India’s export industry is growing, owing to free trade agreements and policy-driven initiatives such as Foreign Direct Investment (FDI), Production Linked Incentive (PLI) schemes, and National Logistics Policy. The rise in India’s overall exports, valued at USD 69.72 billion in January 2024 – a visible 9.28% surge from 2023, stands as testimony. At this pace, we are looking at a soon-to-be trillion-dollar industry.

The headlines tell a success story, yet exporters continue to wrestle with slow-moving processes, particularly in the eBRC (Electronic Bank Realization Certificate) issuance and Duty Drawback (DBK) release against the export.

The eBRC was introduced by the Directorate General of Foreign Trade (DGFT) so that exporters can access the benefits offered by the Indian government under its Foreign Trade Policy (FTP), such as low-cost loans, duty exemptions, subsidies, etc. However, significant technological transformation is needed to match the pace of the nation’s ambitious export targets.

Addressing delays in export incentives

Traditionally, banks would issue eBRCs as proof of receipt of the export proceeds, and then the DGFT verified it. This meant heavy reliance on manual workflows and multiple system integrations between banks, exporters, and regulatory authorities. As a result, there was often a delay in processing eBRC, subsequently holding up the final release of export incentives and DBKs.

However, the government has introduced several initiatives to ensure time-bound incentive release and certificate realizations. For instance, one of the efforts toward speeding the process up is the directive instructing all field formations to credit at least 90% of DBK within three days and complete deposits in the exporters’ account within T+2 days.

While this has led to improvements, technology support like automation can have an even greater impact on creating a seamless export process.

DGFT’s revamped process

In November 2023, the DGFT launched an online platform allowing banks to automatically transmit Inward Remittance Messages (IRMs) for trade account transactions directly to the eBRC system. This would mean that exporters can access the DGFT website, review these IRMs, and self-certify their eBRCs by matching them with the invoice or shipping bill details.

Recognizing the need for further efficiency, the DGFT announced enhancements to the eBRC system in August 2024. The following updates highlight a move towards automation in export operations:

• The bulk upload functionality allows large-scale exporters to generate multiple eBRCs simultaneously by uploading a spreadsheet with all the necessary IRM mappings.
• API integration enables exporters to directly link their enterprise resource planning (ERP), accounting, or other software systems with the DGFT eBRC system.

Streamlining and automating the eBRC process further

Evidently, with this new process focusing on transparency and accountability, exporters can now track inward and outward remittances reported by banks to DGFT in real time. It can promote the ease of doing business and alleviate the burden on bankers by simplifying the reconciliation of IRMs with shipping bills, SOFTEX, invoices, etc.

However, from the exporters’ perspective, there is a critical demand for an advanced integration platform to enhance the export process workflow further. At HTC, we help exporters integrate the entire dataset, ensuring visibility across the bank and DGFT systems. Our platform helps them track and review outstanding export bills and inward remittances across multiple banks, creating a single source of truth. This near real-time interface enables the retrieval of IRM data, facilitating the request and verification of eBRCs within exporters’ existing business systems. This ensures a faster and more secure certification process.

Here’s a breakdown of the middleware functioning:

1. Exporters can seamlessly submit the details of the export goods or SOFTEX to the relevant export agencies for approval.

2. Once the applicable authorities approve, the export bills are automatically forwarded to the RBI.

3. The export agencies then relay these approved export bills to the bank, ensuring that the financial institution is aware of the pending export proceeds.

4. This dataset from banks on export bills will be integrated into the proposed platform for exporters to review, submit, and regularize.

5. The overseas buyer remits the payment corresponding to the export bill, which the exporter’s bank receives.

6. The bank sends IRMs to DGFT.

7. The proposed platform integrates the IRMs available at DGFT into the exporter system, creating a link between the payment and the export activity.

8. The exporter can then map the export bill with the inward remittance and request for eBRC issuance from DGFT’s end through the new platform, which is a critical step for claiming export incentives.

9. The mapping details are sent back to the bank to ensure the export bill is regularized in its system, confirming that all export payments have been matched and processed correctly.

10. Once the export bill is regularized, the bank informs the RBI, ensuring that regulatory compliance is maintained throughout the process.

11. Finally, the RBI shares the bill realization information with the export agencies, helping them process and release DBKs to the exporter.

To summarize, the entire process is visible to the exporters, and bottlenecks are waded through seamlessly. As a result, the release of incentives and DBKs gets significantly faster.

Key benefits: Efficiency, automation, and cost savings

Looking at the eBRC process through a macro lens, the advantages are multifold– for exporters, banks, and financial institutions. These include:

• Centralized trade transaction management: The export process can now be streamlined completely with managed trade transactions from a single system across multiple banks.
• Automated processes: Automating DGFT eBRC and bank regularization processes also opens up doors to larger and hassle-free exports.
• Cost and time reduction: With automation providing a unified view of the entire process, transaction time and administrative costs can decrease drastically. For instance, earlier, the transaction duration for eBRC issuance was between 1 week to 1 month. In contrast, today, around 2000-3000 eBRCs are issued daily by individual banks.
• Simplified reconciliation process: This solution enables easy review of bank statements and balance sheets with automated data import and transaction.
• Establishing a sustainable system: The natural progression of automation results in the complete elimination of paperwork, thus leading to a paperless and cost-free digital system.
• eBRC self-certification: Additionally, exporters can now self-certify their eBRCs based on the IRMs received, thus reducing middleware bottlenecks.
• Real-time data for policy making: The proposed solution system supports better policy decisions through real-time export data.

Looking ahead for exporters and banks

As India aims to clock $2 trillion in goods and services exports by 2030, digital integration is necessary. The revamped eBRC process marks a significant shift toward more streamlined export operations and tax benefit realizations. On top of this, our proposed middleware platform further transforms the system with seamless integration, a real-time interface, and a simplified reconciliation process for banks and DGFT. It is more than just an upgrade—it represents a fundamental change in how exporters interact with regulatory bodies and banks, and in turn, businesses become better equipped to navigate the complexities of international trade, ensuring compliance, transparency, and efficiency at every step of the process.