The Centre is considering a proposal to shift the entire Directorate General of Foreign Trade (DGFT) office to the Department of Revenue (DoR) from the Department of Commerce (DoC) — as part of measures to simplify processes relating to export and import.
The suggestion — billed as a major trade facilitation measure and in line with the Centre’s ‘Ease of Doing Business’ initiative — was mooted recently by the Central Board of Excise and Customs (CBEC) in the DoR within the Finance Ministry.
The DGFT’s role includes Foreign Trade Policy (FTP) formulation and implementation — to in turn boost India’s exports. It is manned mainly by the Indian Trade Service (ITS) cadre officials, but is usually headed by an Indian Administrative Service (IAS) officer.
IRS officials
If the proposal, that the CBEC put forward in a recent inter-ministerial meeting convened by the Cabinet Secretariat, is accepted, the DGFT will be placed within the DoR and staffed entirely by Indian Revenue Service (IRS) officials, official sources told The Hindu .
To enable an IRS official to head the DGFT, a new post — Principal/Chief Commissioner (Foreign Trade) equivalent to Additional Secretary to Government of India (the rank of the official currently heading the DGFT) — will be created, they added. The proposal will be taken up again soon, most probably in the first week of July.
This development follows the DoC recently seeking to hive off non-core areas including FTP implementation. This is to better utilise the DoC’s resources (including ITS cadre officials) in ‘core focus areas’ such as FTP formulation as well as in India’s trade negotiations.
The DoC wanted to retain the DGFT as an office attached to it for FTP formulation.
The CBEC, however, is learnt to have said that it was getting several complaints from those in the foreign trade sector saying the current division of trade facilitation-related work between DoC and DoR was resulting in ‘red tapism’ and delays.
Trade facilitation
Therefore, to ensure greater ease of doing business, it will be better if the entire trade facilitation work is brought under a single interface, the CBEC said. India is currently ranked 130th out of 190 countries in the World Bank’s (ease of) Doing Business report (2017) and further lower at 143rd when it comes to ‘trading across borders’.
The shifting of DGFT office would require amendments in the concerned laws — the Foreign Trade (Development & Regulations) Act and the Customs Act. Another factor that could strengthen the CBEC's proposal is that it (CBEC) currently houses the Secretariat of the inter-ministerial National Committee on Trade Facilitation (NCTF), which was established in August 2016, consequent to India ratifying the WTO's Trade Facilitation Agreement (TFA) in April 2016.
The TFA has provisions to help ease flow of goods across borders. The pact has measures to ensure effective cooperation between customs and other concerned authorities on trade facilitation and customs compliance issues.
The NCTF is chaired by the Cabinet Secretary and comprises Secretaries of the departments concerned with trade issues including DoR and DoC.
It also has the CBEC Chairman, the DGFT and Railway Board Chairman as Members.
