India halts Custom Clearances for Chinese Imports at the Chennai Port!

India halts Custom Clearances for Chinese Imports at the Chennai Port!

Halting Consignments (Chinese Imports) in the Chennai Port could delay the Process of Shipment thereby affecting the Big Industries.

The Chennai Port in India becomes the first port for halting custom clearance on Chinese goods thereby having the potential to create unrest among the big industries.

What is a custom clearance? 

The act of passing commodities with the help of customs to enter or leave the country, it is a document given by customs to a shipper to show that custom duty has been paid and the goods can be shipped. 

Why has this step been taken?

Although no official confirmation has been out yet it is speculated that it might have been held up based on Intel information and routine checks. Another theory says it is probably due to COVID 19 pandemic, that all goods must be examined and sanitized thoroughly.

What exactly happened at the Chennai Port?

The imports from China are at large affected due to the halt in clearances as 300-500 bills are cleared at Chennai customs every day. Shipments that had been stranded on the ports since Monday night, created a lot of trouble.

Goods from China would now undergo 100% checking other than the random check that was done earlier (70% of the goods would pass through the green channel with no or very low difficulty and the rest 30% were examined carefully).

This step of 100% checking would cause even more delays in the whole process. System generated checks have been started, it is still a huge and time taking process.

Why is this issue so fragile?

The major part of the shipment from China is telecom and halting could result in jamming of the industry. Companies like Lava, Oppo, Vivo, Flextronics, and Apple are also a part of the telecommunication industry, components of which are imported from China. Some components need to be packaged under certain temperatures and delay of even a day can cause a lot of disruption in the industry.

According to a report by The Indian Express, China accounts for more than 14% of India’s total imports.

What could be the impact?

These consignments have been divided into two sections: Essential and Non-Essential. This has further led to the encouragement of local goods and that to depend less on Chinese goods, the chief being non-essentials. It has been unconfirmed but known that some goods will have to be unpacked in front of the assigned person(s) for the proper examination which might further delay the process.

Pankaj Mohindroo, chairman of India Cellular & Electronics Association (ICEA) stated that manual checking is “spooking the industry as it will soil, damage the imports which are critical not just for domestic production but also for exports out of India”. 

Chennai Port is an important gateway for telecom and auto components, impact on the two industries is very likely to be seen on a negative side.

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