Jan. 10 – The Director General of Foreign Trade and the Enforcement Directorate signed a memorandum of understanding this week to allow for the sharing of foreign exchange realization data between exporters and relevant governmental departments in India. The new MoU will make mandatory the sharing of foreign exchange realization data through the e-BRC (Electronic Bank Realization Certificate) program, which was implemented last year. The digitalization of foreign exchange realization data is expected to increase efficiency for exporters operating in India.
Under the country’s Foreign Trade Policy (FTP), exporters are required to receive Bank Realization Certificates (BRC) on all exported goods, a process previously carried out through submitting physical records to the exporter’s relevant banking institution. Once issued a BRC, the exporter may claim FTP incentives and discharge their export obligations on foreign currency earning realizations, as well as receive VAT refunds from the state government. The e-BRC program will allow exporters to file electronically, saving them the time previously spent filling for the BRC in person.
“The process for BRC issuance and subsequent utilization were largely manual and department centric. The exporters suffered most as they had to run to banks and government departments for claiming benefits,” said Anup Pujari, the Director General of Foreign Trade.
According to a press release issued by the Indian government on Thursday, this “data sharing with government departments would increase transparency, reduce the human interface and improve the ease of doing business in India.”
“The e-BRC project is a significant step in this direction and will contribute considerably in reducing the transaction cost of our exporters,” commented Commerce Minister Anand Sharma during a press conference this week.
Currently, 90 banks offer exporters the e-BRC filing option, with tax departments in Delhi, Andra Pradesh, Haryana, Odisha and Chhattisgarh already making the data available to the Director General of Foreign Trade.
“This initiative has reduced the cost of transaction for exporters by eliminating their interface with banks (for issuance of BRC purposes) and enhanced the productivity of banks and the Director General of Foreign Trade,” stated the press release.
In addition to facilitating efficiency among exporters, the e-BRC data will also be used by the Director General of Foreign Trade to calculate India’s aggregate transaction-level export earnings, an important economic indicator for foreign trade growth.
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