Centre looks to widen trusted-trader programme beyond customs facilitation

NEW DELHI: India is looking to expand its trusted-trader programme beyond traditional customs facilitation as it enters the next decade of the Authorised Economic Operator (AEO) framework, with technology, MSME access and closer coordination across regulators emerging as priorities.

Central Board of Indirect Taxes and Customs (CBIC) chairman Vivek Chaturvedi on Wednesday outlined five priorities for the programme’s next phase: technology-driven facilitation, greater inclusion of MSMEs, seamless inter-agency coordination, expanded Mutual Recognition Arrangements with global partners, and greater synergy across indirect tax verticals.

The priorities were announced at an event marking 10 years of the AEO programme, which gives compliant businesses simplified customs procedures and risk-based facilitation while maintaining supply-chain security.

From certificates to outcomes

Chaturvedi said the programme has become a key pillar of India’s trade-facilitation architecture and helped transform customs administration into a modern, trusted and facilitative system aligned with the World Customs Organization’s SAFE Framework of Standards.

The programme currently covers 5,967 entities, including importers, exporters, manufacturers, customs brokers, logistics operators and warehouse operators, across T1, T2, T3 and LO categories. T1, T2 and T3 refer to three levels of certification, while AEO-LO covers eligible logistics operators.

The AEO programme is essentially a trusted-trader scheme. Businesses that meet prescribed standards for customs compliance and supply-chain security are recognised as trusted operators and receive greater facilitation in customs procedures. The objective is to allow Customs to focus resources on higher-risk transactions while giving compliant businesses faster and more predictable processing.

Its scope extends beyond importers and exporters to other participants in the international supply chain, including logistics operators, warehouses, customs brokers and manufacturers.

Experts said the next phase could broaden the programme’s role, with the larger opportunity being to move AEO beyond a Customs-facilitation scheme towards a broader framework for trusted economic operators.

“Technology and AI should enable continuous, risk-based assessment, allowing compliant businesses to face minimal intervention while directing enforcement resources towards genuine risks,” Sanjay Kumar, a retired IRS officer told Mint.

“The focus on MSMEs is equally important. However, inclusion will require proportionate compliance requirements, rather than simply lowering thresholds. Greater integration of Customs, GST and other regulatory agencies, supported by stronger international mutual recognition, could turn AEO status into a meaningful competitive advantage for Indian businesses,” he said.

“The next phase of the programme should therefore be measured not by the number of AEO certificates issued, but by measurable reductions in clearance times, transaction costs and regulatory intervention,” Kumar added.

Vinod Kumar, president, India SME Forum, also said easier access to trusted-trader benefits would be important for smaller businesses.

“The focus on MSMEs in the next phase of the AEO programme is important because smaller businesses need easier access to trusted-trader benefits. The programme should have simple and proportionate compliance requirements so that MSMEs are not discouraged by the cost and complexity of certification. Greater technology-based facilitation and faster customs clearances can help reduce transaction costs and make Indian MSMEs more competitive in global markets,” he said.

About the Author

Dhirendra Kumar is a seasoned policy reporter with about 20 years of experience in deep, on-ground reporting across key economic and governance sectors. His work spans finance, public expenditure, disinvestment, public sector enterprises, textiles, trade, consumer affairs, and agriculture, with a strong focus on uncovering structural policy shifts and their real-world impact.<br><br>Kumar has been awarded the Chaudhary Charan Singh Award for Excellence in Journalism in Agricultural Research and Development, recognising his contribution to reporting on critical issues in the farm sector. He has also been a recipient of a fellowship in international trade from the National Press Foundation, which has further strengthened his coverage of global trade dynamics and their implications for India.<br><br>Kumar is known for breaking complex policy developments into clear, accessible stories. His reporting focuses on uncovering under-reported trends, explaining policy shifts, and helping readers stay informed about developments that shape India’s economic landscape.