Harmonized System (HS) Code

• The Ministry of Commerce and Industry allocated a separate Harmonised System (HS) code for Khadi.

HS code

• The Harmonized System, or simply ‘HS’, is a six-digit identification code developed by the World Customs Organization (WCO).
• Called the “universal economic language” for goods, it is a multipurpose international product nomenclature.
• Over 200 countries use the system as a basis for their customs tariffs, gathering international trade statistics, making trade policies, and for monitoring goods.
• The system helps in harmonizing of customs and trade procedures, thus reducing costs in international trade.

What makes the 6 digit code?

• A unique six-digit code has numbers arranged in a legal and logical structure, with well-defined rules to achieve uniform classification.
• Of the six digits, the first two denote the HS Chapter, the next two give the HS heading, and the last two give the HS subheading.
• The HS code for pineapple, for example, is 0804.30, which means it belongs to Chapter 08 (Edible fruit & nuts, peel of citrus/melons), Heading 04 (Dates, figs, pineapples, avocados, etc. fresh or dried), and Subheading 30 (Pineapples).

Significance of the move

• Khadi is India’s signature handspun and hand-woven cloth that was made iconic by Mahatma Gandhi during the freedom struggle.
• The move is expected to boost Khadi exports in the coming years.
• In 2006, the government had given the MSME-controlled Khadi and Village Industries Commission (KVIC) the Export Promotion Council Status (EPCS).
• Yet, the absence of a separate HS code hindered Khadi from achieving its full potential, as its exports were difficult to categorise and calculate. The latest move is expected to help resolve this issue.