Exporter Status Certificate Will Be Issued Based on Electronic Data

The Union Minister of Commerce and Industry unveiled a significant initiative to issue system-based automatic ‘Status Holder’ certificates under the Foreign Trade Policy (FTP) 2023. The exporters need not apply to the Directorate General of Foreign Trade (DGFT) office for a Status Certificate now. 

The export recognition will be provided by the IT system based on the available Directorate General of Commercial Intelligence and Statistics (DGCIS) merchandise export electronic data and other risk parameters.

At present, the exporters must file an online application and an export certificate from a chartered accountant for the grant of status. The DGFT regional offices will issue the certificate in three days. 

The new arrangement will simplify the regime, and exporters need not file any application. The certification is granted in August every year based on the annual export figures available with the partner government agency, i.e. DGCIS. It will reduce compliance burden, promote ease of doing business and recognise the importance and need of collaboration within the government.

Exporters eligible for a higher status based on the additional export data relating to deemed exports, services export or double weightage to some entities like MSME, etc., not getting captured in disaggregated form, can apply online for a status modification later.

The Status Holder certification programme gives credibility to Indian exporters in the international markets. It also provides certain other privileges, including priority custom clearances on a self-declaration basis, simplified procedures under FTP 2023, exemption from filing bank guarantees for FTP schemes, exemption from compulsory negotiation of documents through banks, etc. 

With the launch of this new system, the Department of Commerce will recognise about 20,000 exporters under the FTP 2023 as Status Holders, which will be a jump from the earlier number of 12,518 exporters. 

On achieving the prescribed export performance, status recognition as one, two, three, four and five-star is accorded to the eligible applicants as per their export performance. The new system will significantly increase one-star category status certification, the lowest category and requires an export performance of at least USD 3 million in the last three preceding financial years plus the three months of the current financial year. 

It will enable the government to help many small exporting entities, create a vibrant export ecosystem and reach our export target of USD 2 trillion by 2030.

In line with Digital India, various e-initiatives have been implemented where no manual processing or examination is required, and multiple permissions or authorisations are issued under FTP 2023 based on a self-declaration of the exporter and risk management system, including the online issue of the Importer Exporter Code (IEC) number and renewal and issue of Advance Authorisations.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in