A Revolutionary Shift in Export Status Certificates

By Atif Gavakhadkar --
Friday, 13 Oct, 2023

In a groundbreaking move that promises to transform the export landscape for Micro, Small, and Medium Enterprises (MSMEs) in India, the Union Minister of Commerce & Industry, Shri Piyush Goyal, recently unveiled a revolutionary initiative to grant 'Status Holder' certificates under the Foreign Trade Policy (FTP) 2023. This change not only simplifies the process of obtaining these certificates but also emphasizes the importance of fostering collaboration within the government. The key beneficiaries of this streamlined system are undoubtedly the MSMEs.

Automatic Recognition: No More Applications Required

Traditionally, MSMEs and other exporters had to go through a time-consuming process of applying for 'Status Holder' certificates from the Directorate General of Foreign Trade (DGFT). However, this new initiative eliminates the need for manual or online applications. Instead, an IT system will automatically grant these certificates based on a combination of electronic data, specifically, merchandise export data from the Directorate General of Commercial Intelligence and Statistics (DGCIS) and various risk parameters.

Reducing the Compliance Burden: A Boost for MSMEs

For MSMEs, which often have limited resources and manpower, this is a game-changer. It significantly reduces the compliance burden and promotes a more business-friendly environment. The earlier requirement of filing online applications, along with export certificates from Chartered Accountants, is a thing of the past. This streamlined approach means that MSMEs can focus their efforts on growing their businesses rather than navigating a complex application process.

Annual Certification and Status Modification

One of the standout features of this new system is the annual certification process. Status Holder certificates will now be renewed every year in August, based on the previous year's export figures from Directorate General of Commercial Intelligence and Statistics (DGCIS). This not only simplifies the process but also provides MSMEs with regular, predictable access to the benefits associated with these certificates.

Furthermore, MSMEs that are eligible for higher status based on additional export data can apply for a status modification at a later date. This flexibility caters to the dynamic nature of MSMEs and their evolving export performances.

Boosting Credibility and Privileges for MSMEs

The 'Status Holder' certification program not only simplifies procedures but also enhances the credibility of Indian exporters in international markets. MSMEs holding these certificates are entitled to privileges such as simplified procedures under FTP 2023, priority customs clearance on a self-declaration basis, exemption from mandatory document negotiations through banks, and freedom from filing bank guarantees for FTP schemes.

A Quantum Leap in Recognition for MSMEs

With the introduction of this streamlined system, the Department of Commerce, Ministry of Commerce and Industry, is set to recognize around 20,000 exporters as Status Holders under FTP 2023. This marks a significant increase from the previous number of 12,518 exporters. It's noteworthy that the most substantial increase in Status certification is expected in the 1 Star category, which is the entry level, requiring an export performance of at least US$ 3 Million over a specified period. This is a positive development for MSMEs looking to expand their export activities.

Supporting MSMEs and India's Export Targets

This forward-thinking initiative aligns with the government's vision for a $2 trillion export target by 2030. By enabling MSMEs to access the benefits of Status Holder certificates more easily, the government is providing MSMEs with the tools to grow, compete on the global stage, and contribute to this ambitious target.

In line with India's 'Digital India' ethos, this initiative leverages technology to reduce manual processing and streamline procedures. Various e-initiatives have already been implemented, allowing 24X7 online issuance of Importer Exporter Code numbers (IEC), as well as issue and renewal of Advance Authorizations, making the entire process more efficient for MSMEs.

In conclusion, the unveiling of this streamlined system for Status Holder certificates is a significant step toward simplifying the export process for MSMEs and empowering them to explore new markets and opportunities. With the reduction in compliance burdens and a focus on digital initiatives, MSMEs can now take a more prominent role in India's export journey and contribute to the nation's economic growth.

A Revolutionary Shift in Export Status Certificates. In a groundbreaking move that promises to transform the export landscape for Micro, Small, and Medium Enterprises (MSMEs) in India, the Union Minister of Commerce & Industry, Shri Piyush Goyal, recently unveiled a revolutionary initiative to grant 'Status Holder' certificates under the Foreign Trade Policy (FTP) 2023. This change not only simplifies the process of obtaining these certificates but also emphasizes the importance of fostering collaboration within the government. The key beneficiaries of this streamlined system are undoubtedly the MSMEs.

Automatic Recognition: No More Applications Required

Traditionally, MSMEs and other exporters had to go through a time-consuming process of applying for 'Status Holder' certificates from the Directorate General of Foreign Trade (DGFT). However, this new initiative eliminates the need for manual or online applications. Instead, an IT system will automatically grant these certificates based on a combination of electronic data, specifically, merchandise export data from the Directorate General of Commercial Intelligence and Statistics (DGCIS) and various risk parameters.

Reducing the Compliance Burden: A Boost for MSMEs

For MSMEs, which often have limited resources and manpower, this is a game-changer. It significantly reduces the compliance burden and promotes a more business-friendly environment. The earlier requirement of filing online applications, along with export certificates from Chartered Accountants, is a thing of the past. This streamlined approach means that MSMEs can focus their efforts on growing their businesses rather than navigating a complex application process.

Annual Certification and Status Modification

One of the standout features of this new system is the annual certification process. Status Holder certificates will now be renewed every year in August, based on the previous year's export figures from Directorate General of Commercial Intelligence and Statistics (DGCIS). This not only simplifies the process but also provides MSMEs with regular, predictable access to the benefits associated with these certificates.

Furthermore, MSMEs that are eligible for higher status based on additional export data can apply for a status modification at a later date. This flexibility caters to the dynamic nature of MSMEs and their evolving export performances.

Boosting Credibility and Privileges for MSMEs

The 'Status Holder' certification program not only simplifies procedures but also enhances the credibility of Indian exporters in international markets. MSMEs holding these certificates are entitled to privileges such as simplified procedures under FTP 2023, priority customs clearance on a self-declaration basis, exemption from mandatory document negotiations through banks, and freedom from filing bank guarantees for FTP schemes.

A Quantum Leap in Recognition for MSMEs

With the introduction of this streamlined system, the Department of Commerce, Ministry of Commerce and Industry, is set to recognize around 20,000 exporters as Status Holders under FTP 2023. This marks a significant increase from the previous number of 12,518 exporters. It's noteworthy that the most substantial increase in Status certification is expected in the 1 Star category, which is the entry level, requiring an export performance of at least US$ 3 Million over a specified period. This is a positive development for MSMEs looking to expand their export activities.

Supporting MSMEs and India's Export Targets

This forward-thinking initiative aligns with the government's vision for a $2 trillion export target by 2030. By enabling MSMEs to access the benefits of Status Holder certificates more easily, the government is providing MSMEs with the tools to grow, compete on the global stage, and contribute to this ambitious target.

In line with India's 'Digital India' ethos, this initiative leverages technology to reduce manual processing and streamline procedures. Various e-initiatives have already been implemented, allowing 24X7 online issuance of Importer Exporter Code numbers (IEC), as well as issue and renewal of Advance Authorizations, making the entire process more efficient for MSMEs.

In conclusion, the unveiling of this streamlined system for Status Holder certificates is a significant step toward simplifying the export process for MSMEs and empowering them to explore new markets and opportunities. With the reduction in compliance burdens and a focus on digital initiatives, MSMEs can now take a more prominent role in India's export journey and contribute to the nation's economic growth.