6.2 Improvements In The Existing System Of Trade Data
6.2 Improvements in the Existing System of Trade Data
Current Status
6.2.1 The main sources for India’s Foreign Trade Statistics are Shipping Bills and Bills of Entry – declarations made and submitted by exporters and importers, respectively to the authorities of customs at the ports. These bills are statutory documents, which contain the customs’ permission to ship or land the goods, as the case may be. These Shipping Bills and Bills of Entries for each item of export and import contain relevant details of the transactions such as Code Number of the Commodity according to Indian Trade Classification based on Harmonised Commodity Description and Coding System {ITC(HS)}, description of the commodity, license particulars of the goods in the case of imports, value of exports or imports, quantity (gross and net), amount of duty, name of exporter or importer, country of destination or consignment, Importer and Exporter Code (IEC), etc. These particulars are transcribed into a return – called Daily Trade Return (DTR) by the Statistical Division of the concerned customs authorities and are subsequently forwarded to the Directorate General of Commercial Intelligence and Statistics (DGCI&S), which is the nodal agency for collection, compilation, publication and dissemination of Foreign Trade Statistics of India. The duplicate copy of the Shipping Bill, which is adjusted for any short or shut out shipment, is used for preparing the DTRs for recording of exports. The Foreign Trade Statistics cover only commercial transactions of the merchandise trade. Items on Defence Goods are not covered in Foreign Trade Statistics as a matter of principle, set earlier. This apart, non-commercial transactions such as, personal baggage and effects, exhibition goods, samples, etc. are not covered in Foreign Trade Statistics. The direct transit trade, i.e. goods of other countries passing and transit goods warehoused not for the purpose of disposal, are excluded completely. Although the exports and imports of crude oil and petroleum products are included in the Foreign Trade Statistics, the detailed commodity-wise or country-wise break-ups are not published by the DGCI&S due to non-availability of detailed information.
6.2.2 The DGCI&S receives trade data from about 40-50 major ports and some small ports in three different modes namely, Electronic Data Interchange (EDI), Non-EDI and manual. The data transcribed manually from Shipping Bills and Bills of Entry into DTR formats has about a 15 per cent share in the total merchandise trade, the remaining 85 per cent share being accounted for by EDI and non-EDI modes. In the EDI mode, customs clearance of Shipping Bills and Bills of Entry are given through the computer itself and the relevant information as required in the DTRs is furnished to DGCI&S. The major ports are covered by the EDI system. The non-EDI mode relates to manual clearance of Shipping Bills and Bills of Entry but the DTRs are prepared through the help of the computer and the data are transmitted to the DGCI&S in floppies.
6.2.3 Before validating the data contained in the DTRs, the DGCI&S prepares the aggregated data of Exports and Imports within about 25 days from the close of the month in the form of a Draft Press Note. As per the existing system, the Draft Press Note is sent to the Ministry of Commerce for approval before its release. Quick Estimates of Exports and Imports by Principal Commodities are prepared at the same time with a view to make a broad assessment of the performance of India’s Foreign Trade and to study the impact of various trade policies, enabling the Government to initiate suitable corrective measures, if necessary, in attaining the desired objective in the sphere of External Trade. A monthly brochure entitled, Foreign Trade Statistics of India (Principal Commodities and Countries) is then brought out in about two months time from the reference month. At the final stage, detailed data of India’s Foreign Trade are released in two publications, namely, Monthly Statistics of Foreign Trade of India (MSFTI) containing Commodity by country details and Statistics of Foreign Trade of India by Countries (SFTIC) containing country by commodity details. The former is a monthly publication while the latter is a quarterly one though the two publications are based on the same data set with varying presentation. The data reported in these publications are according to 8-digit ITC (HS) and is available with a time lag of about 3 to 4 months from the reference month. The status of the various publications brought out by the Office of DGCI&S on Foreign Trade is given in Annexe 6.1.
Deficiencies
6.2.4 In the recent past, a substantial amount of exports and imports has been taking place through satellite communications comprising software, technical know-how, etc. This mode of transaction is commonly known as e-commerce and takes place mostly in the digital mode. This poses a problem in capturing such transactions in the existing traditional system of DGCI&S.
6.2.5 The 8-digit ITC(HS) Codes filled up in the Shipping Bills and Bills of Entry forms the basic input for generation of export and import data at the disaggregated level. It has been experienced that the exporters or importers or their agents do not report these Codes properly. To improve the situation, the Directorate General of Foreign Trade (DGFT) has issued a notification on 11 September, 2000 making it mandatory to mention 8-digit ITC(HS) Codes prepared by the DGCI&S against each export product that figures in the Shipping Bill. It has been mentioned in the notification that no benefit under the policy will be disbursed to the exporters unless the Code appears on the Shipping Bill and this measure has been made effective from 1 October, 2000. The DGCI&S has reported that after the issue of the above notification, though the exporters are reporting valid codes in the Shipping Bills, but it has been noticed that the problem of mismatching, i.e. codes vis-à-vis the description of the items, still persists. As regards imports, no such notification has been issued.
6.2.6 Problems like late receipt of DTRs from the customs’ ports, illegibility of manually-prepared DTRs and invalid or valid but incorrect item codes often result in delay in the processing of Foreign Trade data.
6.2.7 The DGCI&S has reported that the possibility of some of the transactions not being reported for the purpose of compilation of Foreign Trade Statistics cannot be totally ruled out. To what extent the existing data-capture-mechanism can check this situation needs examination.
6.2.8 Both the detailed publications namely, MSFTI and SFTIC are voluminous and hard copies are difficult to deal with particularly the issues relating to the end of the financial year. Further, at present, the DGCI&S does not have a website for dissemination of the data compiled by them.
Conclusions and Recommendations
6.2.9 After reviewing the existing mechanism for compilation of Foreign Trade Statistics, the Commission recommends that:
Measures such as making available the entire code list on the website; introducing the standard query system for assigning an appropriate code for each item and feedback system from the exporters for amendment and widening the coding structure, etc. should be taken to assist the exporters in reporting the proper Codes as envisaged in the DGFT notification. A similar notification for imports should also be issued.
The possibility of releasing commodity-wise and country-wise details of imports and exports of crude oil and petroleum products should be explored.
An effective mechanism between the customs houses and DGCI&S to ensure complete coverage of all transactions in the compilation of Foreign Trade Statistics should be evolved.
All the Customs Houses and Ports including DGCI&S should be brought under the EDI system in a phased manner to eliminate the errors in data transfer and minimise the time-lag in the processing and release of data. Priority to bring the remaining customs houses under EDI scheme should be given to those ports where the volume of trade transaction is significant.
DGCI&S should take steps to bring out the publications, Monthly Statistics of Foreign Trade of India and Statistics of Foreign Trade of India by Countries within a period of about one month from the release of aggregate foreign trade data through the press note. In such a situation, the monthly Brochure entitled, Foreign Trade Statistics of India (Principal Commodities and Countries) can be dispensed with.
DGCI&S should make available on website the key results of Foreign Trade Statistics released through its various publications.
