INFORMATION TECHNOLOGY IN INTERNATIONAL BUSINESS

INTRODUCTION

Information technology (IT) is the use of any computers, storage, networking and other physical devices, infrastructure and processes to create, process, store, secure and exchange all forms of electronic data. .Therefore having a substantial impact on both the practice and the law of international trade, notably in the use of electronic documents to replace paper, the so-called electronic data interchange (EDI).

REASONS FOR THE GROWTH IT IN INTERNATIONAL TRADE

• Falling IT prices favor IT consumers and net importers.

• Increased variety of IT products used by business enhances innovation.

• Economies of scale favor high volume IT producers and net exporters.

• Greatest benefits of business productivity software.

What is EDI System

How EDI System Work

EDI system at earlier time were the use of human resources was a lot. It was a time consuming process and needed lot of caution to omit human error on the paper document.Now with the use of advance IT sources the time is almost less than half needed for all the data to transfer to all the stakeholder in the international business.

The Indian Customs EDI System (ICES) is now operational at 134 major customs locations handling nearly 98% of India's International trade in terms of import and export consignments. ICES has two aspects:Internal Automation of the Custom House for a comprehensive, paperless, fully automated customs clearance system that makes the functioning of Customs clearance transparent and efficient.Online, real-time electronic interface with the trade, transport, Banks and regulatory agencies concerned with customs clearance of import and export cargo through ICEGATE.

OBJECTIVE•The objective of ICES is to facilitate acceptance of documents electronically and exchange information electronically between agencies involved in International trade. To facilitate, streamline and expedite customs clearance for imports, electronic processing of Bill of Entry has been introduced. It replaces all manual operations.•ICES is designed to exchange/transact customs clearance related information electronically using Electronic Data Interchange (EDI). A large number of documents that trade, transport and regulatory agencies (collectively called Trading Partners) are required to submit/ receive in the process of live customs clearance are now being processed online.

Three Systems are major Components of Indian Custom automation

The ICES running at 134 locations. ICES has to automatically receive and process all incoming messages. ICES generate all outgoing messages automatically at the appropriate stage of the clearance process.ICEGATE is the interface of ICES with the external world for customs clearance related messages and sharing of trade Statistics/Customs clearance data with licensing and regulatory agencies such as DGFT, DGCI&S, Ministry of Steel, RBI etc.RMS(Risk Management System) is the 3rd component which facilitates the compliant trade segregating the transactions requiring deeper scrutiny by customs officers.

SINGLE WINDOW INTERFACE FOR FACILITING TRADE

1. 24x7 Customs Clearance: With effect from 31.12.2014, facility of 24x7 Customs clearance for specified imports, namely, goods covered under 'facilitated' Bills of Entry and specified exports, namely, factory stuffed containers and goods exported under free Shipping Bills will be made available in 18 sea ports. Similarly, facility of 24x7 Customs clearance for specified imports, namely, goods covered by facilitated Bills of Entry and all exports viz. goods covered by all Shipping Bills has been extended at 17 air cargo complexes. This will help in faster clearance of such imported and export goods, reduce dwell time and lower the transaction cost.

2. Single Window Project -Online message exchange: Single Window provides a

common platform to EXIM trade to meet requirements of all regulatory agencies (such as Animal Quarantine, Plant Quarantine, Drug Controller, Textile Committee etc) through message exchange. It is basically a network of cooperating facilities bound by trust and set of agreed interface specifications in which trade has seamless access to regulatory services delivered through electronic means. Benefits of Single Window Scheme include ease of doing business, reduced costs, enhanced transparency, reduced duplicity and cost of compliance and optimal utilization of resources.

4 Adoption of Digital Signature: To dispense with requirement of physical submission of documents and encourage paper less working, with effect from 01.04.2015 on an optional basis the facility of 'Digital Signature' has been introduced for importers, exporters, airlines, shipping lines etc. However, for importers registered under the 'Accredited Client Programmers' (ACP), digital signatures are mandatory with effect from 01.05.2015.

5. Reduction in mandatory documents for imports and exports: To facilitate trade and to simplify

procedures, number of mandatory documents and prescribed only three mandatory export and import documents has been reduced. However, for import and export of special nature under preferential agreements etc., the requisite documents will be required to be submitted.

6. Setting Up of Customs Clearance Facilitation Committee (CCFC): To ensure expeditious clearance of EXIM goods a high level administrative Committee i.e. 'Customs Clearance Facilitation Committee' (CCFC) has been put in place at every major Customs seaport and airport under the chairmanship of Chief Commissioner of Customs/Commissioner of Customs. This Committee would include the senior-most functionary of the other government departments/agencies, such as the Food Safety Standards Authority of India/the Port Health Officer (PHO); the Plant Quarantine, Animal Quarantine Authorities; the Drug Controller of India (CDSO); the Textile Committee; the Port Trust / the Airport Authority of India / Custodians; the Wild Life Authorities; the Railways/CONCOR; the Pollution Control Board.

7. Scientific and technical instruments, apparatus, etc. imported by public funded and other research institutions registered with DSIR are eligible for concessional customs duties. When a new research institution was set up, initially the DSIR registration was not available leading to non-eligibility to aforesaid exemption. For such cases, a provision has been made for refund of customs duties paid at the time of import on submission of such certificate from the Department of Scientific & Industrial Research (DSIR)

The single-window system is a trade facilitation idea. As such, the implementation of a single window system enables international (cross-border) traders to submit regulatory documents at a single location and/or single entity. Such documents are typically customs declarations, applications for import/export permits, and other supporting documents such as certificates of origin and trading invoices.

BEFORE SWIFT

AFTER SWIFT

BENEFITS OF THE SINGLE WINDOW

The intended benefits of single windows are aimed at key stakeholders in the formalities and goods movement communities, which typically comprise:

1. Government and its various compliance agencies ,port, logistics and transport communities 2. Traders and their trade professionals (customs brokers, freight forwards and shipping agents).3. To raise regional and national awareness of the potential of automated trade facilitation and the single

window, and to help facilitate regional collaboration, integration and exchange of regional trade information.

4. Enhanced collections of fees, duties and penalties5. More comprehensive, streamlined and automated business compliance to Government legislative and

regulatory requirements, including the terms of international trade treaties.6. Enhanced risk analysis and management and improved security.7. Reductions in corruption and illegal trade activities, enhanced transparency and accountability.8. Cost reductions through minimized clerical efforts, time taken to reduce and to eliminate delays, and more

predictable, reliable and authoritative decisions.9. Faster goods clearance, exception handling and dispute resolution, leading to reduced inventory holding

costs.10. Predictable and reliable consignment clearance and availability of advanced goods release information.11. Reduction in face-to-face meetings, greater transparency and reduced opportunities for rent seeking and

corruption.12. Faster movement of goods through formalities and trade junctions, leading to better and more productive

utilization of resources.13. Reliable information on timing of goods movement, allowing accurate scheduling, allocation of resources

and improved accuracy of information provided to clients.14. More productive and flexible use of human resources.15. The ability to accurately schedule goods collection and discharge times and locations.16. Better end-to-end audits of operation.