India’s cross-border trade operations are worth hundreds of billions of dollars annually. As per official figures from the Ministry of Commerce and Industry, between April and December 2024, India’s exports were valued at $603 Billion, and imports at about $684 Billion.
To streamline and monitor the considerable flow of trade transactions, the Reserve Bank of India set up the Import Data Processing and Monitoring System (IDPMS) and Export Data Processing and Monitoring System (EDPMS) in 2014.
While this system eliminates complex paper trails, many companies struggle to leverage it, largely due to compliance issues. Today we’ll show you how to avoid the common challenges associated with EDPMS and IDPMS reconciliation so you can grow your business without the stress of non-compliance.
How EDPMS and IDPMS Work
EDPMS and IDPMS serve similar purposes for export and import operations respectively.
EDPMS tracks all export transactions and payments to ensure FEMA compliance. Similarly, IDPMS ensures that the value of imported goods matches payments made against them. The Authorized Dealer (AD) banks play a critical role in the reconciliation process.
For any Indian company engaged in cross-border trade, EDPMS and IDPMS compliances are among the most critical.
Common mistakes to avoid in EDPMS and IDPMS compliance
These are the major issues that can lead to bank scrutiny or possible ED checks:
For exports
- Delayed intimation of inward remittances
- Missing export documentation such as shipping bills
- Financial discrepancies due to incorrect forex conversions
- Inability to realize the payments within the nine months stipulated by RBI
For imports
- A mismatch between payments and invoices
- Incomplete or missing documentation
- Delayed submission of Bill of Entry (BoE)
Did You Know: Banks consider your IDPMS/EDPMS track record when assessing a credit proposal. Clean records will help you when seeking trade finance.
IDPMS and EDPMS Compliance Best Practices
Here’s how to ensure you’re on top of the essential EDPMS IDPMS compliance requirements.
1. Timely reporting
Delayed submission or reconciliation of information is one of the most common reasons for IDPMS EDPMS compliance failure. Hence, ensure that you share all the necessary documents in time.
Timely submission of BoE with accurate and complete information, including mandatory fields like AD code, invoice number, and importer category, is essential. Failure to do so can lead to a compliance alert from the bank.
Also report inward remittances in time, to avoid regulatory scrutiny.
2. Accurate documentation
Incorrect or incomplete documentation is another common reason for non-compliance.
For hassle-free reconciliation, ensure that all your Exim documentation is correct and complete as per RBI guidelines. This includes shipping bills, invoices, Bills of Entry, and Bank Realization Certificates (BRCs).
- Double-check invoices and payment details for accuracy before submission
- Verify the freight, insurance, and discount amounts along with their corresponding currencies
- Train your staff on the regulations to prevent incorrect submissions
3. Regular monitoring
Identify issues early by keeping a close track of your IDPMS/EDPMS entries.
For example, there may be unresolved open entries due to discrepancies between the declared value under customs documents and the actual payment amounts. Not fixing these in time can lead to regulatory issues.
- Keep track of all shipping bills, licenses, and payments to prevent delays
- Maintain an active line of communication with your AD bank to avoid the accumulation of outstanding transactions and open entries
- Stay updated on RBI guidelines and exceptions that can simplify compliance processes.
4. Technology and automation
Trade compliances like IDPMS and EDPMS can be complex and time-consuming, with several failure points. However, with modern technology, your organization can easily stay on top of it all.
Invest in a centralized Exim documentation system that stores all the necessary information and documents in one place, accessible to all stakeholders. Digital records ensure that everybody has the visibility they need, and also reduce the scope of manual error.
Automate document tracking and notifications to prevent any gaps.
Trezix Tip: A modern Exim SaaS platform like Trezix creates a central repository of all your global trade documents that updates in real time. Plus, it automatically triggers alerts for delays, missing details, discrepancies, etc., helping you stay on track.
Improve Your IDPMS EDPMS Compliance Score With Trezix
EDPMS and IDPMS have transformed how Indian companies engage in cross-border trade. However, companies also need robust systems at their end to make the most of this digitalization.
AI-enabled Exim platforms like Trezix are the solution you need to modernize your Exim operations, gain complete visibility, and stay compliant with dynamic trade regulations.
To learn more, request a demo today.
