CBIC's AEO Programme Strengthens Trade Facilitation, Holds Promise For MSMEs

New Delhi, Jul 10 (KNN) India’s Authorised Economic Operator (AEO) Programme, administered by the Central Board of Indirect Taxes and Customs (CBIC), has emerged as a key trade facilitation initiative that can strengthen both the country’s export ecosystem and domestic manufacturing, particularly for Micro, Small and Medium Enterprises (MSMEs).

AEO Programme Enhances Trade Facilitation

Based on the World Customs Organization's SAFE Framework, the AEO programme recognises businesses with strong customs compliance, financial stability and secure supply chains. 

Certified entities receive benefits such as faster customs clearance, fewer inspections, simplified documentation and reciprocal trade facilitation under Mutual Recognition Arrangements (MRAs). 

India has operational AEO MRAs with eight countries, including the US, UAE, Russia and Japan, reported Economic Times.

According to the CBIC National Time Release Study 2025, AEO export consignments were cleared over nine hours faster at seaports and around two-and-a-half hours faster at air cargo complexes, while import release times also improved significantly between 2023 and 2025. 

MSMEs Stand to Gain from Faster Imports and Lower Costs

For MSMEs, which account for nearly 31 percent of GDP, 35 percent of manufacturing output and 48 percent of merchandise exports, the AEO programme improves working capital and lowers logistics costs through faster clearance, reduced inspections and duty deferment. 

The Union Budget 2026–27 further strengthened the scheme by extending duty deferment for Tier-2 and Tier-3 AEOs to 30 days, expanding benefits to eligible manufacturer-importers, and proposing preferential cargo clearance and longer validity of advance customs rulings. 

CBIC has also eased eligibility norms for MSMEs under its liberalised AEO framework introduced in 2020.

Low MSME Adoption Despite Policy Support

Despite recent reforms, MSME participation in the AEO programme remains low. Of over 1.7 crore manufacturing MSMEs registered on Udyam and more than 3 lakh exporters, only around 3,000 have AEO certification. 

Industry observers cite low awareness and resource constraints as key barriers, a trend also highlighted in a 2025 study by the World Customs Organization, World Trade Organization and International Chamber of Commerce. 

Experts Call for Greater Awareness and Integration

Experts have called for integrating AEO awareness into MSME schemes such as RAMP, ZED, LEAN Certification and cluster development programmes. 

They also recommended closer CBIC–MSME Ministry coordination through facilitation desks, multilingual guidance and cluster-based training. 

Wider AEO adoption, they said, could reduce logistics costs, strengthen supply chains and boost India's export and manufacturing competitiveness under the Viksit Bharat 2047 vision.

(KNN Bureau)