) portal to expedite the clearance procedure, official sources said.
“The aim is to enhance ease of doing business for importers and exporters, and reduce the turnaround time for trade,” an official said. “We expect all the remaining processes to be automated within two years…it should be done by April 2026,” the official added.
Earlier this year, revenue secretary Sanjay Malhotra had said that the customs department was developing a fully automated trade interface system — ‘Customs 2.0’. This was being done as the government aimed to improve its ranking in the World Bank’s Logistics Performance Index (LPI), he had said.
Out of 139 countries, the LPI had placed India on the 47th spot in 2023, down from 40 in 2018. “Our current ranking underscores a significant opportunity for improvement,” Malhotra had said. “All payments, all interfaces with trade need to be automated so that everything is available at the click of a button,” he had stated.
The digitalisation of customs clearance ensures paperless trading, enabling traders to submit clearance documents online along with supporting documents instead of maintaining physical papers. The digitalisation of processes done so far has reduced transaction cost and turnaround time for trade, say experts.
A recent report by the Central Board of Indirect Taxes and Customs said that for imports, out of the 15 ports surveyed, nine have witnessed a reduction in the average release time in 2024 vis-a-vis the previous year. And for exports, the time taken for regulatory clearance of cargo reduced markedly for inland container depots and air cargo complexes.
Presently, in the customs process, SWIFT allows importers and exporters to submit their clearance documents online at a single portal; ‘Turant Customs’ streamlines export approval process; ‘E-Sanchit’ allows traders to upload all supporting documents digitally for obtaining clearance, and ‘ULIP’ connects different logistics systems and facilitates communication between them. Sources said a single portal, which integrates all these separate portals, is in the works and likely to be operational within two years.
Jitendra Motwani, partner, Economic Laws Practice, said digitalisation measures have streamlined operations, which in turn helped reduce human-induced errors and inefficiencies. “For customs administration, further digitalisation will achieve a balance between facilitation of trade and enforcement of regulations,” he said.
Experts also suggest that the customs department should come out with an enabling module for its trade facilitative schemes for online compliance. An example in this regard could be enabling online bond-to-bond transfer for Manufacture and Other Operations in Warehouse (MOOWR) units which shall help the exporter to close the bond at the port of entry, online, once the product is exported. This is done manually at present.
Another aspect to be addressed is regarding the licences needed to avail benefits under the Export Promotion Capital Goods (EPCG) scheme. Currently, manufacturers who import capital goods at zero duty for exporting the finished goods under the scheme need to maintain many licences, but there is no comprehensive digital portal to track their validity. “That feature should be added to obviate the burden of monitoring and tracking compliances for an EPCG license which spreads over a period of 6 years,” said Pratik Jain, partner, PwC India.
Moreover, Jain suggests that the customs compliance data should be integrated with the company’s enterprise resource planning (ERP) systems, as is the case under GST. The compliance time and costs of companies will reduce in this case.
The ERP, in simple words, is a software that efficiently manages all the core business processes of an organisation in an integrated system. Core processes include: finance, HR, manufacturing, supply chain, etc.