Background studies
55
An evaluation of the need and cost of selected trade
facilitation measures in India: Implications for
the WTO negotiations
Sachin Chaturvedi*
Summary
Though trade liberalization in India was launched as early as 1991, the devotion of
significant policy attention to trade facilitation is a recent phenomenon. The Central Board
of Excise and Customs (CBEC), a key government agency responsible for trade facilitation,
has consolidated different initiatives over the past two years. The CBEC has accepted
and implemented most of the key recommendations of the Working Group on Trade
Facilitation (WGTF). However, the current Trade Facilitation (TF) programme may have to
go beyond its current mandate in order to account for specific World Trade Organization
(WTO) commitments which may emerge during the on-going negotiations on the General
Agreement on Tariffs and Trade (GATT) Articles V, VIII and X. In this paper, an effort is
made to take stock of the need, priority and cost of implementation of TF measures related
to these Articles for India.
India has initiated several measures as part of its TF programme. While most
measures are already in place within the context of Articles VIII and X, those remaining
involve significant costs and require careful planning for implementation. There are major
gaps, especially with regards to Article V. In countries like India, where trade facilitation is
an on-going exercise, precise cost estimation proves highly difficult.
The study finds that in the case of GATT Article X, which deals with the publication
and administration of trade regulations, India has already implemented most of the
requirements. However, comprehensive efforts are required to implement the single inquiry
point provision, which may require software compatibility among various agencies,
in addition to addressing infrastructure constraints. In the case of Article VIII, which deals
with fees, import and export formalities and documentation requirements, most provisions
are in place but efforts are required to improve border agency coordination. The estimated
minimum cost of implementing these two Articles (X and VIII) is about USD 44 million.
This includes a major expenditure on equipment and infrastructure (82 per cent). The
installation of electronic cargo clearance units is a major requirement at most of the
leading ports in India. The infrastructure requirements of Article V, especially for physical
* Research and Information System for Developing Counties (RIS, India). The complete study is
available on the companion CD-ROM to this publication, as well as on the ARTNeT website at:
www.artnetontrade.org. The views presented in this paper are those of the author and do not necessarily
reflect the views of the United Nations or any other ARTNeT member or partner. Any remaining errors
are the responsibility of the author(s).