Chaos, confusion over customs clearance of China consignments at Chennai, Vizag

Amidst ongoing tensions between India and China, the Indian pharma industry experienced chaos as news spread that customs clearance for China-originated consignments at different cargo including port terminals, airports have been kept on hold.

A circular by the Chennai Customs Brokers Association informed, “There is an internal instruction from customs to all custodians of cargo, including port terminal, Airport, and all Container Freight Station (CFSs) to hold all consignments which are originated from China. The consignment which is given Customs Out of Charge (OOC) also will be under hold and subject to a re-examination before release from CFSs and Port. It prevails at all the locations across India.”

Similarly, the JNPT Customs also communicated to its members (custom brokers) that all the goods imported from China are to be kept on hold for clearance and should be issued an OOC on the goods. It also instructed that cargo lying in private warehouses must be kept on hold until further instructions.

Considering the dependency on China for Active Pharmaceutical Ingredients (API) and Key Starting Materials (KSMs), these created a near-panic situation among pharma stakeholders due to concerns about its adverse impact on finished formulations (medicines).

However, it came to light that the government has not taken any decision on restricting the import of any essential items from China. The Ministry of Commerce confirmed that so far it has not received any such official communication, either from the Department of Revenue or Central Board of Indirect Taxes and Customs (CBIC).

Speaking on the incident, Dr Dinesh Dua, Chairman, Pharmexcil said, “The pharma industry was shocked and jolted when suddenly news started doing rounds that China-origin documents are not being cleared by customs at Chennai, Nhava Sheva, Air Cargo Delhi etc. There was no official order, but unofficially it all started doing the rounds today without any prior intimation to trade.”

He continued, “As of now, the news has no basis at all and I understand that CBIC spokesperson cleared the air on a channel. In order to avoid unwarranted and unfounded adverse news of this nature, all stakeholders must be transparent, communicative and forthright which will be a great trust-building initiative.”

“The pharma industry has immense faith in the government. But, in the backdrop of Sino-India deterioration on the border, these sensitive issues can create huge confusion and anxiety as the domestic pharma industry is dependent 90 per cent on Chinese APIs. The Government of India, Department of Pharmaceuticals, Ministry of Health and Family Welfare and Ministry of Commerce are committed to taking India forward to aatmanirbharta in KSMs and APIs but it’ll be a gradual process,” he added.

Reportedly, the hold up of goods at Chennai and Vizag customs were due to some information with the authorities about the illegal import of narcotics worth Rs 28 crores. So, they took the decisions to hold all shipments from China at Chennai and Vizag. On this front, there are speculations that cargo will not be stopped, but it will be re-examined. Even cargo which has been given out of charge will be re-examined.

However, there no official trade notice/circular has been issued by the Customs on this matter so far, and the industry is awaiting more clarity from the authorities.

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