India has taken a significant stride towards enhancing the ‘Ease of Doing Business’ by streamlining the documentation process for import and export activities. The Directorate General of Foreign Trade (DGFT) issued a noteworthy Notification, reducing the mandatory documents required for both import and export of goods to just three documents each.

This initiative stems from the efforts of the Department of Commerce, which established an Inter-Ministerial Committee in July 2014. Chaired by the DGFT, the committee was tasked with studying and proposing ways to minimize the number of mandatory documents needed for trade. Extensive discussions were held with stakeholders, relevant departments, ministries, and agencies. The committee also conducted on-site assessments, including a visit to JNPT, to understand the practical implications and identify avenues for reducing transaction costs and time associated with exports and imports.

The culmination of these efforts resulted in the submission of the “Trading Across Borders” report to the Prime Minister’s Office in December 2014. In alignment with the recommendations outlined in the report, the Reserve Bank of India (RBI) has agreed to eliminate the ‘Foreign Exchange Control Form (SDF)’ by integrating the necessary declaration into the ‘Shipping Bill’ for exports. Similarly, for imports, the requirement of the ‘Foreign Exchange Control Form (Form A-1)’ has been abolished.

Further simplification has been achieved in collaboration with Customs, where the ‘Commercial Invoice’ has been merged with the ‘Packing List.’ A circular has been issued to endorse the acceptance of a unified ‘Commercial Invoice cum Packing List,’ consolidating the essential details from both documents. Notably, exporters and importers retain the flexibility to file separate ‘Commercial Invoice’ and ‘Packing List’ if they prefer.

Additionally, the Shipping Ministry has agreed to eliminate the need for a ‘Terminal Handling Receipt’ and transition the process to an online platform, further facilitating a smoother and more efficient trade environment.

Mandatory Documents Required For Export And Import in India

As a consequence, after issue of the DGFT’s Notification dated 12-3-2015, only three documents each would be mandatory documents for export and import.

MANDATORY DOCUMENTS FOR EXPORT & IMPORT
S. No. EXPORTS IMPORTS
1 Bill of Lading/ Airway Bill Bill of Lading/ Airway Bill
2 Commercial Invoice cum Packing List Commercial Invoice cum Packing List
3 Shipping Bill/ Bill of Export Bill of Entry

It may be recalled that India ranked 126 in ‘Trading Across Borders” component of “Ease of Doing Business”, out of 189 countries ranked by the World Bank, in its 2015 Report. The ranking methodology adopted by the World Bank for ‘Trading Across Border’ takes into account the number of mandatory documents required for export and import and the time and cost of exporting/importing a container out of/into the country. World Bank’s 2015 Report listed 7 and 10 mandatory documents respectively for export and import from/to India.

MANDATORY DOCUMENTS LISTED BY WORLD BANK IN DOING BUSINESS REPORT 2015
S. No. EXPORTS IMPORTS
1 Shipping Bill Bill of Entry
2 Commercial Invoice Commercial invoice
3 Packing List  Packing List
4 Bill of Lading Bill of Lading
5 Foreign Exchange  Control Form (SDF) Foreign Exchange Control Form (Form A-1)
6 Terminal Handling Receipt Terminal Handling Receipt
7 Technical Standard Certificate Certified Engineer’s Report
8 Cargo Release Order
9 Product manual
10 Inspection report

Following the issuance of the DGFT’s Notification, the mandatory documentation requirements for both export and import in India have undergone a significant simplification. This entails a reduction to just three essential documents for each process. Notably, Customs’ prerequisite for two distinct documents, namely the ‘Packing List’ and ‘Commercial Invoice,’ has been streamlined into a single document. Simultaneously, the RBI’s stipulation of the ‘Foreign Exchange Control Forms – SDF’ for exports and ‘Form A-1’ for imports, along with the Ministry of Shipping’s requirement for the ‘Terminal Handling Receipt,’ has been eliminated.

The ‘Cargo Release Order,’ although not mandated by any regulatory agency, remains a commercial document issued by the Shipping line to the pertinent importer. On the other hand, specific documents such as the ‘Technical Standard Certificate,’ ‘Certified Engineer’s Report,’ ‘Product Manual,’ and ‘Inspection Report’ are only requisite in certain cases, specific products, or tariff lines, and are not obligatory for all products.

This reduction in the number of mandatory documents is anticipated to result in a proportional decrease in transaction costs and processing time. The streamlined documentation process is not only expected to enhance the ‘Ease of Doing Business,’ particularly in the context of ‘Trading Across Borders,’ but also holds the potential to boost India’s ranking in this crucial parameter. This strategic move aligns with India’s broader objectives of fostering a more efficient and business-friendly trade environment.

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Authored by Arghya Sen, 3rd year BALLB Student at Amity University, Kolkata 

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