India does not welcome “Chinese goods” stranded in customs

“Chennai interrupted the customs clearance of goods from China, and the goods that had been cleared at the scene were also subject to 100% out-of-box inspection. The policy is also said to be spreading to all indian ports. “On June 23rd, the news that Chennai had interrupted the customs clearance of Chinese goods suddenly spread in the Sino-Indian trade circle. Insiders ask: Is the news true? What the hell is going on?

Peng Yu, who is engaged in cross-border logistics, has been asked by customers, and he immediately contacted the staff in Chennai, responsible for customs clearance. The other party sent him a screenshot of the correspondence document, which read: “The port of Chennai has received internal instructions to all cargo ports to take down all goods from China for inspection.” “

India’s Economic Times reported that Chennai Customs began 100% inspection of Chinese goods

In the past week, goods from China have been blocked at customs clearance at several Indian ports and airports, including several of India’s largest ports and airports, Chennai, Mumbai, Delhi and Bangalore, according to a number of sources. Among them, some logistics industry sources revealed that on June 18, a batch of goods arrived in Mumbai port, has been stranded for more than a week. Three other shipments of Chinese goods were stranded at the New Delhi airport for more than two days.

On the afternoon of June 26, The Latest News was obtained by The Sense Network, and the entry declaration of all Chinese goods from Mumbai Port was locked. This means that all goods from China cannot be cleared in the customs system.

The situation is still expanding further. A Senior Executive at a Chinese mobile phone brand told Zhixiang.com that parts from Shenzhen had been stuck at Indian customs for three days.

So far, Indian officials have been in a clear position. The customs authorities only told the importer that there would be delays in the clearance of Chinese goods, but gave no reason. The central tax authority also said it had not issued an order restricting Chinese goods.

Although there was no explanation from India, five people interviewed by The Onb.com said the Indian customs action was clear: all goods from China; After clashes between Chinese and Indian border guards on June 15, domestic resistance to China has been growing and Chinese goods have been “difficult” at customs.

U.S. companies in India, such as Apple and Cisco, have also blocked parts they import from China. Even for Indian-owned companies, customs have not let go. “Jio (owned by India’s richest man, Ambani) has the light cat of Suzhou Zhonglei’s foundry, also stuck in the port of Mumbai. A Mumbai-based communications equipment manufacturer said.

It is clear that the presence of Chinese goods at Indian ports is directly related to the situation on the China-India border. However, in the face of sudden and unknown reasons for the interruption of customs clearance, the first to feel “unable to eat”, is India’s domestic manufacturing industry.

Pankaj Mohindro, president of the Indian Mobile and Electronics Association (ICEA), wrote to Finance Minister Nirmala Sitharaman on Thursday: The mobile industry is just getting started after three months of huge losses.

“Whatever the reason, such a move would be counterproductive, especially without prior notice. Mohindroo said.

Chennai “case”

On June 23, the Chennai Customs Intermediary Association (CBBA), a private agency, issued a member’s newsletter explaining delays in customs clearance at India’s ports, cargo ports and airports. In the specific description, CBBA wrote: ‘Customs issued internal instructions that all goods from China will not be released for the time being and will need to be re-checked after customs clearance (subject to a reexam before release). This information quickly spread among the WeChat groups of Chinese business people.

Located in the southern Indian state of Tamil Nadu, Chennai is an important hub for India’s imports of telecommunications components, medical equipment and auto parts.

Communications released on June 23 by the Chennai Customs Intermediary Association (CCBA) (Source: India Logistics Link)

Immediately after 24 June, CBBA again sent out communications, all but individual goods that had been released from China, except for individual goods that were subject to intelligence verification. The circular also states that all goods arriving before 24 June have been reassigned to different customs inspection groups and that the goods will be released after the inspections specified by the system have been completed. Goods arriving after June 24 will be cleared according to the corresponding system instructions and there will be no other problems.

Communications released on June 24byst by the Chennai Customs Intermediary Association (CCBA) (Source: India Logistics Link)

The circular appears to have been clarified, but several industry insiders and Indian media reports have confirmed that a large number of Chinese goods are still stranded at the port of Chennai for inspection. Other Indian ports, such as Mumbai, Delhi and Bangalore, also have additional checks on Chinese goods.

In the face of repeated questions from customers, Peng Yu has been in contact with customs clearance staff located in Chennai Port, and feedback to customers. On June 24, Peng Yu was confirmed from the Chennai Customs Office that all Chinese goods had not been intercepted and not released, but the customs significantly increased the sampling of Chinese goods, resulting in a delay in customs clearance.

“Realistically speaking, because of the blockade of the epidemic, chennai port already has a backlog of containers, increased inspection efforts, will cause further congestion at the terminal and freight terminal, all out of the box inspection is not realistic.” He said that the “100% out-of-the-box inspection” may be the customs clearance agent to increase the sampling of exaggerated misinformation. Subsequently, Chennai’s overseas agent’s feedback confirmed his inference: “100% out of the box inspection, did not actually perform.” “

“Made in China” stranded in full India

Chennai is not a case in point. Since June 23rd, the “clearance crisis” is spreading from Chennai to all of India.

At New Delhi, Mumbai and Bangalore airports, there were also reports that Chinese goods had been intercepted and inspected several times.

A logistics industry source told Theon.com that three tickets were stuck at the New Delhi airport, which has been in place for more than two days. In the past, airport clearance took only one day.

The same is true of Luo Xiang, who trades in Bangalore. A shipment of goods arriving at Bangalore airport last week is still stuck in customs and “moving still”. According to the agent, customs clearance has been completed, but the customs still do not release.

A Mumbai-based Chinese company confirmed to Zhixiang.com that one ticket arrived at the port last Thursday (June 18) but has so far failed to clear customs.

On June 25, Peng Yu received confirmation from the Mumbai cargo port. Similar to Chennai, the port of Mumbai increased spot checks, but did not inspect 100% of the goods coming from China.

However, only one day, the situation suddenly turned down. On the afternoon of June 26, a person familiar with the matter said that all Chinese goods in the port of Mumbai were locked. From now on, all goods from China in the customs system cannot be cleared.

India’s customs have not even let go of India’s richest man. Jio, his telecommunications company, has also recently had trouble clearing customs because they import equipment from China.

Several of Jio’s containers were also seized by Mumbai customs and asked for re-inspection. The shipment is a photocat (optical network terminal) of Jio’s electronic sitcom, with a total of 4 containers. The source said.

Many foreign companies have also been affected.

Several big U.S. companies have also been affected, according to Reuters. Products such as Apple, Cisco, Dell and Ford, as well as Foxconn’s electronic components, were sourced in Chennai Harbor and could not be cleared in time. These companies rely on imports of finished goods or parts from China to serve the Indian market.

Official silence

Peng Yu told The Like son-in-law that Chinese goods were suddenly detained for inspection, and that the industry was circulating for a drug-smuggling information received by Indian customs that was smuggled in Chinese containers. Indian media business today offered a different story, saying that customs were more cautious about goods from China because of the recurrence of the virus in Beijing.

Zhixiang network learned from the Indian and Chinese enterprises, in the past few months, although India due to the outbreak of the national blockade, but customs clearance has been normal. It’s just a little slower. But after last week’s border clash between China and China, goods from China were treated differently, making it hard not to speculate on the link.

In an interview with Indian media, Indian tax officials revealed that the Central Customs Commission (CBIC) has not issued any orders to restrict Chinese containers to any port, some of which have been stopped for inspection, based on specific intelligence actions.

In response to the official response, the logistics industry analysis, the customs sudden review, may not be because of the official order, but the customs within the small groups, taking advantage of the Sino-Indian relations conflict, in the name of the review to delay customs clearance time, asking for additional costs.

Peng Yu speculated, “Most of the customs staff take advantage of this opportunity to earn some money, to CHA (customs clearance agent) to pay some money before the release … As to whether there is a politicized operation, this possibility is not ruled out, after all, the situation between China and India is now like this. “

Most of India’s electronics are imported from China through Chennai, while most of the Chinese products in Mumbai port are essential to life. Industry analysis, “compared to the necessities of life, electronic products are not so urgent, so some customs officers use their position to facilitate the Sino-Indian conflict at the threshold of Chinese goods, take advantage of profits.” “

But Mr Luo, who is based in Bangalore, feels that customs intercepts Chinese goods do not appear to be due to the need to collect money. The goods he arrived at Bangalore airport last week have not been able to remove them. “Customs has made various excuses, such as incomplete information, goods value does not match, etc. , delay time. Luo Xiang thought the purpose of delaying customs clearance was to collect money, but his feedback from the customs clearance agent was that the customs was not assured of Chinese goods, “not a matter of money”.

In the face of domestic protests following the border clashes between India and China, the government has recently released a stance of unpopularity with China. On June 23rd India’s Ministry of Commerce announced that all sellers registered with geM must mark the country’s source of the product and that the products already on display would need to be updated with origin information or they would be delisted.

The Indians panicked first.

“The third day got stuck there. Zhang Zhi, a mobile phone industry practitioner, said to Zhixiang.com

His factory is located in the Delhi satellite city of Noida, and mobile phone parts are stuck at New Delhi airport, 40 kilometres away.

Not only Chinese phones, Samsung’s factories are also located in Noida, where parts imported from China are also stuck at New Delhi airport.

India does not have a complete supply chain for the mobile phone industry, with 90 per cent of its parts imported from China.

The Federation of Indian Export Inga (FIEO), the Indian Chamber of Commerce and Industry (FICCI), MAIT, which represents IT hardware manufacturers, and ICEA, the mobile phone industry lobby, finally sat still, writing to India’s Ministry of Commerce and Finance calling for an immediate end to the 100% review of Chinese goods. They said that if the authorities continued to detain goods from China, it would block the port and lead to serious delays in delivery.

In addition, a thorough inspection of electronic products may directly cause damage to goods. The ICEA president stressed that “parts such as displays need to be packaged at certain temperatures, and special care must be taken that manual inspections will result in millions of dollars worth of losses.” “

ICEA said a delay of more than 24 hours would seriously disrupt the industry. Because the electronics manufacturing industry adopts the on-time inventory model, the original supply delay will affect the start of the plant. ICEA’s members include Lava, Foxconn, OPPO, Vivo, VTech and Apple.

Industry sources believe that the disruption of customs clearance will also have long-term implications. Because the unpredictable and opaque nature of India’s official actions will leave foreign investors “chilling” at the moment.

After all, India’s car and electronics industry has only just recovered from the epidemic, “the electronics industry is already in trouble, with production losses of more than 400 billion rupees ($5.3 billion) and now less than 40 per cent of normal levels.” Pankaj Mohindroo, president of the Indian Mobile and Electronics Association (ICEA), said.

Industry sources stress that India’s dependence on China on raw materials and finished goods is still too high to give up. Currently, about 45 per cent of India’s electronics, 90 per cent of mobile phone parts, 65 to 70 per cent of medicinal active ingredients, one-third of machinery and nearly two-fifths of organic chemicals are imported from China. From electronics, motors and automobiles to pharmaceuticals, many key areas are highly dependent on Chinese products. India’s trade deficit with China from April 2019 to February 2020 was $46.8 billion, according to the latest figures.

Although the Indian government is seeking manufacturing investment from the Us and Japan, it hopes to attract them to move their factories from China to India. But a sudden halt to imports from China at the immediate end of the outbreak blockade could throw Indian companies’ supply chains into disarray. S.K. Saraf, president of the Federation of Indian Export Inges (FIEO), said on June 25th that restricting imports of Chinese products would have no effect until India was able to produce them or find alternatives to imports from other countries.

In response to the impact on foreign companies, industry insiders told India’s Economic Times that the Ministry of Industry and Domestic Trade Promotion (DPIIT), an Indian government department, had proposed to the Ministry of Finance that it consider a new mechanism to exempt imports from non-Chinese companies such as Apple from out-of-the-box inspections. However, it was not explained whether the goods of Indian importers were also covered by the exemption.

The new mechanism for overhauling Chinese goods has also strained Indian drug makers, as 70 per cent of India’s raw materials and key ingredients for medicinal purposes are imported from China.

Indian media also said that Chinese customs began to take measures against Indian goods.

But it is handset makers who are most worried at the moment. “In the factory, it’s not okay to have one less screw, ” Zhang said. ” “

Peng Yu, Luo Xiang, Zhang Zhi, etc. are pseudonyms

Resources:

https://tech.economictimes.indiatimes.com/news/corporate/non-china-companies-like-apple-may-be-exempt-from-100-physical-check-of-imports/76636149

https://in.reuters.com/article/us-china-india-usa-companies/apple-other-us-goods-from-china-held-up-at-indian-ports-sources-idINKBN23V215

https://economictimes.indiatimes.com/news/economy/foreign-trade/beijing-seeks-clarity-on-imports-stuck-due-to-100-inspection/articleshow/76603660.cms

https://economictimes.indiatimes.com/tech/hardware/handset-makers-seek-fms-intervention-for-urgent-release-of-chinese-cargo/articleshow/76627453.cms

https://www.thehindu.com/business/Economy/ladakh-face-off-industry-flags-delay-in-china-imports/article31918011.ece