India's Pioneering Trade Initiatives with US and UAE to Amplify Export Potential

Boosting Exports with Mutual Recognition Agreements: India's AEO program fosters trade ties with US and UAE, offering trade privileges. Learn more!

Jul 30, 2023 - 13:28
Jul 30, 2023 - 13:29
India's Pioneering Trade Initiatives with US and UAE to Amplify Export Potential
India's Pioneering Trade Initiatives with US and UAE to Amplify Export Potential

In a bid to enhance trade and elevate economic growth, the Indian government is making swift strides to operationalize two groundbreaking trade deals signed with the United States and the United Arab Emirates (UAE). These transformative agreements are set to revolutionize trade processes, extending substantial benefits to authorized economic operators (AEOs) in India and their counterparts in the partnering nations, fostering seamless cross-border transactions. With pilot mutual recognition agreements (MRAs) already in motion, India is poised to take a giant leap towards fostering greater trade cooperation and expanding its global presence.

Authorized economic operators are considered reliable players in international commerce, strictly adhering to stringent supply chain standards and security norms. Presently, India boasts an impressive number of AEOs, totaling around 5,680, including importers, exporters, logistics providers, custom brokers, and warehouse operators.

Similar to India's AEO program, the United States operates its own Customs-Trade Partnership Against Terrorism (C-TPAT), managed by the US Customs and Border Protection (CBP) department.

The operationalization of these MRAs promises an array of trade privileges for customers of Indian businesses operating in the US and the UAE. Expectations include expedited customs processing, reduced inspection rates, and the acceptance of self-declaration of 'origin of goods,' all contributing to a smoother trading experience. Conversely, merchants accredited under these schemes in the partner countries will receive similar advantages while conducting business at Indian ports.

For select categories of AEOs, additional benefits entail the option for deferred customs duty payments, enabling them to leverage a 'clear consignment now, pay later' facility.

The significance of these trade deals was underscored by an undisclosed source who revealed that over 700 Indian AEO businesses are currently exporting to the US, positioning them to reap substantial benefits from the reciprocal recognition of AEO schemes.

Naveen Kumar Jain, the principal commissioner of the Directorate of International Customs (DIC) in the finance ministry, expressed unwavering commitment to maintaining the AEO program's momentum. He emphasized its success in recent years, noting that India added over 1,000 new AEOs in the previous fiscal year, with aspirations to surpass this remarkable achievement in the current period.

To streamline the AEO accreditation process and encourage greater participation, the DIC has taken proactive measures, offering online documentation filing for enhanced efficiency and accessibility for aspiring operators.

Having inked the MRAs with the US in late 2021 and the UAE in June 2023, India has laid the foundation for substantial growth in its trade partnerships. Notably, the country has already successfully operationalized a mutual recognition deal with South Korea, while exploratory discussions for similar agreements with other countries, including Russia, are already underway.

In the face of global demand slowdown, India's swift actions to strengthen trade ties and streamline export processes demonstrate its steadfast commitment to fostering economic growth.

These pioneering trade initiatives are poised to redefine India's position in the international trade landscape, unleashing greater export potential and propelling the nation towards a more prosperous future. As the country looks forward to reaping the rewards of these visionary partnerships, the global economic community eagerly watches India's ascent into a thriving trade powerhouse.

Also Read: India and UAE Sign Landmark Trade Deal to Settle Transactions in indian Rupees

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