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Trade worried over Chinese consignments held up by Customs

TE Raja Simhan Chennai | Updated on June 28, 2020 Published on June 28, 2020

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The Chennai Customs department’s refusal to release consignments from China has led to a serious supply chain problem for companies heavily dependent on critical raw materials. Incidentally, nearly 30 per cent of import cargo handled in Chennai by both air and sea originates in China.

Clearance of all import consignments from China was stopped from 4 pm on Friday by the Customs department — second such stoppage within a gap of four days.

When the issue was flagged by the trade, the Customs department had replied that there are many system issues. The department is looking into it. In the first instance, it was due to ‘suspicion,’ said Custom sources without giving details.

“It is the status quo for all cargo from China since Friday evening. However, on Saturday, at air cargo, the Customs released boxes only for large electronics manufacturers such as Dell, Cisco, Samsung and HP located at Oragadam and Sriperumbudur region. No reason was assigned,” said a Customs House Agent (CHA) involved in documentation with the Customs on behalf of his clients.

Leather industry in trouble

Sanjay M Lulla, Managing Partner at SM Lulla Industries Worldwide, a Chennai-based exporter of leather garments, said that his consignment from China with zippers, lining and buttons are stuck at the port for the last few days. “They are very important as we cannot stitch the garments without these items,” he added.

June and July are critical months for the leather industry as samples for Spring collection in Europe are shipped every year.

Coming to the rescue of leather exporters, the Council for Leather Exports (CLE) has taken up the issue with the Central Board of Indirect Taxes and Customs (CBIC) for release of cargo from China.

R Selvam, Executive Director, CLE, has urged Vimal Kumar Srivastava, Joint Secretary (Customs), CBIC, to permit Customs clear import consignments of samples, inputs, components and raw materials imported from China to help exporters complete their export orders on time.

The leather industry has already suffered order losses to the tune of $1-billion due to Covid-19. As major markets of Europe and the US (to which 70 per cent of leather exports are directed), have now opened and buyers have placed orders, exporters have to ensure completion of production in time. Else, such export orders will be cancelled leading to huge losses for exporters, said Selvam.

But for some of the companies dependent on Chinese cargo, the lockdown has come as a blessing in disguise. For instance, automobile customers importing from China are not affected due to lockdown as there is no pressure, said a CHA who clears cargo for large auto majors.

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Published on June 28, 2020
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