Article - 39 Week 48
Technology vs transaction costs in indian exports:
Exports mean a lot to our national economy. Exports too depend on the wisdom of our policies on imports. No rocket science at that. But what amounts more than rocket science is finding a way to make the transaction costs on exports & imports to their pragmatically possible lowest and therefore competitive in the global market - keeping aside the issue of inadequate infrastructure. At this point of time, countries like Bangladesh and Vietnam are ahead in processing & handling information & data on exports & imports more efficiently than India, thereby cutting their transaction costs to very low levels. And we have a system, where trailers with export containers queue up for miles with bunches of documents, cotton rags being pushed out repeatedly as expensive garments to claim duty drawback, a small typo in IGM amounts to thousands of Rupees of fines, expensive metal wastes being imported by being mixed with ordinary scrap, bribes, and inordinate delays, an on-wheel inspection on export containers being used as a ruse to wrench bribe from exports, containers meant for export on a certain vessel are carelessly stranded by JNPT incurring all kinds of penalties & being passed on to the innocent end user, ICD containers are mixed up & left to be manually hunted by the shipping lines or their surveyors, a missing of a stamp of the EGM messing up the duty drawback, a hefty bribe and a days of wait to get a steamer agency license just like the British Raj period, the declaration of cargo by a third unrelated party to the ownership of the goods & persecution of a fourth party for omission of a comma, an obscenely legitimised CHA license holding examination & certification merely to act as a channel for bribery between the holy temple of the government and the general public, and the never-ending list!
It is not that we do not have a solution to them. All we need are simple, fair, pragmatic laws and a simple & robust IT platform. We are hearing about the all glorious EDI system for nearly a decade and what we have got is a patchy ICEGATE which is in suspended slow-motion for what appears to be a perpetuity in the land of technology. If Nandan Nilekani has taken on his shoulder the responsibility of UID, don't we deserve a relatively smaller shoulder to put our house in order?
I'm not sure when we shall have fair & just laws in our shipping industry. But the waves of changes from outside shall change them one day - may be sooner than later. Coming to the question of a government initiated IT platform, that makes our business simple & transparent, is long overdue. It's a shame to see scores of people scurrying around with Floppies to the Customs or Forwarding Notes being submitted to CONCOR or coloured Forms being used for gate entries. The information is same. The same cargo, the same container, the same ship, the same shipper, and the same consignee. And we have an unthinkably complex chain of forms for many departments. If the ever increasing multiplicity and duplicity of such forms are not bad enough, the moral degradation & increase of costs on feeding & greasing along the holly corridors, push our transaction costs on exports to uncompetitive highs. You may think how does a moral degradation push a tangible cost? But the fact is moral degradation infects and clouds our honest business acumen indirectly by eroding trust & dependability from outside buyers. I believe that is a bigger price on our export competitiveness.
All we need is a cloud-platform in a very simple & user friendly interface, where the foreign shipper has to key in all he wants to ship into India before loading of the cargo itself. If the cargo class is the negative list or restricted list, the system should warn the shipper online & prevent it coming in. If accepted by the system,this should create one unique number. Then the shipping line can add further details like container number, or vessel name & voyage etc on the same unique number. The Indian customs and the consignee can start monitoring from that stage. Permission to modify the contents by the shipper and the carrier should be authorised until the landing of the cargo, with a few exceptional field. All these progresses can be extracted in their own formats by the customs, port, terminal, CONCOR, Bank, DGFT, RBI etc without any manual intervention. And all the man-power of the customs department should be put into the acts of physically checking the imported contents before delivery by matching them with the online contents. This calls for no revolutionary technology or changes in policies. All this requires is a pragmatic & simple thinking accompanied by sharp execution. Each of us need to think about this and force this wisdom on our administration.
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Brgds
Capt Rath
Econship Marine
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