The center is trying to expand the trusted traders program beyond customs simplification | Today’s news
NEW DELHI: India is looking to expand its trusted trader program beyond traditional customs simplification as it enters the next decade of the approved economic operator (AEO) framework, with technology, access to MSMEs and closer coordination among regulators emerging as priorities.
Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Chaturvedi on Wednesday outlined five priorities for the next phase of the programme: technology-based facilitation, greater inclusion of SMEs, seamless coordination between agencies, expanded mutual recognition arrangements with global partners and greater synergies across indirect tax verticals.
The priorities were announced at an event to mark 10 years of the AEO programme, which provides compliant businesses with simplified customs procedures and risk-based facilitation while maintaining supply chain security.
From certificates to results
Chaturvedi said the program has become a key pillar of India’s trade facilitation architecture and has helped transform customs administration into a modern, trustworthy and facilitating system in line with the World Customs Organization’s SAFE framework of standards.
The program currently covers 5,967 entities, including importers, exporters, manufacturers, customs brokers, logistics operators and warehouse operators, across T1, T2, T3 and LO categories. T1, T2 and T3 refer to the three certification levels, while AEO-LO covers eligible logistics operators.
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The AEO program is essentially a trusted merchant system. Businesses that meet prescribed standards for customs compliance and supply chain security are recognized as trusted entities and receive greater facilitation of customs procedures. The aim is to allow customs authorities to focus resources on higher risk transactions while ensuring faster and more predictable processing for compliant businesses.
Its scope extends beyond importers and exporters to other participants in the international supply chain, including logistics operators, warehouses, customs brokers and manufacturers.
Experts said the next phase could expand the programme’s role, with a greater opportunity to move OHS beyond the customs simplification regime to a broader framework for trusted economic operators.
“Technology and artificial intelligence should enable continuous risk-based assessment and enable compliant businesses to face minimal interference while directing enforcement resources to real risks,” Sanjay Kumar, a former IRS officer, told Mint.
“The focus on SMEs is equally important. However, inclusion will require reasonable compliance requirements rather than simply lowering thresholds. Greater integration of customs, GST and other regulatory agencies, supported by stronger international mutual recognition, could turn AEO status into a meaningful competitive advantage for Indian businesses,” he said.
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“Therefore, the next phase of the program should not be measured by the number of AEO certificates issued, but by measurable reductions in clearance time, transaction costs and regulatory interventions,” Kumar added.
Vinod Kumar, president of the India SME Forum, also said that easier access to the benefits of trusted merchants would be important for smaller businesses.
“Focusing on MSMEs in the next phase of the AEO program is important as smaller businesses need easier access to the benefits of trusted traders. The program should have simple and reasonable compliance requirements so that MSMEs are not deterred by the cost and complexity of certification. Greater technological facilitation and faster customs clearance can help reduce transaction costs and make Indian MSMEs more competitive in global markets,” he said.
