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
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’
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.
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
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
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