Delays in customs clearance crippling India's import-export industry

3:57am 22nd October 2020

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Customs clearance delays continue to cripple the Indian industry as they have extended from the earlier 15-20 days to 25-30 days, and in some cases clearance is being given after over a month, sources told CNBC-TV18. The industry and custom brokers are citing the poor rollout of faceless assessment for the delays.

The sectors that are being impacted by the delay has expanded. Earlier, delays were faced primarily by automobiles, auto ancillary, electrical machinery, metals, chemicals and medical equipment. However, now labour intensive sectors and domestic manufacturing are also getting impacted, due to the delay in release of goods.

According to export agencies, the delay is worsening the situation as the current period is peak business time ahead of the Christmas break. Export agencies have claimed that there are no containers available and freight rates have shot up substantially. They believe that there is an urgent need for regulatory body to regulate the operations.

Moreover, exporters have said that the farmer protest in Punjab has held up 5,000 containers, which is creating a lot of issues for the sectors involved.

Sharad Kumar Saraf, President of the Federation of Indian Export Organisations (FIEO) told CNBC-TV18 that the situation at Indian ports has worsened.

"There has been no change in the customs clearance situation. Rather, delays have now increased to over a month. Faceless assessments is a welcome step, but authorities are taking more time to address on-ground issues. Authorities are not taking any concrete action to address the backlog. Today even containers are not available and freights rates have shot up substantially. There is an urgent need for a regulatory agency to regulate the operations of shipping lines.

"There is an added stress due to Punjab farmers' protest and about 5,000 containers have been held up in Punjab itself. Overall, the situation is grim and is hurting India's reputation as a stable supplier. India is unable to meet global contracts, due to the delays. Operations have been hurt as this is the peak business season ahead of the Christmas break. Orders need to be shipped at the earliest. Not just import- export, the domestic manufacturing is also being severely impacted," Saraf said.

Expressing similar sentiments, Trade Promotion Council of India, Chairman Mohit Singla told CNBC-TV18, "The customs clearance delays and unavailability of containers at the port are impacting the export sector negatively. The food and beverage industry is getting huge orders from across globe despite the reeling teething time, but the unavailability of containers at ports is leading to delays beyond the tolerance threshold of F&B, food processing industry, clothing, leather, pharma, medical equipment and chemicals, etc.

"Adding to the woes, is the new system of faceless assessment which is further delaying as staff at customs are still not fully trained to handle clearances. There has to be a separate regulatory authority functioning independently, which should ensure single window clearance and managing demand and supply of containers. India should have its own shipping line to avoid unnecessary delays."

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