Citing severe congestion at Delhi airport because of which airlines have started charging three times the normal tariff, Indian garment exporters have asked the central government to stop allowing transshipment of Bangladeshi goods to third countries via Delhi.
The congestion at the Delhi airport is due to the Red Sea crisis, which has forced companies to use air routes for export of goods.
While New Delhi and Dhaka have, over the past two years, taken collaborative steps in terms of transit and transshipment of goods, India has also been pushing its domestic textile sector to achieve a $100 billion export target by 2030 and compete with other garment giants in Asia, such as Bangladesh, Vietnam and China.
Meanwhile, Bangladesh has grown into a garment powerhouse, manufacturing for major clothing brands like H&M, Zara, Tommy Hilfiger, Gap, Calvin Klein and Hugo Boss — giving stiff competition to their counterparts in India.
Apparel Export Promotion Council (AEPC), India’s official body of apparel exporters, Thursday requested the Central Board Of Indirect Taxes and Customs (CBIC) to roll back its circular dated 7 February that allowed transshipment of Bangladesh export cargo to third countries through Delhi Air Cargo complex. Previously, these goods were allowed only through Kolkata airport.
“The continuing Red Sea crisis has already increased logistical costs for the exporters and it has also led to shift of export shipments from sea to air mode. At this crucial time, allowing Bangladeshi export cargo from Delhi Air Cargo Terminal will further increase the logistical challenges and increase the transportation cost for apparel exporters,” said Sudhir Sekhri, AEPC chairman, in a statement Thursday.
Due to carrying capacity overload at the Delhi airport, airlines have allegedly begun charging three times the normal tariff to exporters over the past two months.
According to industry estimates, air freight rates for US-bound goods, which were previously at Rs 150-160/kg, are now Rs 450/kg, while rates for Europe-bound goods have increased to Rs 300/kg from Rs 80-100/kg.
Unlike exporters from India, those from Bangladesh can afford higher rates as they enjoy benefits from the Generalized System of Preferences (GSP) in Europe and Western markets, AEPC spokesperson Sameer Pushp told.
GSP schemes remove import duties from products coming from developing countries.
ThePrint reached the Indian commerce ministry through email, messages and calls on whether it would meet the demands of domestic exporters. This report will be updated if and when a response is received.
