National Committee on Trade Facilitation

Trade facilitation refers to the procedures and controls by the government intending to improve the movement of goods across national borders. It takes care of the legitimate regulatory objectives of trade practices while reducing associated bottlenecks, optimizing cost involvement, and maximizing efficiency. 

National Committee on Trade Facilitation (NCTF) is an important institutional body for coordinating and controlling trade procedures with balanced private and public sector participation. It also enables the planning and implementation of necessary reforms for successful trade facilitation. The primary goal of trade facilitation is to help make imports and exports more streamlined, cost-effective, and reliable while complying with safety and legal norms.

Objectives of the National Committee on Trade Facilitation:

In line with India’s association with the WTO agreement on trade facilitation in April 2016, the National Trade Facilitation Action Plan was introduced as an important step by the Government of India to facilitate trade. The action points in the plan are mapped to the WTO Trade Facilitation Agreement (TFA). The National Committee on Trade Facilitation (NCTF) has been constituted as a part of the mandatory institutional arrangement following the trade facilitation agreement.

The objective of the NCTF is to form a national-level body that will facilitate domestic coordination and implementation of trade facilitation provisions. It will play a key role in developing the road map for trade facilitation across India. Its responsibility is to synergize the various trade facilitation programs across the country and to focus on bringing all stakeholders of trade facilitation on one platform that has been instrumental in facilitating the trading process involving imports and exports. 

The NCTF acts as a controlling authority to simplify and automate information exchange and facilitate communication between the government and the private sector. The role of the NCTF would include planning and implementing a national trade facilitation plan, assessing and removing bottlenecks, and making policy recommendations. The committee functions as a regulatory and advisory body and is empowered with authority and responsibility to implement necessary trade facilitation measures.

Structure of National Committee on Trade Facilitation:

NCTF is a committee comprising representatives of different ministries, and the committee chairperson is the cabinet secretary. It has a three-tier structure with the following layers: 

• The main national committee is headed by the cabinet secretary, who will monitor the implementation of the provisions under TFA. 
• A steering committee jointly chaired by the Secretary (Revenue) and Secretary (Commerce) will be responsible for identifying the required legislative procedures and assessing the level of compliance with the trade facilitation provisions.
• The lower level comprises working groups of experts dealing with specific trade facilitation issues such as outreach, legislative changes, time release study, and infrastructure upgrading.

Importance of the National Committee on Trade Facilitation:

A Trade facilitation agreement (TFA) contains provisions that would expedite the movement, release, and clearance of goods and streamline the transport of goods. The necessity of an effective, well-functioning National Committee on Trade Facilitation (NCTF) was felt for the effective implementation of the TFA. 

The committee operates with the involvement of all relevant government agencies, including customs administrations’ full and active participation. It also plays a key role in sorting out customs clearance issues through practical cooperation between customs and other appropriate authorities in borders to facilitate and secure global trade. 

The NCTF is responsible for involving all stakeholders that will be affected by the implementation of the trade facilitation agreement. It is expected to lead in the development a strategic plan followed by action plans with clear timelines. It ensures the implementation of TFA provisions in coordination with all relevant government agencies and other stakeholders. It helps to deal with wider trade facilitation perspectives, analyze challenges and provide solutions effectively.

Functioning of NCTF:

The functions of the NCTF are based on clearly defined goals and objectives with time and resource commitments. The purpose, structure, and responsibilities of the NCTF are defined by the Terms of Reference (ToR), which is essential for the well functioning of NCTF. 

It defines the work scope and shows how it can be developed and applied. It helps develop a common understanding of the scope and activities among all stakeholders. The ToR also maintains records of all activities that form the basis for making future decisions. NCTF has been instrumental in managing imports and exports by successfully integrating cross-border trade with the global value chain. Some of the important functions of NCTFare as follows: 

• Establishment of a National Single Window system to streamline all import-related formalities like examination, sampling, clearance, etc., through a single online national portal. 
• Simplification of fees for various clearance-related activities at the borders. 
• Introduction of paperless import and export documents filing through the ‘E-Sanchit’ project. 
• Publishing of important information online regarding procedures for import and export, laws & regulations, etc.

Implications of Trade Facilitation by NCTF:

Trade facilitation initiatives benefit the business community and generate positive economic implications for the country. The NCTF is responsible for domestic coordination and monitoring of the TFA implementation. The business community gets exposure to an enhanced competitive environment in domestic and global markets. The movements of goods across borders become more predictable and efficient due to reduced delays and costs.

NCTF works closely with all stakeholders from the private and public enterprises, which helps to achieve sustainable reforms and modernization in the commerce sector. The role of NCTF in successful cooperation with development partners is the key to the effective implementation of TFA provisions at the national level. These initiatives have contributed to an overall improvement in the business environment in the country, as recognized by the World Bank.

Important Points about National Committee on Trade Facilitation:

• The National Trade Facilitation Action Plan (NTFAP) for 2017-2020 was prepared to define specific activities and procedures to address trade-related issues. 
• Consistent trade facilitation efforts have improved India’s performance in trading across borders indicator from 146 in 2017 to 68 in the year 2019. 
• India also notified transparency notifications at the WTO in April 2019 as a move towards the effective implementation of more provisions under TFA. 
• A new NTFAP for the next period of 2020 to 2023 is under preparation with a vision to take additional reforms to boost trade facilitation efforts.

Conclusion:
The purpose of the National Committee on Trade Facilitation is to streamline the cross-border trading process through an efficient, transparent, and coordinated system. The application of technology-driven procedures supports effective trade facilitation through the development of logistics infrastructure.