Exporters raising concern over consignment hold-up by Hong Kong, Chinese customs: FIEO

Some exporters have raised concerns over consignments being held back by Hong Kong and Chinese customs in response to a similar action being taken by Indian authorities at Chennai port, FIEO said on Thursday.

The matter assumes significance in the wake of border tensions between India and China at Galwan Valley in eastern Ladakh.

“We have been given to understand that customs is physically examining all imports from China which is delaying clearance, adding to the cost of imports,” Federation of Indian Export Organisations (FIEO) President S K Saraf said in a letter to Commerce Secretary Anup Wadhawan.

He said that some exporters have informed that, in response to such action, Hong Kong and Chinese customs are also holding back export consignments from India.

Saraf urged the Commerce Ministry to take up the matter with Central Board of Indirect Taxes and Customs (CBIC) to see whether any official communication has been sent to Indian customs regarding scrutiny of Chinese consignments here.

“Kindly take it up with CBIC and, if no such instructions have been given, a denial may be issued by CBIC so that the matter may be communicated to our importers in China and Hong Kong to suitably take up with their customs explaining our stand,” he added.

Later, briefing reporters on the issue, Saraf said: “We have found that at Chennai and Mumbai ports, Indian customs are opening and checking all containers of China, although there is no written instruction or circular from CBIC regarding that”.

He added as the federation has taken up the matter with government, expects that the issue will be resolved soon.

Saraf also said that FIEO is against putting a blanket ban on imports of Chinese goods as it would have implications on domestic industry and consumers both.

“We have suggested taking a calibrated and calculated approach towards China. We should look at calibrating exports of raw materials to China. We could consider imposing cess on raw material exports to China,” he told reporters.

Saraf said that India can look at manufacturing goods imported from China.

“We need to study how much and which raw materials India is exporting to China. Goods like cotton, spices, plastics, and basic chemicals are going. About 50-60 per cent of our exports to China are raw materials. It is a challenge for India and such goods need to be looked upon,” he added.

To cut import dependence on China, India needs to build an ecosystem to promote domestic manufacturing like it has done for mobiles.

He added there is a possibility that if India puts restrictions, China will retaliate.

China accounts for about 14 per cent of India”s imports and is a major supplier for sectors like mobiles, telecom, power, plastic toys and critical pharma ingredients.

During April 2019-February 2020, India imported goods worth USD 62.4 billion, while exports to the neighbouring country stood at USD 15.5 billion in the same period.

India has time and again raised concerns over widening trade deficit with China which stood at about USD 47 billion during April-February 2019-20.