Streamlining Food Trade through Technology and Data Analytics
• The Economic Survey 2018-19 brought forth the need for technology and data analytics in the food sector.
• However, studies point out that while agencies such as the Food Safety and Standards Authority of India (FSSAI) have taken several initiatives to implement technology and automation, there are gaps in processes.
• Moreover, in terms of documentation, importers and exporters are often unaware of the documentation requirements.
• Integration and sharing of information across agencies and across different ports of entry will go a long way in promoting the ease of doing business in food trade.
The report of the Logistics Development Committee, Economic Advisory Council to the Prime Minister (EAC-PM), October 2018, pointed out that despite various measures taken in the recent years by the central government to improve ease of doing business, there are delays and bottlenecks at the ports due to lack of predictability and certainty, resulting from manual interventions. The report recommended a shift towards a fully-facilitated trust-based clearance process through state-of-the-art risk management system.
More recently, the Economic Survey 2018-19 brought forth the need for technology and data analytics in the food sector. In this context, a survey based study by the authors covering 150 respondents titled, “Streamlining Food Imports for Trade Facilitation and Ease of Doing Business in India”, published by Academic Foundation, found that while agencies such as the Food Safety and Standards Authority of India (FSSAI) have taken several initiatives to implement technology and automation, there are gaps in processes, technology adaptations and inter-agency co-ordination.
These are resulting in delays and higher compliance costs. For example, even though pre-shipment filing of application has been made mandatory in the Customs’ ICEGATE portal, the FSSAI’s facility of pre-shipment filing in the Food Import Clearance System (FICS) is not mandatory and according to survey participants it is not being used by the importers. This is leading to delays.
To improve ease of doing business and India’s ranking in logistics performance indicators, there is an urgent need for backend process and IT integration across different export and import clearance agencies and all agencies should make pre-shipment filing mandatory. Unless import clearance portals of other agencies are fully integrated with ICEGATE, importers have to upload the same set of documents on multiple portals, which adversely impact ease of doing business.
Integration of system for real time exchange of data and information electronically between the Customs, FSSAI, and other government agencies would be necessary for a robust risk management system. The study found that opening up of the Indian economy to trade in food and feed products has led to the associated “trade” of hazards and risks, which can enter the country through imports. The FSSAI systems generate and operate on large volumes of data from various touch points with respect to importers, logistics companies, courier and express delivery bodies, food business operators, and other participating agencies.
This data can be used to identify high-risk and low-risk products, importers and countries. The high-risk products can then go through more examination while low-risk products can be cleared on a fast track route. Integration and sharing of information across agencies and across different ports of entry will not only ensure uniformity of processes but will also ensure that unsafe food products do not entry the country.
The survey found that since multiple clearance agencies are not putting down their requirements by a common product classification or HS codes, importers and exporters are often unaware of the documentation requirements. They often submit incomplete documents and in some cases no-objection is required from multiple agencies causing delays. Ideally, the requirements of different agencies such as the FSSAI, Agricultural and Processed Food Products Export Development Authority (APEDA), Plant and Animal Quarantines should be consolidated by product categories at HS 8-digit level in a technology based platform so that Customs and other stakeholders involved in the export and import processes are aware of the requirements and are able to verify if these are met. Unless this is done, a product cleared by an export control agency in India can be rejected or even banned in the importing country market leading to huge losses for the exporters.
To conclude, the growth in agriculture trade has posed a challenge to agencies in ensuring that food adheres to safety requirements such as the maximum permitted level of pesticide and other chemical residues and are free of animal and plant borne diseases. Products can be classified under high-risk and low-risk products and can even be banned. However, such classifications should be based on scientific evidence and the rationale for such classification has to be made public and shared with importers, exporters and other stakeholders.
Risk can be under various categories – importer/exporter related risk, product related risk, country related risk and so forth. These risks have to be identified by sharing information across agencies and even across countries, to understand how other countries are identifying, examining and analysing such risk and what measures have been taken to communicate and mitigate the risks. In this context, there is need to have greater collaborations with regional groups such as the European Union and countries such as the United States, Australia and Japan to understand how these countries are collating and collecting data and analysing them.
With widespread digitisation, data generated through cross-border trade can help in evidence based policymaking and can be used as proof in case of any legal dispute faced by India in international forums such as the World Trade Organization (WTO). Indian government agencies engaged in trade have to build frameworks for not only collecting data but also for archival and purging of historical data. There is need to segregate the data based on usage patterns and this, in turn, will define the way data needs to be stored. Such a stance can help India leapfrog to utilise the benefits of technological advances for ensuring food safety and standards and ease of doing business.
Dr. Arpita Mukherjee is a Professor at ICRIER. She has over 25 years of experience in policy-oriented research, working closely with policymakers in India, European Union, United States, Association of Southeast Asian Nations (ASEAN) and in East Asian countries. Dr Mukherjee has a PhD in Economics from the University of Portsmouth, UK. Prior to joining ICRIER, she worked with the UK-based think tank – Policy Studies Institute and taught at the University of Portsmouth.
Divya Satija is an economic research policy professional with over 9 years of experience in economic research, policy making, and government advisory services. She has a MA in Economics from Jamia Millia Islamia University. She has several publications to her credit, including national and international referred journals, book chapters and government reports. She also often contributes to newspapers and magazines.
Nice article depicting the ground situation. We implement IT systems in various government organizations and product classification is a perennial problem in many. Unfortunately very few realise its impact and tend to do something about it.