Govt may fast-track food, medicines, farm trade under AEO framework

The AEO programme is implemented by the Central Board of Indirect Taxes and Customs (CBIC) under the aegis of the World Customs Organization's SAFE Framework

The Directorate of International Customs (DIC) under the finance ministry has been working with regulatory agencies responsible for safety, quality, and compliance of food, medicines, and agricultural trade to fast track clearances of exports and imports under the authorised economic operator (AEO) framework.

 

The unilateral trade facilitation measure is expected to improve trade with countries like the US, with which India has mutual recognition agreements (MRAs) under the AEO framework. Other jurisdictions with which India has similar arrangements for faster cargo clearance, reduced checks, and priority handling during disruptions include South Korea, United Arab Emirates, Russia, Hong Kong, Taiwan, Australia, and New Zealand.

 

The AEO programme is implemented by the Central Board of Indirect Taxes and Customs under the aegis of the World Customs Organization’s SAFE Framework. According to a government official, the DIC is trying to ensure that AEO-certified businesses in both importing and exporting countries receive faster approvals from these bodies, in addition to quicker customs clearance.

 

The regulatory agencies involved include Food Safety and Standards Authority of India, Central Drugs Standard Control Organisation, Directorate of Plant Protection, Quarantine & Storage, and Animal Quarantine and Certification Services.

 

“It is an internal initiative by the Indian government and is independent of MRAs. Once implemented, AEO-certified importers and exporters will benefit from expedited clearances not just from Customs but also from partner agencies, effectively creating a fast-track, trust-based clearance system for compliant traders,” the official said.

 

To qualify as an AEO-certified trader, an applicant must have filed at least 10 import or export documents in the previous financial year for micro, small, and medium enterprises (MSMEs) (25 for others) and demonstrate 3 years of clean compliance with customs laws.

 

Once approved, a unique AEO code is issued, and each entity is assigned a dedicated customs relationship manager to help resolve operational issues and facilitate cross-border coordination.

 

As of March, 5,920 AEO certificates have been issued under various tiers with MSMEs accounting for nearly 35 per cent of approvals. However, with over 200,000 active import-export businesses in the country, the official noted that participation remains low despite the benefits.

 

The finance ministry recently organised an interactive session along with the Confederation of Indian Industry to promote trade facilitation and engage with the exporter and importer community on the benefits and opportunities of the AEO programme.