India has been working on policies and procedures to enable trade relations with other countries. In the wake of this, India and East African Community trading bloc have signed a joint action plan to boost bilateral trade.
The joint action plan signed between the two sides will help ensure faster goods clearance. The agreement will pave the way for a mutual recognition agreement between the two sides.
Once realized, the Mutual recognition agreement MRA will benefit companies under the Authorized Economic operator’s programme run by EAC partner states under the coordination of the EAC secretariat since 2008. EAC is an intergovernmental organization of six countries – Uganda, Rwanda, Kenya, South Sudan and Burundi.
The fully digitalized system and valid trading entities would generate security in the entire supply chain in cross-border trading. Because of mutual recognition and fairly steady trade between EAC and India over the past five years, India was chosen as an MRA partner.
The MRA will facilitate EAC traders under the AEO programme in India and vice versa, enabling quick clearance of their goods and resulting in savings in costs and time. The AEO programme is a concept obtained from the WCO – World Customs Organization SAFE Standards Framework. The WCO Council adopted this instrument in 2005 to enhance the facilitation and security of global trade.
The programme works on the principle of compliance, trust and partnership whereby economic operators that showcase compliance with supply chain security standards of the customs department are recognized as low-risk clients with whom Customs enters into a partnership arrangement.
One of the key advantages of being an AEO is reduced customs controls when transacting business with customs departments and recognition as a low-risk and reliable business partner by other traders and government agencies.
Apart from savings in time and cost, the MRA between the EAC and India is set to promote growth in sustainable trade between the two trade partners while eliminating non-tariff barriers and enhancing cooperation between the customs administrators of India and EAC.