New Delhi: All shipments coming from China are being physically checked at ports and airports following a nationwide alert regarding enhanced risk weightage ascribed to consignments from that country, said people with knowledge of the matter. Some Indian exporters said retaliatory action is being taken against shipments to Hong Kong.
The India-wide 100% physical inspection of Chinese imports, which has been leading to delays in the release of cargo, was sparked by an IT system-based alert, said the people cited above. All ports, including Nhava Sheva, Mumbai and Kolkata, as well as airports have initiated physical checks since Monday midnight, customs sources said. Chennai port was the first to start inspecting all Chinese cargo and other ports followed suit.
Exporters said their goods were now facing inspections at Hong Kong. The Federation of Indian Export Organisations has conveyed the matter to the government, an official with the key exporters body said.
Even imports from China by authorised economic operators (AEOs) will be subject to physical scrutiny.
‘Checks based on Intelligence Alerts’
AEOs are usually allowed in without any checks.
The shipment curbs follow border hostilities between the two nations and moves to reduce India’s business and trade ties with China.
Government officials had on Tuesday sought to play down the physical inspections at Chennai port, saying there was no formal instruction to verify goods.
“There is an alert in the system… enhanced risk weightage requires closer scrutiny of papers as well as goods,” said a senior government official familiar with the directive. Another customs official said the checks were based on intelligence alerts and hence consignments of AEOs from China will also undergo inspection.
“Traded goods are being examined more closely while manufacturers’ cargo is being examined on priority,” said a source, suggesting urgency to ensure local supply chains are not restricted.
Typically, risk alerts are product specific and issued for sensitive commodities. However, in this case there is no specific item mentioned, prompting customs officials to check all consignments originating from China.
Import cargo is usually cleared based on the declaration. A physical verification implies a thorough check of all the papers filed — bills of entry, invoices, valuation of the goods declared. Additional proofs such as calculation certificates will also be verified, which could delay clearance and add to costs of importers.
Given that China is India’s biggest source of imports, this could mean delays for many items including electronics, mobile phones, chemicals and project goods.
India imported goods worth $62.4 billion from China in the April-February period of FY20 compared with $70.3 billion in FY19.
“Customs clearing of Chinese imports is going on but is very slow due to limited manpower and need for physical examination of all cargo,” said the official cited above.
Goods flow at the key ports on the east coast—Chennai, Visakhapatnam and Kolkata — that receive the bulk of Chinese import cargo has been the most impacted most from the heightened scrutiny. Inspections of air cargo at key ports have also started with telecom, auto and medical devices sectors feeling the greatest effect. A large quantity of telecom components and medical devices come in via the air route.
Experts said there should be clear guidelines to prevent any disruption in the supply chain.
“It seems that instruction is to examine all shipments, irrespective of the nature of products or status of importers,” said Pratik Jain, national leader, indirect taxes, PwC.
Jain said industry expects some guidelines on the process and timelines for such inspections so that they don’t lead to supply chain disruptions.
EY partner Bipin Sapra said, “The government needs to look at the overall impact if the cost of the products being manufactured in India increases due to increase in logistics cost of imports from a particular country.”
Source: indiatimes.com