India's decision to hold back export items from China at ports and airports has not gone down well with the neighbouring nation. Indian exporters have said China and Hong Kong customs are holding back export consignments from India. Fearing a major tit-for-tat measure from China, the Federation of Indian Export Organisation (FIEO) has said that chances of retaliation are high and the absence of official word on the matter has made the matter worse.
The exporter associations have also written to top commerce ministry officials about the issues they are facing due to the withholding of consignments from India. They also highlighted the delay in receiving imports as Indian customs officials are physically examining items from China, which is likely to add to their costs. Sharad Kumar Saraf, President, Federation of Indian Export Organisations (FIEO) said the association has requested Commerce Ministry to come out with an official clarification to make it clear that India has not resorted to any such blanket move to targets goods from China.
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Exporters rue that there hadn't been any official communication on a delay of clearance and now the sudden physical examination of every container is leading to piling of imports. Notably, various containers from China are stuck at ports of Mumbai and Chennai. These containers have been parked at isolated docks for physical examination by customs officials, leading to a huge delay in delivery.
Meanwhile, officials from the finance ministry told India Today that some containers might be held up on the basis of intelligence input and risk assessment, which is a routine and on-going exercise. They believe it has nothing to do with development at the border. The development comes hot on the heels of major tension between India and China due to clashes in Galwan Valley of Ladakh.
The customs brokers association of Chennai port issued an advisory on June 22 to its members over the delay that is happening due to 100 per cent inspection of consignments originating from China. India had imported $70 billion worth of goods from China in 2018-19, almost 14 per cent of its overall goods imports worth $514 billion that year. The country is dependent on China for electronic and electrical machinery and equipment, nuclear reactors, boilers, machinery and mechanical appliances, etc. As part of its attempt to be self-reliant, the government has been encouraging local production in some areas like electronic goods and pharmaceutical raw materials also.
Notably, though China's exports to India stand at 2.8 per cent of its total exports, India's exports to China are around 5.4 per cent of the total exports.