India talks to Japan, South Africa to expand trade ties through AEO programme: CBIC chairman

India’s AEO program is administered by the Central Board of Indirect Taxes and Customs.

India has stepped on the gas to enhance global trade facilitation with 30 countries, including Japan and South Africa, by broadening its Authorised Economic Operator (AEO) programme for improved supply chain efficiency and faster customs clearance for trusted businesses, Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Agarwal said.

“India has successfully signed MRAs (Mutual Recognition Agreements) with several key trading partners, including the US, South Korea, UAE, Taiwan, Australia, and Malaysia. Negotiations are ongoing with over 30 countries, and we are making promising progress in discussions with Japan and South Africa,” Agarwal said at the inaugural session of the Global AEO Conference titled, India AEO Dialogue: Enhancing Global Trade Partnerships.

The AEO programme, a part of the SAFE Framework of the World Customs Organisation (WCO), certifies businesses that meet stringent compliance and security standards. Certified businesses enjoy a range of benefits, including priority clearance, reduced inspection rates, and deferred payments of duties and taxes. India’s AEO programme is administered by the Central Board of Indirect Taxes and Customs.

The clearance time for AEO-certified businesses is approximately 40 percent lower compared to non-certified entities, contributing to cost efficiency and smoother trade operations, Agarwal noted. “India’s AEO programme is completely digital, streamlining processes to expedite clearances and enhance efficiency in the trade ecosystem.”

A significant portion of India’s AEO-certified businesses are micro, small, and medium enterprises (MSMEs), reflecting the government’s focus on enabling smaller businesses to compete globally. “Our aim is to ensure collaboration between the private sector and customs to improve trade efficiency. MSMEs, as key contributors to India’s exports, are central to this initiative,” Agarwal said.

The MRAs are pivotal to the AEO programme, allowing reciprocal recognition of AEO status between countries. This not only boosts trust but also simplifies customs procedures for businesses operating across borders. These agreements are expected to significantly reduce logistical bottlenecks and enhance India’s trade competitiveness.