Why Faceless Customs Is Failing India’s Trade System

The Wintrack incident, which began with a social media post by the company announcing the closure of its operations, citing harassment by Customs officials, quickly snowballed into a public controversy, featuring in primetime television debates, on YouTube, and editorials. 

The Finance Ministry responded with an independent fact-finding mission by deputing a Joint Secretary to interview the chief executive officer of Wintrack, after which the Central Board of Indirect Taxes and Customs responded on 11 October 2025 with a press release and a post on X alluding to the possibility of cheating and private fraud by the importer’s own agents and intermediaries. At the same time, CBIC acknowledged that the episode had revealed deeper systemic issues that warranted examination and announced the constitution of a task force under Member-Customs to take further corrective operational measures.

The action plan includes a comprehensive review of pending cases to ensure consistent, transparent and legally-correct application of regulations, with particular attention to MSMEs and small-scale importers; further steps toward complete anonymity in faceless assessment through masking of additional details and appropriate instructions to officers; and stricter enforcement of access control to customs locations, restricting entry to authorised Customs Brokers and their personnel.

Worldwide, cargo clearance systems are intermediary-heavy. Goods arrive by sea, air, rail or road into a customs perimeter and are released only after a declaration is filed. It involves carriers, freight forwarders, port authorities, their crews, customs brokers, transporters, customs and other regulators. While all modern administrations have heavily digitised no one has ever managed to disintermediate the process. Amongst these intermediaries, Customs brokers play a key role for traders and are like a concierge for international traders.

 The Indian Customs system is no different. It has gone through a process of comprehensive digitalisation. All customs declarations filed by importers are algorithmically processed, and in numbers, north of 5 million per year. Based on principles of risk management system, a sizeable proportion of around 1.5 million declarations are selected for scrutiny by officers. These declarations are examined by an officer at a remotely located customs office through faceless assessment. The importer or customs broker cannot identify the officer assessing the declaration. However, the officer can view documents accompanying the declaration and all personally identifying information is available to him. Hence, facelessness operates only one-way and is therefore inherently flawed. The concept is attractive in theory, particularly in an environment that seeks transparency and reduced discretion. However, in a deeply physical and multi-actor logistics ecosystem, its practical fit is limited. Persisting with an idea primarily because it looks appealing on paper, even when it does not align with ground realities, risks mis-prescribing cures for the malaise.

In this context, the role of Customs Brokers is particularly significant. For both new and seasoned importers and exporters, the broker is the first point of contact for advice on classification, duty rates, procedures, exemptions, quality control orders and other regulatory requirements. It is a highly specialised function that demands competence, skill and continuous learning.

India is understood to have roughly 4,000 to 5,000 licensed Customs Brokers. Of these, only 300 to 400 are estimated to be well-established players with pan-India presence and sufficient breadth of experience to handle complexities of cargo clearance. On paper, the broker licensing regulations prescribe a high bar for entry. Applicants are expected to hold a professional degree, such as a master’s or equivalent in accounting, finance or management, in addition are required qualifying in a departmental examination. At the same time, these benchmarks are diluted by placing Class 12 pass candidates with relevant experience on the same pedestal.

To make matters worse, no qualifications are prescribed for all other employees of the firm other than being Class 12 pass. This gives rise to important questions. How can a team with such qualifications be expected to handle the intricacies of classification, conditional exemptions, end-use linked notifications and mandatory quality control orders with consistent accuracy?

Viewed from this perspective, the Wintrack episode should ideally act as a catalyst for qualitative reform of the intermediary ecosystem, rather than only a justification for strengthening faceless workflows. A reform path focused on the quality of intermediaries could involve several elements.

First, the Customs Brokers Licensing Regulations framework itself could be revisited. A comprehensive review could be undertaken to harmonise qualifications and move towards mandatory professional certification for all employees of a Customs Broker firm. CBIC could consider mandating certification programmes designed by the National Academy of Customs, Indirect Taxes and Narcotics, implemented through public–private partnerships aimed at producing a professional cadre of customs compliance specialists who can assist business while upholding high ethical standards.

Second, CBIC could consider notifying a dedicated Directorate for Customs Brokers. Concentrating these functions with a regulator would allow for more consistent and focused oversight.

Third, the Customs Portal - ICEGATE - could be upgraded to host a centralised digital registry of all licensed broker firms and each of their employees, with verified identity, role and status to meet standards of KYC.

Reforms on these lines would not merely respond to a single incident. They would reshape the quality of intermediaries who operate at the heart of the customs ecosystem. The department owes it to the trading community to foster a network of competent and ethical Customs Broker firms, staffed by adequately trained and certified professionals capable of handling the complex compliance environment that modern trade demands.