Policy Update
R Sonali Devi
“Trade without borders is a vision of progress; trade with efficiency is the reality of opportunity.”
– Anonymous
I. Introduction
For several decades, traders delivering products across borders have been constrained by regulatory obstacles and “paperwork.” The simplifying, modernisation, and harmonisation of export and import procedures known as Trade Facilitation has consequently evolved into a crucial concern for the International trading system. In response, the landmark Trade Facilitation Agreement (TFA) came into effect after WTO members concluded negotiations at the 2013 Bali Ministerial Conference. Where two-thirds of the 166 WTO members ratified the TFA, which came into effect on February 22, 2017. In an effort to address trade facilitation and customs compliance challenges, this agreement aims to foster collaboration between customs and other authorities while streamlining the movement, release, and clearance of goods, especially those in transit. It also includes provisions to capacity building and technical assistance, especially for developing and least-developed countries. India accomplished a significant milestone on April 22, 2016, when it officially submitted its Instrument of Acceptance to the WTO Director-General, approving the TFA and became the 76th nation out of 164 WTO members to sign and ratify the agreement. This commitment reflects India’s efforts to integrate into the global economy and experience the advantages of the trade-facilitating reforms.
II. Implementation of TFA
Developed nations agreed to bring the Trade Facilitation Agreement’s (TFA) key elements into effect as quickly as possible. Least Developed Countries(LDCs) and developing nations, in contrast, will only comply with the provisions which they have control over immediately. For this process, an additional year has been allocated to LDCs. Least Developed Countries and developing nations declare which provisions, in line with their abilities and the financial assistance available to them, they intend to implement in each category.
There are three categories for the TFA provisions:
- Category A includes provisions that nations will implement as soon as possible upon the TFA’s entry into force.
- Category B refers to provisions that will be implemented after a significant transitional period.
- Category C refers to provisions that need additional capacity-building support before they can be implemented by the countries .
Fig.1.Number of Category B measures due to be implemented yearly
Figure 1 indicates that Category B initiatives will be enacted, with the majority occurring between the years 2019 and 2025. After achieving a peak at 191 measures due for implementation in 2020, there is a gradual decline, achieving just 65 measures due in 2025 followed by fewer than 30 measures due following in the year 2026. Implementation significantly slows down after the year 2030, with only some measures remaining until 2038. This pattern refers to an organized strategy in which the vast majority of reforms were put into effect in the early 2020s to guarantee substantial progress before declining. The prolonged tail of little progress beyond the year 2030 suggests that commitments continued but drastically dropped over the decades that followed.
Source: TFA Database
Fig.2. Top five Category C measures due for implementation in 2025-26
Figure 2 demonstrates the number of members implementing key provisions of the Trade Facilitation Agreement (TFA) during the year 2025-2026.The provisions are divided according to their components, and the numbers corresponding to the articles in the TFA that the provisions belong to.
By enabling traders to submit required paperwork through a single entry point, the “Single Window” system ,which has the highest number of members—26—in enabling seamless trading.
Other often used measures include “Risk Management”, “Border Agency Cooperation” , and “Test Procedures”, all of which have been implemented by approximately 15–16 countries. About 14 members have also put into practice the provision which deals with making trade-related “Information Available Through the Internet”. By simplifying trade processes and encouraging transparency, these policies are especially beneficial to developing and least-developed nations.
Source: TFA Database
III. Committee on Trade Facilitation
In order to supervise the implementation of the Trade Facilitation Agreement (TFA), the World Trade Organisation (WTO) established a permanent Committee on Trade Facilitation (CTF) in 2014. Its principal responsibilities include providing technical support and capacity-building assistance, reviewing the status of TFA implementation among WTO members, and resolving any disputes or concerns regarding the agreement’s execution. The CTF is composed of up of all 164 WTO members, ensuring worldwide participation and cooperation towards its objectives.
The committee is chaired by a representative from a developing nation and has vice-chairs from two developed nations to ensure equitable representation of both developing and developed nations. Through this structure, the CTF may successfully advance trade facilitation policies while emphasising the diverse objectives of its member countries.
IV. Significance of TFA
The Trade Facilitation Agreement (TFA) helped reduce trade costs and boosted customs efficiency by simplifying documentation and procedures among member nations. It has decreased backlog through enhanced predictability, accountability, and the pace at which goods have been processed. Through simplified processes and cost reduction, the TFA has improved the volume of trade, expanded market access, and especially benefited small and medium-sized businesses (SMEs). It has additionally promoted paperless trade, facilitated customs administrations’ collaboration and information exchange, and helped developing countries join the global economy. All things taken into account, the TFA has streamlined International trade, which has led to more equitable and sustainable economic growth.
V. India’s stance on the Trade Facilitation Agreement (TFA)
Initially, India was hesitant to ratify the Trade Facilitation Agreement (TFA) owing to the Ministerial Decision on Public Stockholding for Food Security Purposes. However on April 22, 2016, India accepted the TFA after crucial agricultural decisions had been approved at the 2015 WTO Ministerial Conference in Nairobi, with Ambassador Anjali Prasad delivering the acceptance document.
India established the National Committee on Trade Facilitation (NCTF) on August 11, 2016, under the direction of the Cabinet Secretary, in acknowledgement of the vital role that trade facilitation serves. The NCTF operates as the supreme authority for organising and carrying out TFA provisions across various ministries. Implementing a National Trade Facilitation Action Plan and enhancing stakeholder awareness of trade facilitation initiatives constitute its primary objectives.
India has taken numerous steps towards enhancing trade efficiency and accelerating customs operations under the NCTF’s direction. The National Trade Facilitation Action Plan (NTFAP) for 2017-2020, featuring concrete actions to enhance trade processes, launched in July 2017. In July 2019, 15 major ports, airports, and land customs stations participated in the inaugural National Time Release Study (TRS), which provided useful information for recognising and solving cargo clearance delays. These initiatives, intended to reduce trade costs, promote customs efficiency, and foster equitable economic growth, reflect India’s dedication to honouring its TFA commitments.
VI. India’a Trade Facilitation Agreement 2.0
India developed the National Trade Facilitation Action Plan (NTFAP) for 2017–2020 after committing to the WTO Trade Facilitation Agreement (TFA). Through the establishment of effective, transparent, and technologically advanced processes reinforced by cutting-edge infrastructure at seaports, airports, and land borders, this initiative aimed to completely transform cross-border clearance. Beyond simply guaranteeing TFA compliance, the NTFAP also aimed to make conducting business simpler.
The Single Window Interface for Facilitating Trade (SWIFT), the National Committee on Trade Facilitation (NCTF), and a reduction in the paperwork required to conduct imports and exports were all part of the 2017 revisions to India’s foreign trade policy.
In an effort to support importers, exporters, and logistics operators, India integrated the Accredited Client Program and Authorised Economic Operator (AEO) scheme into a three-tier AEO program in 2016. By 2018, the Customs department had streamlined the AEO accreditation procedure to adhere to international best practices, adding benefits such as self-certification and trade facilitation. AEO designation has since been granted to more than 5,000 organisations, indicating their dependability in trade. India’s 2020–2023 National Trade Facilitation Roadmap, particularly emphasizes digitalisation, improves on earlier initiatives. It places a strong emphasis on non-contact, anonymous, and paperless processes with the goals of expedited clearance, anonymous assessments, and harmonised customs procedures.
There are 66 trade facilitation initiatives in the roadmap, which have been organised according to short-, medium-, and long-term timescales. These initiatives have tremendously reduced the time and expense of trade, as highlighted in the 2023 National Time Release Study (NTRS), which indicates the success of India’s TFA and “TFP Plus” measures.
VII. Barriers to Effective TFA Adoption
The primary obstacle is the existence of dysfunctional or inactive National Trade Facilitation Committees (NTFCs). In several countries, these committees lack the political backing or participation of stakeholders that is required for coordinating trade facilitation measures and guarantee their implementation. In addition, the implementation process may be complicated by unclear directives or frequent modifications to Customs protocols and the responsibilities of other government agencies (OGAs).
Another major challenge is the lack of engagement, collaboration, and communication between various stakeholders. When customs officials, organisations, and other stakeholders are not adequately informed about or involved in the reform process, adoption of trade facilitation measures can be substantially delayed. Ultimately, this leads to low awareness and insufficient buy-in. Additionally, many nations still use outdated, paper-based procedures rather than utilising automation and digital technologies. The TFA’s objectives are undermined by the delays and errors caused by this reliance on manual processes.
An additional issue with change management is that it proves difficult to implement reforms effectively due to the broad spectrum of capacities among frontier agencies. The gap in agency capabilities might hinder the overall success of the TFA implementation.
VIII. The way forward
The global economy is constrained by high trade costs, especially for developing economies. However, the Trade Facilitation Agreement (TFA) might cut the associated expenses by an average of 14.3%, with lower-income African countries likely to gain the most. Minimizing trade costs is crucial for influencing the course of global trade and promoting expansion in the future. The TFA could contribute over 2.7% annually to global export growth while contributing more than 0.5% yearly to global GDP growth between 2015 and 2030, as estimated by Computable general equilibrium (CGE) simulations, indicating annual export gains of between $750 billion to more than $1 trillion. According to the gravity model, which defines bilateral trade as a function of two country’s aggregate economic size (estimated by their GDPs) and geographic distance (a substitute for transportation costs), the benefits of trade from the TFA could prove significant. Based on estimates, depending on the level of implementation, global exports could increase between $1.1 trillion and $3.6 trillion. Least-developed countries (LDCs) specifically remained to benefit the most through this agreement since it would promote export diversification and boost exports, GDP growth, and their participation in global value chains.
References:
- Consulate General of India, Hamburg. (2014). India’s position on the Trade Facilitation Agreement. https://cgihamburg.gov.in/pdf/press/2014%20-%2021%20-%20India’s%20Position%20on%20the%20Trade%20Facilitation%20Agreement.pdf
- Ellard, A. (2025, February 26). Trade facilitation in a changing world: Making trade work for all. World Trade Organization. https://www.wto.org/english/blogs_e/ddg_angela_ellard_e/blog_ae_26feb25_e.htm
- Gain, W. (n.d.). Trade Facilitation Agreement: Key implications for developing countries. World Trade Organization. https://www.wto.org/english/tratop_e/tradfa_e/4_william_gain.pdf
- Ministry of Commerce & Industry, Government of India. (n.d.). Trade facilitation. Department of Commerce. https://www.commerce.gov.in/international-trade/india-and-world-trade-organization-wto/trade-facilitation/
- Testbook. (n.d.). Trade Facilitation Agreement: Overview and importance for India. https://testbook.com/ias-preparation/trade-facilitation-agreement#:~:text=Initially%2C%20 India%20to%20the%20 stand,for%20development%20and%20 LDC%20 countries.
About the contributor
R Sonali Devi is a research intern at IMPRI and a postgraduate student in International Relations at Loyola College, with a strong interest in policy research.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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