Presentation to World Bank on observation and

initiatives on 'Ease of Doing Business'

Aspects covered in Presentation

• Main initiatives and Reform update

• Export case study

• Import case study

• Good Practices

• Issues in Methodology

• Impact of Reforms

• Shift in Approach

Reform – Perform – Transform A Journey towards achieving excellence

Brought cargo release time as centre of focus in addition to Revenue Collection

Enhanced process efficiency by implementing several modernised procedures

Renewed and intensive focus on Digital Customs - New Investment into IT Infrastructure and Applications – Technology Refresh

Better coordination amongst various stakeholders in the border clearance ecosystem

Extensive outreach, perception survey and capacity building efforts

Trading Across Borders- Main Initiatives

Single Window

(SWIFT)

Coordinated Border

Management

Training and Communication strategy

Move to paperless environment

Revamped AEO

Trade Facilitation Agreement

Introduced Customs Single window - SWIFT

SWIFT

Importers

Exporters

CHAs Banks

RBI

Airlines Shipping

lines Freight

Forwarders

Ports, Airports

Air cargo complexes

ICD/CFS

Other

Customs Administrations

Other Government

Agencies

24/7 integrated system

Coordinated Border Management

Customs Clearance Facilitation Committees

• Customs-led Standing/permanent interagency bodies

• Local and National levels

Delegation of authority to Customs by other government agencies, wherever feasible

Integrated Risk Assessment

• Customs to manage automated selectivity criteria for Participating Government Agencies

Integrated time release studies

Integrated Check Posts

6

Reform update - 1

Import time – Border

complaince

Export time – Border

compliance

Import cost – Border

compliance

Import/ export time –

Documentary compliance

Improvements in Risk Management System resulting in increase in

facilitation – Reduced level of examination

Increased volumes of Direct Port Entry – for export containers

Single Window Project – SWIFT - Integrated declaration, integrated risk

assessment and reduced documentation

Increased volumes of Direct Port Delivery – for import containers

Email notification service to importers

Reducing / eliminating printouts in Customs Clearance

I

II

III

IV

V

VI

Export cost – Border

compliance

Dedicated “DPD/RMS Facilitation Centre” has been created in JNCH VII

7

Import time – Border

compliance

Export time – Border

compliance

Import cost – Border

compliance

Import/ export time –

Documentary compliance

Exemption of Merchant Overtime Charges for CFSs attached JNPT

Amendments in warehousing provisions

Abolition of Mate Receipt

Single Window interface extended to Export

Payment of duty on the same day in case of self-assessed bill of entry

Mandatory to file a Bill of Entry before the end of the next day

I

II

III

IV

V

VI

Export cost – Border

compliance

Simplification of Amendment Procedure – for manifests and declarations VII

Reform update - 2

8

Import time – Border

compliance

Export time – Border

compliance

Import cost – Border

compliance

Import/ export time –

Documentary compliance

Revised AEO programme

Advance of entry inward procedure – Processing prior to berthing of the

vessel

Facility of deferred payment

Integration of ICEGATE with port community system and terminals

Filing of documents with digital signatures

Interlinked Customs data with remittance data of Reserve Bank of India

I

II

III

IV

V

VI

Export cost – Border

compliance

Automation of form 13 VII

Reform update - 3

9

Federation of Indian Export Organizations roped in to do time

study of containers at JNPT

0

43

44

41

42

Hrs

-6%

Jan’17

41

Oct’16

44

Import dwell time: Unloaded to gate

0.0

87.0

88.0

88.5

86.5

87.5

Hrs -3%

2016-17

86

2015-16

88

Export dwell time: Gate in to loading

Reduction in dwell time observed within the duration of time stamp study

10

DPD increased to significantly reduce import time

~650 customers now allowed to

directly lift containers from yard ~30% of containers are lifted directly from port

639

1100

200

400

600

800

FY15

# of clients

FY17

+5,709.09%

FY16

28

10095

72

50

20

40

80

60

100

%

Sept’16 Apr’15 March’17

CFS/ICD

DPD

~28.2

(port

dwell)

+

171 hrs

CFS

dwell

~52.6

hrs

Import time

Time to import (BC)

I

Note: DPD % calculated as number of direct delivery containers as fraction of total non-empty containers Source: Customs data, FIEO study

11

Berth productivity improved through multiple initiatives

1. Assuming twin-lift ratio can be increased to 38%; 2. Assuming 10% improvement of productivity required from reducing idle time and productivity gap of RTGCs; 3. Assuming 10% improvement of productivity required from upgrading the current RTGCs (esp. the old equipments in the IM yard); 4. Assuming more RTGCs per QCs are required to support additional QC moves Note: excluding other QC-related levers Source: JNPT data, BCG report on Project Unnati

Multiple initiatives undertaken to improve berth productivity

13% increase in berth productivity

achieved

70

0

80

75

April’16

79

69

April’15

70

April’17

+13%

Berth

productivity GMPH)

Time to import & export (BC)

II

Improve twin lift

Improve operator productivity

Increase RTGC utilization through better yard planning

Add additional RTGCs

Increase number of RTGC drivers

12

Dedicated parking lot created before gate for trucks from

hinterland Time to export (BC)

III

Trucks with factory stuffed ctnrs caused

congestion in port approach road

Dedicated parking lot and RFID at gates

to address congestion issue

Factory

CFS

Port

Arrive at

different

times

Park on road

side if arrived

before gate

opening

Factory

CFS

Port

Parking lot

8-12 hours

for ~15-30KM

distance due

to congestion

Efforts acknowledged by stakeholders

13

Parking lot converted to custom processing zone

Factory stuffed containers needed to go

to CFS to get customs Let Export Order

LEO issued in parking lot with nominal

charge of USD 1

Resulted in time and cost for importers

Factory

CFS

Port

Upto USD 60

charged per

container

Factory

CFS

Port

Parking lot

Charge:

USD 1 per

ctnr

Cost of export (BC)

Circular issued in Dec'16

IV

LEO

LEO

14

Direct port delivery (DPD) reduces overall import cost

significantly

Mandatory shifting to CFS for customs

OOC resulted in additional cost for

importers

OOC provided within Port to DPD

customers

Resulted in time and cost for importers

Factory

CFS

Port

All import

containers had to

be shifted to CFS

mandatorily

Factory

CFS

Port

Cost of import (BC)

Upto 28% of ctnrs availing DPD

V

USD 120-330

charged at CFS

Importers to save

CFS charges and

inventory cost of

7-8 days of CFS

storage. Cost

limited to USD

25-35

OOC

OOC

15

Documentation time from port side reduced substantially by

migrating e-form 13 issuance online

Manual filling of details and issuance

of gate pass took ~1-2 hrs per truck

1 2 3 4 5 6

a b c d e f

Custo

ms

CH

A

85 Min/

TT

Terminal

Gates

CISF

1 2 3 4 5 6

a b c d e f

Terminal

Gates

CISF

Paperless

online

eform 13

issuance

Online e-Form 13 system instituted to

reduce documentation time

Time to export (DC)

VI

16

Icegate integrated with PCS and TOS to enable paperless

operations

ICEGATE

[Customs db]

Port Community

System

Terminal Operation System

Implemented on Dec'16 Delivery order

OOC document

SMTP

IGM

Form 13, Form 11

Import/ export advance list

Six + paper trails eliminated

VII

17

Significant component of export dwell time voluntary on part

of customers

CFS CFS to

gate

Gate

clearance Yard

Yard to

Ship

(Loading)

Port Control Non Port Control Partially controllable (by policy)

Upto 40 hours of voluntary stay

Requirement from importers

Not mandated by Port

Additional 10-12

hrs of loading

time

JNPT data

1

18

Substantial improvement seen across key performance

parameters

Bucket Metric Baseline FY14-15 Achieved

FY16-17

Overall port

performance

Avg. vessel turnaround time

(hours) 37 33.6

Berth Productivity

QC productivity (moves/ hr) 21.7 23.5

Gross Berth Productivity

(moves/hr) 74.8 78.6

Yard

RTGC moves per hour 9.8 10.6

Yard throughput (TEU per Ha) 24,000 25,833

Evacuation Truck gate processing time

(min) 91 25

Source: Port data

19

Context: India with DTF score of 57.19 in trading across

boundary section; Mumbai with score of 57.98

Value DTF

Export Time (BC) [hrs] 125 22

Export Time (DC) [hrs] 21 88

Import Time (BC) [hrs] 262 6

Import Time (DC) [hrs] 58 76

Export Cost (BC) [USD/Ctnr] 453 57

Export Cost (DC) [USD/Ctnr] 90 78

Import Cost (BC) [USD/Ctnr] 590 51

Import Cost(DC) [USD/Ctnr] 140 80

Value DTF

Export Time (BC) [hrs] 85 47

Export Time (DC) [hrs] 58 66

Import Time (BC) [hrs] 307 -

Import Time (DC) [hrs] 65 73

Export Cost (BC) [USD/Ctnr] 368 65

Export Cost (DC) [USD/Ctnr] 94 77

Import Cost (BC) [USD/Ctnr] 556 54

Import Cost(DC) [USD/Ctnr] 129 82

Value DTF

Export Time (BC) 106 34

Export Time (DC) 38 78

Import Time (BC) 283 -

Import Time (DC) 61 75

Export Cost (BC) 413 61

Export Cost (DC) 92 77

Import Cost (BC) 574 52

Import Cost(DC) 135 81

Delhi

Mumbai

India

Exports-time and cost study

Procedures Related to Customs

Para 2.3 (b)

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

38 34 8 4

Cost (USD)

97.14 170 50 50

20

Exports-time and cost study

Procedures Related to Port & Border Handling. Para 2.5b

21

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

87 50.82 72 86*

Cost (USD)

356 197.94 117 132

* - 42 Hrs for aggregation of containers at the request of exporter + 8 Hrs for vessel load planning + 36 Hrs for vessel operations (Unloading and loading) = 86 Hrs

Exports-time and cost study

Procedures Required by ALL Government Agencies: Border Compliance (Para 2.6)

22

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

125 84.82 80 90

Cost (USD)

453.14 367.94 167 182

Exports-time and cost study

Procedure Related to Document Preparation Para 2.7 (b)

23

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

21 58 3 2

Cost (USD)

90 94 10 10

Imports-time and cost study

Procedures Related to Customs

(Para 3.3 b)

24

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

70 111 24 14

Cost (USD)

211.43 213.5 50 50

Imports-time and cost study

25

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

192.17 196.24 170* 88

Cost (USD)

379 342.06 47 135

Procedures Related to Port & Border Handling [Para 3.5(b)]

* After deducting transit time from Mundra to Delhi

Imports-time and cost study

26

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

262.17 307.24 194 102

Cost (USD)

590.43 555.56 97 185

Procedures Required by ALL Government Agencies: Border Compliance (Para 3.6)

Imports-Time and cost study

Procedure Related to Document Preparation [Para 3.7(b)]

27

2017 DBR Delhi

2017 DBR Mumbai

Clearance Data Delhi

Clearance Data Mumbai

Time (Hours)

58 65 2.5 2.5

Cost (USD)

140 129 50 50

28

Concerns: Three structural parameters affect overall delays

and skew ranking – need to be factored in scoring

• Road vs. rail vs. sea

• Affects cargo

aggregation time • Trans-shipment vs.

gateway

• Affects container

handling and port

dwell time

• Direct port entry/

delivery vs. via CFS

• Mandatory CFS shifting

will result in extra

delays

Nature of freight at

border

Nature of port

Nature of evacuation

1

2

3

29

Port Consignments (8708)

Consignments (all

commodities)

JNPT 1449 ~450000

Chennai 3375 ~180000

Delhi ICD

Tughlakabad 26 ~90000

ICD Gurgaon 34 ~10000

Imports of Automobile Parts (8708) from Korea

June 2016 to March 2017 - Data at a Glance

30

Nature of freight transport at border creates big gaps in

overall DTF scores

1

Cargo aggregation time varies

significantly with mode of freight

Sea freight with significant gap w.r.t. road and

rail freight

Mode

Number

of ctnrs

in lot

Approx.

aggrega-

tion time

Loading/

unloading

time

Road 1-2 - -

Rail 80-90 ~5-6 hrs 2-3 hrs

Ship ~3000 ~40 hrs ~24-36 hrs

85

53

22120

50

100

Canada

JN

PT

Sw

itzerland

US

- N

YC

Hrs

Sw

eden

Indonesia

307

168

02120

200

400

Canada

JN

PT

Sw

itzerland

US

- N

YC

Hrs

Sw

eden

Indonesia

Import times

Export times

Large difference in delays resulting in big gaps in DTF scores Source: Ease of doing business 2017

31

High trans-shipment volumes can significantly reduce delays

RS 17.Apr.17:

Graph

Show a bar graph with different

ports – Singapore, Shanghai,

Busan vs. JNPT, Japan...

Show for export

2

Major trans-shipment hubs show

significantly low export border ctrl time Trans-shipment can result in lower

delays

Global trans-shipment hubs may trans-ship

their major trade commodity also

Not separating trans-shipment cargo from

gateway cargo can result in lower delays

Typically

~12 hrs > 24 hrs

85

48

23

12

0

20

40

60

80

100

Hrs

JNPT Surabaya Shanghai Singapore

Source: Ease of doing business 2017

85% 50% 0% 0%

Trans-

shipment

%

Port

Hinter

land

Port

+ Customs

clearance and cargo

aggregation time

32

Mandatory shifting to CFS can increase import time

3

CFS model results in higher border

compliance time

JNPT is designed to operate with CFS model

• Many of importers are small scale and needs

stuffing/ de-stuffing facility

• Port has storage yard shortage

Mindful of disadvantage, port is encouraging

DPD to reduce border compliance time

However still, importers tend to store

voluntarily in CFS

• Importers typically do not pay customs duty in

advance

• Traders choose to store in CFS till sale

• Several importers are small players with

limited space in their factories

~6x increase for same procedures via

CFS compared to DPD at JNPT

311

53

0

100

200

300

400

Hrs

JNPT - DPD JNPT - CFS

+491%

Import times

Source: ; FIEO study on 76,000 container samples in Feb'17, Ease of doing business 2017

33

Import time – Border

control

Export time – Border

control

Import cost – Border

control

Import/ export time –

Document control

Reduction in queuing time by putting up dedicated parking lots. Average

saving is 45 minutes

Cost reduction for export container (DPE) from USD 60 to USD 1 by

facilitating customs processing in parking lot

Reduced container handling time through multiple initiatives. Reduction

in terminal time for Import by 14.19 Hrs & Export by 10 Hrs YoY.

Cost reduction from USD 120-330 to USD 25-35 for import container

under DPD

67.14% of import declarations were cleared in less than 8 hrs

87% import declarations are being cleared in less than 2 days

I

II

III

IV

V

VI

Export cost – Border

control

14.34% in less than 24 hours and 5.75% with in less than 2 days VII

Impact of Reforms

Publicity Assistance Communication Education

Strategy for Service Delivery - Keep PACE with all Stakeholders

Shift in perception about Taxpayer to promote voluntary compliance

Control based approach

Trust based approach

Compliant Fence sitters Non - Compliant

Focus on Delivery of Services

35

THANK YOU