India, US working on new customs audit process to cut trade friction

New Delhi: India and the US are working out a fresh customs audit process to minimise the rejection of consignments, lessen the number of certification and expedite movement of goods amid ongoing trade negotiation between the two nations.

The customs representative from both sides met last week to introduce clearer protocols and auditing mechanisms in compliance with international trade standards, and at the same time to relax certification norms for seafood, and genetically modified agri produce, and processed food, ET has learnt.

These two items face maximum rejection from both sides and have been a matter of contention for both countries.


Both countries may also relax tariff and clearances for the US' Foreign-Trade Zone (FTZ) system, which is equivalent to India's special economic zones.

While some specific points were discussed their detailed observation may be discussed when the commerce minister Piyush Goyal will travel to US later this month, officials said.

"Last week, the US team was here to understand the customs process ahead of the trade deal and both sides have discussed simplifying processes for two items. One was fresh fruits and processed food items, and second was seafood," a senior official told ET.

The official added that a specific concern from the Indian side included a disclaimer on genetically modified food, which the US had not accepted in the past. India is pushing for a declaration format, which says that the products are not genetically modified food items.

The US part has agreed to work on the standard certification, which may help in the speedy customs clearances.

The US side wanted similar certification for Indian seafood, which they said had chemicals above the permissible limit as per the US food safety norms, which India may work on to minimise rejection of consignment.

"Largely, the framework of the mutual recognition agreement for authorised economic operators (AEO) between the two countries will remain the same. However, both sides will tweak customs audit and inspection," the official said.

Last month ET had reported that both sides are also working on separate customs tariff for ready-to-drink alcohol.

The US is pushing for a separate category for alcohol-based beverages with alcohol content between 14-18%, making way for import of many such beverages under the category. Currently India allows beverages with alcohol content not above 8% in the low alcohol beverage category. The US counterpart wants either to hike this to 18% or have a separate category.