In the beginning of July, when FedEx and DHL stopped picking up cargo from China for India, it was not surprising. If the Corona Virus pandemic made transportation difficult, the situation with the bloody conflict in the Galwan Valley (bordering the Indian state of Ladakh and China) on June 15, 2020 that saw the deaths of 20 Indian soldiers, made India’s relations with China even worse.


Backlogs Beyond Our Control

      The announcement of the move to stop picking up cargo from China was due to “recent delays in customs clearance of shipments into India,” from mainland China, Hong Kong and Macau.
      FedEx also pointed out that it was “currently facing backlogs beyond our control, leading to congestion at our facilities.”
      While DHL and FedEx have explained the reason for the delays, there is another very important reason.

Clash With India

      The Galwan clash saw Prime Minister Narendra Modi and the government of India talking about enforcing economic measures against China.
      There have been plans to hike tariffs and increase import duty.
      Soon after Galwan, India banned 59 Chinese mobile apps.


India Boycotts China

      On the ground, the Confederation of All India Traders (CAIT), representing 70 million traders and 40,000 trade associations in the country has been spearheading a ‘Boycott China’ campaign.

Boycott Could Go Total

      A recent survey conducted by LocalCircles, a whopping 87 percent (of the more than 32,000 responses from people across 235 districts in the country) said they were willing to boycott all Chinese goods for the next one year. Among these goods are mobile phones, electronic items, raw material and spare parts.

Piles Of Cargo Building

      China is India’s biggest importer, supplying 14 percent of India’s imports and is also its largest trading partner. The boycott move has seen Chinese shipments piling up in the country. In fact, other than the non-supply of mobile phones, the situation in the pharma industry has taken a turn for the worse.

Pharma Endangered

      Sometime ago, the Pharmaceuticals Export Promotion Council (Pharmexcil) sent an urgent letter to the Department of Pharmaceuticals in the government wanting to know why raw material, intermediates and active pharmaceutical ingredients were not being cleared. The council said “the reasons were not given to the industry at all.”
      Towards the end of June, for example, more than 4,000 tons of cargo from China and Hong Kong was held up at Bangalore Airport by the Customs department for nearly a week.

Knitwear Gets Stretched

      However, garment exporters got some relief when the ‘unofficial’ ban on Chinese goods was lifted in July.
      According to the Tiruppur Exporters Association (Tiruppur exports knitwear and ready-mades worth almost USD$475 million every month) around 90 percent of accessories, including buttons, zips and chains come from China.       Production was hit severely with the ‘unofficial ban.’ According to sources in Customs, the reason for the delay in the clearance of shipments was the insistence of 100 percent inspection of shipments from China.

The Never Ending Story

      The ban has not ended yet and many freight forwarders are of the opinion that till bilateral ties are sorted out—border talks with China are still on— this off and on ban will continue.
      Many pointed out that till the leaders of the two nations talked to one another, which because of public sentiment doesn’t seem to be a possibility soon, the situation will remain the same.
Tirthankar Ghosh