EDI for International Trade ( etrade ) Impact and Potential Gains

Background
The agenda for e-governance was initially drawn on June 2000 with a primary aim of networking government departments and developing in-house government applications that would eventually evolve into a citizen centric or business centric ecosystem .It was during 2003-2007 that Government of India approved National e-Governance Plan (NeGP) for implementation with conception of 27 Mission Mode Projects (MMPs).These projects would create efficient ,transparent and secure electronic delivery of services by trade regulatory / facilitating agencies, simplifying procedures and reduce the transaction costs and time with introduction of UN/CEFACT standards and practices .

Electronic Data Interchange (EDI) for facilitating international trade (etrade) in india was one among those objectives of the MMP which were initiated to simplify procedures, introduce electronic delivery of services by regulatory and facilitating organisations, provide 24/7 access to users, increase transparency in procedures, reduce transaction cost and time and introduce international standards and practices. This would enable clearance of export/import of cargo at ports/airports/ICDs etc. within 24 hours thereby enhancing trade and transportation facilitation for export competitiveness. Electronic Data Interchange (EDI) is simply a set of data definitions that permit business forms, that would have been exchanged using paper in the past, to be exchanged electronically. This simple set of definitions has spurred a number of organizations to put in place an operational environment in which the exchange of electronic business forms substitutes for the exchange of paper forms. This has resulted, in some cases, in the establishment of an EDI environment, which arguably represents the most advanced state of electronic commerce today, causing some to view EDI and electronic commerce as one and the same. However, EDI is only a subset of electronic commerce, albeit a very important one. Electronic data interchange aims at single point collection of data for use by various agencies participating in a common activity. The following organizations were selected for integrated EDI implementation viz,Airports, Airlines Apparel/Textile export Promotion Councils ,Banks , RBI, Customs , Container Corporation ,DGFT Export Promotion Organizations, DG Commercial Intelligence/Statistics and Inland Container Depots/Container Freight Stations , Indian Railways and Port Trusts

The services covered under the project are: Electronic filing/clearance of export/import documents by exporter/importer/agents to Customs, Ports, Airports, etc. e-Payment of custom duties, charges (handling/freight etc.) of Ports/ Airports Filing/processing of licenses for DGFT e-Payment of license fee for DGFT Electronic exchange of documents between community partners such as Customs, Ports, Airports, DGFT, Banks etc

Objective Indias Foreign Trade Policy aims to double its annual exports from appox US$ 246 Billion in next three years to appox US $ 500 billion .It has been observed that the trade related transaction cost is one of the major determinants of the export competitiveness . Trade related transaction cost comprises of large number of regulatory requirements , compliance measures , communication cost with clients , infrastructure related cost ,export cargo readiness procedure time at ports and airports , local transportation cost etc . India ranks 134th in the world bank report of doing business with India .It is estimated that appox 30 million SMEs in India contribute to 40% of our exports. We would, as highlighted in the diagram below, try to understand the journey of an SME while conducting an export consignment with various regulatory bodies and private players in terms of technology interface at different junctures.

Exporter

DGFT

EP COUNCIL

AIRPORT S

PORTS

BANKS

CUSTOMS

EXCISE

CONCOR

AIRPORT AUTHORITY OF INDIA

COMMERCIAL DOCUMENTS

BANKING DOCUMENT S

FREIGHT FORWARD ER

CUSTOM BROKER

TRANSPOR TATION DOCUMEN TS

WAREHOUSE

OCEAN CARRIERS

AIRLINES

cwc

ICD

TECHNOLO GY ASSOCIATE

DGCIS DGFT Export Promotio n Coucil Banks

Airline

Shipping Agent Message

Interchange

Customs

Importer /Exporte r

RBI

CHA

Railways

DIAL

ICD

E Trade Community India

Learning Outcome EXIM Community to carry out their day to day functioning has interface apart from the regulatory Agencies with multiple private trade partners .Thus it needs a comprehensive software that could create a seamless interface both with government agencies as well with multiple trade partners . It is established that the International Trade transactions require a complex set of service operations, including ordering the goods, transporting the goods between buyer and seller, guaranteeing payment, insuring the goods in case of loss or damage, and preparing and filing the appropriate documents with governments, carriers and banks. The Information Technology in global trade management needs to encompass following activities Purchase orders Pro forma invoices Commercial invoices Letters of credit Ocean and airway bills of lading Calculation of air, sea and land transportation costs Applicable taxes Import/export duties Shipping tariffs Transfers of ownership License/handling fees Currency conversion Language translation Evidence of ownership Government regulatory compliance

After going through this module, participants should be able to understand: Process of shipping goods in EDI environment/Cargo management system Electronic Linkages for submission and processing of documents between various regulatory authorities / various ICT applications in different areas of government Understanding usage of Softwares like ICES 1.5 for e-filing of documents /e- payment Web enabled capsule of working with CONCOR ,DIAL ,DGFT etc Technology deployed by SME for their internal functions and to create interface with other community stakeholders, role of various portals, Tracing and tracking of cargo Construct a cost cutting strategy for the enterprise

Value Chain International trade

PreShipment

Importer Exporter Insurance Company Chamber of Commerce Export/Import Agent Licensing Agency Embassies Credit Checking Company Other Intermediaries Freight Forwarder Transporter Carrier Shipping Line Inspection Company (PSI) Forwarder Other Intermediaries Customs (Import/Export) Health Authorities Port Management Customs Brokers Other Intermediaries Bank Financial Institutions Other Intermediaries

Transport

Customs

Payments