India has recently emerged as one of the world’s fastest-growing economies, overtaking the United Kingdom in GDP. According to the 2023 World GDP ranking, India has secured its position as the 5th largest economy globally, boasting an estimated GDP exceeding 3.4 trillion dollars and a population of over 1 billion. With a rapidly growing middle class and a strong appetite for foreign goods and services, India’s Economy Survey forecasts an impressive growth rate of 6.5% for the fiscal year 2023-24. This remarkable growth trajectory is driven by increasing consumption and investments, both from domestic and international markets, propelling India towards a higher-ranking GDP on the global stage.

For any global company considering expansion, India offers a ripe opportunity. The timing couldn’t be better to enter and operate in India, leveraging the vast business potential. Under the Manufacture and Other Operations in Customs Warehouse (MOOWR) scheme, global companies can establish their facilities in India. MOOWR represents a set of regulations designed to facilitate the establishment of manufacturing and other operations facilities anywhere in India, with the overarching goal of positioning India as a global manufacturing and assembly hub. In this article, we will delve into the benefits that international companies and organizations can derive from manufacturing and assembling their products in India under MOOWR.

MOOWR, or the Manufacturing or Other Operations in Warehouse Regulations, is a comprehensive set of guidelines published by the Indian government to encourage foreign investment in the country. This scheme allows anyone to establish manufacturing or assembling units in India without any quota system or export obligations against imports. Furthermore, it extends its benefits to manufacturers or traders importing goods for domestic sale. The primary aim of MOOWR is to simplify and streamline the process of setting up operational units while providing various incentives to businesses that choose to operate in India.

India presents a compelling case for manufacturing due to its vast domestic market and an abundant pool of young, talented, and cost-effective human resources. Whether for short-term or long-term objectives, establishing manufacturing operations in India is not a matter of “Why,” but “When.” While challenges may exist in setting up production facilities in India, MOOWR provides effective solutions to navigate and overcome these challenges.

For international companies or organizations looking to expand their operations in India, MOOWR offers several significant advantages:

1. Simplified Setup: MOOWR streamlines the process of setting up manufacturing and other operations in India. The scheme provides a clear framework for establishing operations, helping foreign companies, and even Indian subsidiaries navigate India’s complex regulatory landscape efficiently. This translates into savings in time, money, and resources.
2. Financial Incentives: MOOWR offers duty exemptions and other financial incentives, enabling businesses to reduce costs and enhance profitability.
3. Streamlined Customs Procedures: Businesses operating under MOOWR can enjoy streamlined customs procedures, reducing delays and saving time during imports and exports.
4. Access to a Growing Market: Operating under MOOWR enables businesses to tap into the vast Indian market, characterized by a rapidly expanding middle class with a strong demand for foreign goods and services.

MOOWR reflects the Indian government’s commitment to boosting the “Atmanirbhar Bharat” or “Make in India” initiative. Key highlights include:

• Single Approval & Form: A single application cum approval form simplifies the process for obtaining a license for a private bonded facility and permission for manufacturing and other operations.
• No Time Restriction for Warehousing: Capital and non-capital goods can be stored in warehouses until they are cleared and consumed, without any time constraints.
• No Geographical Limitation: New manufacturing facilities can be established, or existing ones can be converted into bonded manufacturing facilities, regardless of their location in India.
• Easy Compliance: All records of manufacturing and other operations can be maintained digitally in a single format, simplifying compliance.

In conclusion, MOOWR represents a crucial set of guidelines for any company aiming to expand its operations in India. By offering a clear framework for establishing operations and providing various incentives and benefits, MOOWR empowers businesses to navigate India’s complex regulatory landscape, reduce costs, and enhance profitability. India’s ascent as a global manufacturing powerhouse presents an exciting opportunity for international companies to participate in and contribute to this extraordinary economic growth journey.

Geographical Indication (GI) is a label applied to goods with a particular origin and that have traits or a reputation derived from that origin. It became operative as of September 2003. The first Indian product to receive a GI label was Darjeeling Tea.

India’s Geographical Indication Register, part of the Ministry of Commerce and Industry’s Department of Industry Promotion and Internal Trade, issues GI tags.

The majority of the time, agriculture, food, wine, alcoholic beverages, handicrafts, and industrial products use geographical indications.

The Government has placed great emphasis on connecting farmer producer organizations (FPOs), food producer companies (FPCs), and exporters with international business communities to create an export hub in V In 2020, virtual buyer-seller meets were organized with UAE and USA, two of the largest export markets for APEDA scheduled products, in association with the Embassy of India in Abu Dhabi and the Embassy of India in Washington DC.

The meet on GI products provided a platform for interaction between Indian exporters and importers of USA and UAE. The exporters were informed about the potential GI products for exports such as Basmati Rice, Mango, Pomegranates, Bangalore Rose Onions, SangliGrapes/Raisin, Banana, and products of the North-Eastern Region such as Joha Rice of Assam, Black Rice (Chak-Hao), Naga Mircha, and their derived processed products. From April 2020 to March 2021, VBSMs were held with potential importing countries such as UAE, Indonesia, Kuwait Iran, Thailand, Bhutan, Belgium, Switzerland, Germany, Saudi Arabia, Uzbekistan, etc., for the promotion of APEDA scheduled products. Special focus was given on the export of GI-tagged products.

APEDA also organized in-store promotional programs in importing countries in association with foreign retailers such as Al-Zajira Group of Bahrain and Family Food Center of Doha, Qatar. Dispatch of samples of GI-tagged Nanjangud Banana from Karnataka to LuLu Group, UAE was also facilitated to enhance exports.

As of date, there are 417 registered GI products and of them, around 150 GI tagged products are agricultural and food products, out of which more than 100 registered GI products fall under the category of APEDA scheduled products (Cereals, Fresh Fruits and vegetables, processed products, etc).

The world has changed a lot and yet has to change a lot. Sensing the significance of trade across nations as an engine of economic growth both at national and global levels, nations and global bodies committed to global growth are coming under a common banner of trade laws, practices and facilitation as well. Global trade is full of complexities and uncertainties. To aid trade among countries take a high-pedestal growth, more facilitation by cutting down formalities to the accepted minimum level is needed. India’s track record is not all that enviable with debilitating effect on trade achievement.

The Trade Facilitation Agreement (TFA) is a part of a broader reform to boost international trade designed at the Ministerial Conference of WTO in Bali, Indonesia in December, 2013, continued from Doha Meet. The TFA, which aims at simplifying customs procedure, increasing transparency and reducing transactions cost, is being pushed by the US and other developed nations as they seek to bolster their economies through a uniform and easy procedures at customs. The TFA, through a worldwide reform of duties and tariffs, and a reduction in red tape at international borders, aims to ease trade relations between countries. Trade facilitation agreement (TFA) is a trade protocol aiming to give a spur and do away with the stumbling blocks in doing international trade between various countries.

• The facility of deferred payment – Import Duty payment not required at the time of customs clearance
• Introduction of Revised Authorised Economic Programme (AEO): greater facilitation and self-certification
• Relaxation in Insurance cover/Bond/BG
  • Requirement of Insurance cover to be taken by Customs Cargo Service Providers (CCSP) in respect of goods stored in Customs Areas has been brought down from 30 days to 10 day
• Indian Customs Single Window Project –Online message exchange
  Indian Customs has introduced SWIFT (Single Window Interface for Facilitating Trade) for ensuring ease of doing business. Under Indian Customs Single Window Project, the importers electronically lodge their Customs clearance documents at a single point only with the Customs
• Reduction in mandatory documents for imports and export
  In order to simplify procedures to facilitate genuine trade, CBEC has reduced the number of mandatory documents and prescribed only three mandatory documents for general import/export. The packing list and commercial invoice have been merged into a single document for Customs purposes.
• Digital Signature
  Adoption of Digital Signature: In order to encourage paperless working and dispense with the requirement of physical submission of documents ‘Digital Signature’ has been introduced for importers, exporters, airlines, shipping lines etc
• 24×7 Customs Clearance
• Abolition of Mate Receipt
  • With the automation of Customs procedures, manual issuance of mate receipt for containerized cargo has become redundant and therefore dispensed with.
• Single Window Interface for Facilitation of Trade has now been extended to Export
• Special Valuation Branches: The procedure for handling related party transactions and those involving special relationships is completely revamped. Extra Duty Deposits waived and the provisions for renewal of SVB orders have also been dispensed.
• National Committee on Trade Facilitation (NCTF)- NCTF has been constituted for the implementation of the WTO Trade Facilitation Agreement.
• CBIC abolish renewals of Licence/Registration in Customs Brokers Licensing Regulations, 2021 and Sea Cargo Manifest and Transhipment Regulations, 2018
• No requirement to seek periodic renewal of AEO-T1 certification: circular No. 18/2021-Customs dated July 31st, 2021
• Online Filing of BE Amendment
  The facility for filing the amendment online through ICEGATE has been operationalized.
• Online Module to update Bank account details – IEC Holders will be able to update bank account number for Government Incentive disbursal –IGST Refund

The Union Cabinet meeting held by Honourable PM of India Mr Narendra Modi has approved to continue to provide Rebate of State and Central Taxes and Levies (RoSCTL) with the same rates to the Textile exporter as mentioned by the Textile Ministry for exports of apparel/garments. This will continue till March 31, 2024, this will help the Textile sector to boost & grow. This move will also help in enhancing the competitiveness & Productivity of the labour-intensive garment sector.

Sector enjoying RoSCTL will not be eligible to apply for benefit under RoDTEP new scheme launched by Government of India in new Budget for Foreign Trade Policy 2021-2025 which is implemented in place of MEIS scheme which is no more valid from December 31, 2021, which is intended to benefit other Export sectors other than Textile / Garment.

All the revenue details related to allotment of the script will be handled & maintained in electronic ledger format by the Revenue department in customs server & will be available to view by Exporters through ICDGATE. This script can be used by Exporter to import Raw material, Equipment & machinery without paying Basic customs duty & this script will be freely transferable to any other Importer in case the Exporter is not making any export this can be another form of revenue for them.

Textile ministry along with the department of revenue will be implementing a revised standard guide for the RoSCTL scheme with required flexibilities to fine-tune the operational details, implementation modalities and scheduling.

RoSCTL extension is expected to make Indian Textile products globally competitive by rebating all embedded taxes/levies which are currently not being rebated under any other mechanism. Initially, under the RoSCTL scheme, the maximum rate of rebate for apparel was 6.05 per cent while for made-ups this was up to 8.2%.

The made-up segment comprises home textiles products such as bed linen, curtains, pillows and carpets. Commenting on the latest decision, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said the extension will help exporters get all embedded taxes and make products globally competitive.

IT is expected that the extension of RoSCTL will be bringing back positive sentiments among the Indian garment & textile segment, which indirectly will help the Indian textile value chain attain USD 100 billion annual exports in the next three years. The government is expecting this scheme will prove to be a major strategic decision towards generating lakhs of new employment, particularly for the vulnerable sections, including semi-skilled, rural youth, migrants and women in the MSME segment.

MSME Importers who do not have any manufacturing facility can now avail IGCR2017 to Import goods at a concessional customs duty and get the final goods manufactured entirely on Job work basis. (Gold/ Jewellery / Precious metals have been excluded )
In view of demands from trade and Industry and having regard to their changing needs as per prevalent global practices customs has introduced an amendment to existing IGCR rules 2017 with amendment rules 2021 through circular No 10/2021 Dated 17th May 2021 .

Key Highlights of the said Amended Rules 2021

• The facility of carrying out job work under the ambit of IGCR has been introduced
• The scope of the job work facility has been extended to an importer who is a manufacturer but without complete manufacturing facility. Also, 100% out-sourcing for manufacture of goods on job-work basis has been permitted for importers who do not have any manufacturing facility at all.

• An option has been given to the importers to import capital goods for a specified purpose at a concessional rate of duty and after having put such capital goods to use for the said purpose, clear the same after payment of the differential duty and interest, at a depreciated value, with permission from the jurisdictional Customs

Procedures to be followed by Importer

• One time – Prior Intimation of intent to avail IGCR Benefit:
• The importer is required to submit a one-time continuity bond, to cover all the imports undertaken under this procedure
• Intimation before import: (estimated quantity and value of goods to be imported, to be furnished with jurisdictional Customs Officer)
• Quarterly return and maintenance of account

As the current Exports Incentive schemes Published in India’s Foreign Trade policy are being challenged in WTO by various countries for providing Exports Incentives which is against the Article 3.1of the WTO subsidies and countervailing agreement and moreover, the Incentive rates are getting reduced every year and procedure complexities are more in claiming the same at the right time which affects the working capital. In this background, Indian Manufactures should look into other scheme options like MOOWR, 2019 where Customs Duty deferment On Import of Capital Goods and raw materials /Packing Materials which is WTO Compliant

Section 65 of the Customs Act, 1962 (‘the Act’) provides that the owner of any warehoused goods may carry on any manufacturing process or other operations in the warehouse in relation to such goods with the permission of Principal Commissioner of Customs or Commissioner of Customs (specified officers) and subject to the prescribed conditions.

In supersession of MOOWR, 1966, the Central Board of Indirect Taxes and Customs (CBIC) notified Manufacture and Other Operations in Warehouse Regulations, 2019 on 19 June 2019.

With the Government’s continuous efforts to promote India as the manufacturing hub globally and the commitment towards ease of doing business, another initiative in this direction by the Central Board of Indirect Taxes (CBIC) is allowing import of raw materials and capital goods without payment of duty for manufacturing and other operations in a bonded manufacturing facility.

When the raw materials or capital goods are imported, the import duty on them is deferred. If these imported inputs are utilised for exports, the deferred duty is exempted. Only when the finished goods are cleared to the domestic market, import duty is to be paid on the imported raw materials used in the production. Import duty on capital goods is to be paid if and when the capital goods are cleared to the domestic market.

CBIC has launched paperless customs exports processing, a move aimed at trade facilitation. Under this Initiative a secure QR code enabled LEO copy and Gate pass will be sent to exporters immediately.
Towards that, the Customs department plans to roll out pan-India faceless assessment by December 31 in a phased manner, and has started the same at Chennai and Bengaluru ports from June 8. This electronic Final LEO copy can serve multiple purposes such as being shared with DGFT, Banks etc. This reform will yield immense benefits in terms of saving the time and cost of compliance for the trade, thereby enhancing the ease of doing business, while providing enhanced security features for verification of authenticity and validity of the electronic document.

Directorate General of Foreign Trade (DGFT) will launch a new digital platform on July 13 the first phase of which will cater to the services related to the issuance of Import Export Code (IEC), modification, amendment processes along with a Chatbot (a virtual assistant). The platform is aimed to help traders electronically file their application related to IEC, various other online modules relating to Advance Authorisation, EPCG, and Exports Obligation Discharge which are part of next phase will be rolled out subsequently after the first phase stabilizes.