KOLKATA: Exports to Bangladesh through Petropole land port are facing delays in clearances from regulatory authorities such as customs resulting in very high transaction costs making Indian shipments uncompetitive, EEPC India has said.
In a presentation to the government, the EEPC India (earlier known as the Engineering Export Promotion Council) said that shipments are sent regularly to Bangladesh through Petrapole land port. These consignments are often facing delay for clearing due to over burden, holidays etc leading to heavy transportation detention charges being levied on them. The "unwarranted expenses" are usually transportation detention charges. Different exporters have reported different costs on this count. According to one assessment, these expenses were Rs 700 per day and are now Rs 800 per day. In that case, the detention time in the recent supplies is 8-10 days which is Rs 6,500 - Rs 8,000 for the whole consignment.
"The solution lies in round the clock 24X7 land port facility and this needs to be upgraded," EEPC India chairman Aman Chadha said. According to the EEPC India presentation, for shipments to Bangladesh by Barge, the current practice is that for each shipment, Customs commissioner's permission is required. It is suggested that the current practice be done away with as it is time consuming.
The situation in regard to exports to Nepal is somewhat similar. For shipments to Nepal by road through ICD Birgunj, Raxaul, Sanauli and Jogbani, Customs authorities insists on different kind of furnishing of papers which are not necessary during the time of processing of Bill of exports. The Bill of Exports are allowed to be processed only when materials physically cross the border.
"It is suggested that the Bill of Exports (BOE) be allowed to be processed before the material physically arrives as the BOE is valid till 15 days and no insistence for furnishing of the technical paper called ARE 1 should be made during the time and processing of BOE."
The EEPC said that procedures for exports in general through different ports have become cumbersome. There are approximately about 24 steps required by the exporter from the time of receiving an export order to remitting of Foreign Agency Commission including claiming of export incentives.
"The process takes 6 months at the minimum to complete this cycle. In addition, there are 8 Principal documents, 7 auxiliary documents and 7 regulatory documents. It is estimated that more than 100 signatures are required and about 16 to 18 hrs required approximately completing this process. The total transaction cost as a percentage of FOB value for a medium sized export consignment of around USD 20, 000 would be between 8.89 per cent for shipments closer to the ports and 11.89% for shipments which are from inland cities".
One possible way could be to think of one Single Export Document. Such a system has been tried in many other countries, EEPC India Chief said. It said when exports have been declining despite currency depreciation and the government is battling with the current account deficit, the country can ill-afford delays in shipments and incurring heavy transaction costs.
Source:-economictimes.indiatimes.com
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