India’s ratification of WTO Trade Facilitation Agreement to boost ease of doing business

The government’s ratification of the Trade Facilitation Agreement (TFA) of the WTO is expected to expedite the movement, release and clearance of goods, including goods in transit, it is learnt.

"India has ratified the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), and the instrument of Acceptance for Trade Facilitation Agreement was handed over to WTO Director-General by India on April 22," the Minister of State for Commerce and Industry, Ms Nirmala Sitharaman, told Parliament earlier this week.

The pact will come into force once two-thirds of WTO members have completed their domestic rectification process, she added.

Addressing the Consultative Committee meeting attached to her Ministry on the subject, the Minister said that the TFA envisages faster clearances and reduction of red tapism at the borders and would thereby help in ease of doing business. She said that ratification of the TFA is bound to change the Indian trade and would bring more transparency in the trade process. She pointed out that after TFA ratification, the best trade practices worldwide would be shared among the member countries.

She made the point that while India has made rapid strides in streamlining its processes on the lines of international best practices, in several areas it needs to ensure speedy legislation so that there are visible beneficial outcomes. The Minister said that industry and its various associations would be involved in the consultation process while implementing the different provisions of the TFA.

She stressed that through trade facilitation member countries would seek to simplify trade procedures and help promote cross-border trade, bring greater predictability to traders and help improve the overall climate for trade and investment. She explained that TFA is supposed to enable domestic manufacturers, particularly small and medium enterprises, connect more easily to regional and global value chains, as it contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between Customs and other appropriate authorities on trade facilitation and Customs compliance issues.

Ms Sitharaman emphasised that these objectives of TFA are in consonance with India’s ease of doing business initiative.

Earlier, a detailed presentation on the TFA and the issues concerning its implementation, etc. was made by Mr Dammu Ravi, Joint Secretary, Ministry of Commerce. He gave a detailed presentation highlighting the important provisions of TFA. He also gave a brief background on TFA of WTO, its importance, important provisions under TFA and various provisions with regard to its implementation, among others.

He pointed out that TFA is divided into three parts. Section 1 contains provisions on simplification of border clearance procedures and adoption of new transparency measures and consists of 12 Articles. These 12 Articles extend to several agencies such as Customs, Border Control, Shipping, Plant and Animal Quarantine, etc., all of which require inter-ministerial cooperation and coordination. Section 2 of TFA is focused on special needs and requirements of developing country members and Least Developed Country (LDC) members for its implementation. Such a member country would have flexibility to determine which commitments to implement immediately upon entry into force of the TFA and which it wants to implement in a phased manner.

Section 3 deals with institutional mechanism for setting up a National Committee on Trade Facilitation for domestic cooperation and implementation, he said.