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DGFT eases compliance burden as pharma exporters face hurdles in advance authorisation closure
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Shardul Nautiyal, Mumbai
March 05 , 2025
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The Directorate General of Foreign Trade (DGFT) has eased compliance burden for the Indian pharma exporters, who are currently grappling with procedural challenges in the closure of Advance Authorisation (AA) due to constraints in the description column of shipping bills. This issue, which has affected the seamless export process, was highlighted in a recent Trade Notice issued by the DGFT.
The Trade Notice addresses concerns raised by exporters regarding difficulties in the closure of Advance Authorisations. The primary issue stems from the inability of the online system to capture complete descriptions of export items when they exceed 120 characters. Consequently, exporters face deficiencies raised by Regional Authorities (RAs) due to non-compliance with Para 4.12 (iii) of the Foreign Trade Policy (FTP) 2023.
This challenge has led to delays and added compliance burdens on pharmaceutical exporters, who already navigate a complex regulatory framework while ensuring global market access for life-saving drugs.
To mitigate these difficulties, the DGFT has issued a directive allowing exporters to submit self-attested copies of GST system-generated e-invoices to corroborate the complete description of export items. The Trade Notice further specifies that in such cases, these e-invoices, along with other prescribed documents, must be uploaded for Redemption/EODC (Export Obligation Discharge Certificate) of Advance Authorisations.
The measure is expected to ease the burden on exporters and ensure a smoother process for verifying export descriptions, reducing unnecessary delays.
India's pharmaceutical sector, valued at over USD 50 billion in exports, heavily relies on efficient trade facilitation measures. With the industry supplying 40% of generic medicines to the US market and being a key player in vaccine production, disruptions in export clearance procedures can have significant repercussions.
The Pharmaceuticals Export Promotion Council of India (Pharmexcil) has welcomed the DGFT's proactive stance, emphasizing that digital documentation flexibility is crucial for maintaining India's leadership in global pharmaceutical trade.
Leading pharma exporters have voiced their concerns over the limitations in the system and the subsequent compliance challenges. An exporter stated, "The Indian pharmaceutical industry plays a vital role in global healthcare, and any procedural bottleneck can hinder our efficiency. The DGFT's latest directive is a step in the right direction, and we hope for further improvements in digital trade facilitation."
Several exporters have urged the government to enhance the online systems further to accommodate longer descriptions automatically, rather than relying on supplementary documentation.
The DGFT's directive, aimed at resolving a key bottleneck in the export process, is a much-needed relief for the pharmaceutical industry. However, industry leaders and trade bodies continue to advocate for more comprehensive digital infrastructure improvements to ensure seamless trade operations. As the sector navigates evolving global demand and regulatory landscapes, efficient trade facilitation will remain a cornerstone of India's pharma export success.
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