Why in the News?

India has introduced a Harmonised System (HS) code for geographical indication (GI) recognised rice exports under an amendment to the Customs Tariff Act, 1975 announced by Finance Minister Nirmala Sitharaman in the 2025-26 Union Budget on February 1, 2025.

About Harmonised System (HS) Code

• HS Code is an internationally recognized classification system for traded goods, developed by the World Customs Organization (WCO).
• It is used to standardize the identification of products in global trade, ensuring uniformity in customs procedures, tariffs, and trade policies.
• The HS Code is a six-digit numerical code, categorized as follows:
  • First two digits: Represent the chapter of goods (e.g., “10” for cereals).
  • Next two digits: Indicate the heading (e.g., “06” for rice).
  • Last two digits: Define the subheading (e.g., “30” for semi-milled or wholly milled rice).
• Countries can extend the HS Code beyond six digits to accommodate specific national requirements (e.g., India uses an 8-digit system).

About the World Customs Organization (WCO):

• The WCO is an intergovernmental organization responsible for overseeing and standardizing global customs regulations.
• It was established in 1952 as the Customs Co-operation Council (CCC) and later renamed the WCO in 1994.

• Key Functions of the WCO:

• • Develops and maintains the HS Code, used by over 200 countries and territories.
  • Regulates customs procedures, trade facilitation, and enforcement of trade laws.
  • Supports the fight against illegal trade, smuggling, and counterfeit goods.
• The organization works closely with the World Trade Organization (WTO) and United Nations (UN) to promote global trade efficiency.
• India is a member of the WCO and follows its HS classification system for trade regulations.
• The WCO’s Revised Kyoto Convention (RKC) serves as a blueprint for India’s customs modernization efforts.

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