Industry writes to Govt as Chinese imports pile up, says supply chain severely disrupted

Sample this, Delhi Air Cargo saw a decline in the number of gate-passes issued and total weight of import cargo released in the last few days. According to the data, accessed by CNBC-TV18 on June 22, Delhi air cargo cleared 670 tons of shipments, which reduced to 184 tons on June 23, 274 tons on June 24 and to just 214 tons on June 25.

It's noteworthy that Delhi Air Cargo is the largest airport that receives maximum imports across India via air and 70 percent of this volume comes from China.

However, post various news reports on pending clearances, on June 25, few consignments of Apple, Dell, HP, and Cisco were cleared at Delhi Air Cargo and some consignments of Apple shipment were also cleared at Bangalore and Chennai air cargo on June 25.

Dilip Chenoy, Secretary-General, FICCI, who wrote to Revenue Secretary Ajay Bhushan Pandey on June 24 regarding the issue said, “the move has left companies in utter ambiguity and paralyzed their business continuity.”

“Imported shipments have been halted at all ports in India since June 22, in the absence of any prior notice or information. No formal orders had been issued by the Government in this regard. Moreover, no reasoning has been provided as to why these consignments are not being cleared. This lack of information and details about which consignments may be held at ports has left companies in utter ambiguity and paralysed their business continuity,” Chenoy wrote in the letter.

FICCI, like others, has sought urgent intervention from the government with a practical solution for the industry. The industry body has also requested that “companies engaged in manufacturing and exports from India as well as AEO-status companies should be exempted from 100 percent inspection. Moreover, there must be an exemption from 100 percent inspection for high-end products in order to prevent losses to companies and the National Exchequer on account of pilferage, soiling, and other delays. The use of X-ray machines at major ports or dog squads (for narcotics/other security threats) may be considered as a suitable alternative. These measures will help restore the speed of clearance, protect the quality of imports, and restore business confidence for companies while avoiding economic losses.”

Similarly, the US-India Strategic Partnership Forum wrote to DPIIT, on June 25, calling sharing that their member companies, in the last 48 hours informed of some very disturbing activities that started on Monday evening at Chennai Port and over the course of last 48 hours extended to other ports in Mumbai & Delhi, including the Airports around the country.

They also shared that all goods (be it high end, finished or any other kind of products) being imported from China (electronics or pharmaceuticals) have been abruptly seized and stalled by Customs.

“100 percent of goods are being opened and dismantled.  This is being done on verbal instructions at the ports without any prior intimation warning or communication from the Customs. The impact being that the situation is creating uncertainty and disruption of business for multiple companies whose goods are being wrecked, said US-India Strategic Partnership Forum.

“Disruption is leading to delay in supplying of goods in the extended Supply chain, increasing chances of theft & pilferage, re-importing of products back to factories for re-packaging to be then re-imported back to India since products will become unsellable, delay in manufacturing and a lot more,” said a senior member of cargo handling agents association in Delhi, who did not wish to be named.

Industry chambers have called for an exception for companies that enjoy the Authorised Economic Operator (AEO) status of trusted traders over years of dealing with and meeting stringent import and business requirements and an urgent review of the government orders to restore normal port operations so that there is no further adverse impact to the industry.

Nisha Biswal, President of U.S.-India Business Council (USIBC) has also written to DPIIT seeking “a closed-door conversation with impacted companies to understand the GoI’s position and timeline to resume critical manufacturing inputs. Further, to promote manufacturing and ensure seamless recovery of business operations, I urge you to provide official public guidance for the business community on any changes in the port operations. I also request your help with the resumption of any port services which have been temporarily halted."

Biswal too warned the government of the fact that the “unannounced holds seriously and materially disrupt manufacturing operations in many sectors including life sciences, and electronics manufacturing. These detained components and inputs are required to continue manufacturing in the country, as well as impact Indian exports into global supply chains, particularly to other Asian and Middle Eastern countries. This action undermines efforts around Make-in-India and GoI efforts to attract additional global supply chain investment.”

Another representation sent by George Paul, Chief Executive Officer of Manufacturers Association for Information Technology (MAIT) too highlighted in the representation to the government that the industry is totally mindful of India’s Atmanirbhar Bharat Abhiyan, but imposing 100 percent inspection of imports is hurting the industry.

“In an AEO regime, any such step will result in delays in clearance at the ports and in turn further be a setback for the Electronics Manufacturing Industry and the country. India as the fifth largest economy of the world should drive this critical transition of reducing dependency on China on our terms, under a well thought out and executed strategy. We should not take reactive steps, and that is key to retaining the confidence of existing investments in manufacturing and attracting additional investments. We, therefore, urge you to take measures for continued smoothness of Indian manufacturing business operations and supply chain that support it,” George Paul’s letter, reviewed by CNBC-TV18, said.