Customs told to clear all Chinese shipments with entry bills till June 30

In a breather of sorts for industry, customs officials have been instructed to clear all shipments from China held up at airports and seaports where bills of entry (BoE) have been filed till the midnight of June 30. However, they were told, through informal directives, to hold up consignments coming July 1 onwards for 100 per cent physical checks until further orders.

The latest diktat does not apply to import of active pharma ingredients (APIs). Even 11 top-ranked importers such as Samsung, LG, Honda and Toyota have been exempted from the 100 per cent physical inspection, in line with instructions issued earlier this week.

“The rationale for the June 30 midnight deadline is not very clear,” said a government official.

There’s been a sharp drop in consignments originating from China, according to a customs official. “Industry is evaluating the turn of events and has deferred shipments from China as there is no point keeping them held up at ports. Orders and shipments will resume once things normalise,” he pointed out.

A bill of entry is a compliance document that is filed by importers or customs clearance agents on or before the arrival of imported goods. It is submitted to the Customs department as a part of the customs clearance procedure.

Bilateral trade between China and India was worth $88 billion in FY19 with a trade deficit of $53.5 billion in China’s favour.

Industry has demanded that at least those consignments that are imported by manufacturers for inputs in final products should get clearance. “The manufacturing sector has been hit significantly because of this episode. Our request to the government is to make a special case for manufacturers,” said an industry representative.

In fact, the Indian pharma industry has been struggling in the absence of API supplies from China, prompting the government to clear those consignments. Over 60 per cent of India's API requirements come from China.

Also, the tier 3 Authorized Economic Operators (AEO) certified importers, which meet the highest level of compliance and enjoy preferential treatment, have been given the relaxation,  said a government official. These shipments got moving from Wednesday.

The AEO holders enjoy certain benefits like fast-tracking shipments, deferred payments, exemption from issuance of guarantees and preferential treatment by Customs. They are classified into three categories — T1, T2 and T3, with T3 — representing the highest level of compliance on legal, safety and security parameters. Of the over 3000 AEO holders, only 11 qualify under the T3 category.

On the other hand, Indian exports stuck at Chinese ports have also started getting cleared. “Unlike India, China did not impose 100 per cent inspection of shipments on Indian consignments. Now, we are hearing all bottlenecks have been cleared,” said Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO).

Last week, FIEO informed the government that Customs authorities in Hong Kong and Chinese ports had held back some consignments of Indian exports in a blow-for-blow measure, after ports in India took up the task of inspecting Chinese products.

Some categories of goods continue to be stuck. "Members have informed us even today that engineering goods shipments are stuck," said Engineering Export Promotion Council India chairman Ravi Sehgal. It all started around June 22, when Customs officials in Chennai and Vizag were asked to put all shipments from China on hold until further orders.