In a meeting with the Export Promotion Councils, the Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles Shri Piyush Goyal unveiled a significant initiative to issue system-based automatic ‘Status Holder’ certificates under the Foreign Trade Policy (FTP) 2023. This transformative step not only reduces compliance burden and promotes ease of doing business but also underscores the importance of government collaboration.
A Revolutionary Approach to Export Certification
- Traditionally, exporters in India had to apply to the office of Directorate General of Foreign Trade (DGFT) for a Status Certificate, a process that involved submitting an online application along with an export certificate from a Chartered Accountant.
- The DGFT Regional Offices were then required to issue the certificate within three days. However, the new initiative aims to simplify this process.
- Now, exporters will no longer need to submit applications for Status Certificates.
- Instead, the certification will be granted every year in August, based on annual export figures available with the Directorate General of Commercial Intelligence and Statistics (DGCIS), along with other risk parameters.
- This shift towards automation represents a significant departure from the traditional manual application process.
Flexibility for Exporters
- The new system also offers greater flexibility to exporters.
- Those eligible for a higher status based on additional export data, such as services export, deemed exports, or double weightage for entities like MSMEs, can apply online for a Status modification at a later date.
- This flexibility empowers exporters to adapt to changing market conditions and export patterns.
Benefits of Status Holder Certification
The Status Holder certification program holds immense significance for Indian exporters in international markets. It provides several privileges, including:
- Simplified Procedures: Under FTP 2023, Status Holders benefit from simplified procedures, making it easier for them to engage in international trade.
- Priority Customs Clearance: Status Holders enjoy priority customs clearance on a self-declaration basis, reducing delays and ensuring efficient trade operations.
- Exemption from Banking Formalities: Status Holders are exempt from compulsory negotiation of documents through banks and from filing Bank Guarantees for FTP schemes. This streamlines the export process further.
Expanding the Status Holder Community
- With the launch of this new system, the Department of Commerce, Ministry of Commerce and Industry is set to recognize approximately 20,000 exporters under FTP 2023 as Status Holders. This represents a substantial increase from the previous number of 12,518 exporters.
- Notably, the one-star category, which requires an export performance of at least US$ 3 Million in the last three preceding financial years plus the three months of the current financial year, will witness the most significant growth.
- This expansion will facilitate greater support for small exporting entities, fostering a dynamic export ecosystem, and helping India achieve its ambitious export target of US$ 2 Trillion by 2030.
Towards a Digital India
- This initiative aligns perfectly with the Digital India ethos, reflecting the Indian government’s commitment to leveraging technology to enhance governance and streamline processes.
- Various e-initiatives have already been implemented where no manual examination or processing is required.
- These initiatives issue various permissions and authorizations under FTP 2023 based on a risk management system and self-declarations by exporters.
- Notable examples include the 24X7 online issuance of Importer Exporter Code (IEC) numbers, as well as the issuance and renewal of Advance Authorizations.