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Commerce Secretary Sunil Barthwal has announced that a Standard Operating Procedure (SOP) is being formulated to enhance coordination between the Directorate General of Commercial Intelligence and Statistics (DGCIS) and existing trade monitoring systems. A new platform will soon be launched to provide improved data analytics.
Barthwal noted that spikes in imports often appear exaggerated due to coordination or data transmission issues. He said the goal of releasing quick estimates is to ensure transparency and timely dissemination of trade data, aligning with the International Monetary Fund’s (IMF) requirements for monthly releases on the 15th.
He explained that the data revision process involves reconciling available information with revised data published after 30 days as part of a regular exercise, including updates on the DGCIS website. He assured that data is updated and reconciled according to global practices, adding that the DGCIS employs a dynamic data revision policy that revises trade data for all months of the financial year.
The Indian Customs Electronic Gateway (ICEGATE) serves as the national portal of the Central Board of Indirect Taxes and Customs (CBIC). All trade data is directed to ICEGATE’s server, which provides electronic filing services to trade partners, cargo carriers, and others.
Recent issues, such as double counting and subsequent downward revisions of India’s trade data on imports, have put the spotlight on the methodology used for computing monthly import and export data. Most trade in India occurs via sea or air routes, where Customs Department officials oversee the collection of import and export duties and monitor the movement of restricted commodities.
Exporters are required to file shipping bills, while importers must submit Bills of Entry through the Customs Department’s Electronic Data Interchange (EDI) system. Previously, trade data was compiled using the SEZ Online System, which accounted for imports in over 100 Special Economic Zones (SEZs). ICEGATE recorded imports at all other ports (non-SEZs) prior to May 2024. Both systems transmitted EXIM data separately to the DGCIS for publishing foreign trade statistics.
In May 2024, India began migrating its export and import data from the SEZ Online System to ICEGATE, which is the national portal of the CBIC. SEZs were previously counted separately on the SEZ Online System, as they are treated as foreign entities for customs duty purposes. Government sources explained that this migration means ICEGATE will also account for imports in SEZs.
All importers are mandated to file Bills of Entry via the EDI system. However, the old system did not automatically transfer these entries to ICEGATE for imports into the Domestic Tariff Area (DTA). This created a situation where ICEGATE’s records did not differentiate between goods imported into SEZs and those imported from SEZs into DTAs. Some goods imported into SEZs for value addition or use are also brought into DTAs. However, the second leg of DTA clearances was not transmitted, leading to these transactions being recorded independently under ICEGATE.
Since ICEGATE had never managed SEZs, it continued to count the movement of goods from abroad to SEZs and from SEZs to DTAs as separate transactions. Sources clarified that the movement of goods from DTAs to SEZs is technically considered an export for customs duty purposes. Goods manufactured in SEZs often undergo value addition or job work in DTAs before returning, which must be accounted for separately in ICEGATE.
For instance, if 100 units of an item are imported into an SEZ, and 10 units are used there, then 90 units are subsequently imported into the DTA in various denominations. In this scenario, only the 10 units used in the SEZ would be exempt from counting towards total imports.
Due to ongoing technical glitches, the migration process is not yet complete. Both SEZ Online and ICEGATE are still capturing and transmitting mutually exclusive EXIM data to the DGCIS.
Also read: India’s electronics exports hit 24-month high at $3.58 billion in December 2024
