The Modi government is working on a proposal to merge the Directorate General of Foreign Trade (DGFT) with Central Board for Excise and Customs (CBEC) to promote ease of doing business for exports and imports. The DGFT and CBEC are under the ministries of commerce and finance, respectively. The proposal also assumes significance as a bulk of the current work profile of the foreign trade regulator DGFT is going online with digitisation and rollout of the goods and services tax (GST).
The DGFT, headed by an Indian Administrative Service (IAS) officer, facilitates exports, formulates foreign trade policy and administers programmes like the Merchandise Exports from India Scheme, Advance Authorisation and Export Promotion for Capital Goods. Indian Trade Service (ITS) cadre officials mainly work in this body. According to sources, the matter was discussed recently in an inter-ministerial meeting convened by the Cabinet Secretariat.
“There are some synergies between customs and the DGFT. The two can be merged so that policy and implementation is with one body. Outward looking infrastructure support related activities will be taken care of by the DGFT post merger,” they said.
With the focus on digitisation, most of the activities are now being handled online like providing export-import code numbers and the like. Once the new indirect tax regime GST comes into effect, all the remaining work will be carried out digitally, sources added.
As India is also implementing WTO’s trade facilitation agreement, it would be prudent that all trade facilitation related work comes under a single body.
As per the World Bank’s ease of doing business report (2017), India is ranked 130th out of 190 economies and further lower at 143rd when it comes to ‘trading across borders’.