Cochin Port sees 30% dip in Chinese imports; customs revenue shrinks
With the India-China border crisis escalating to a trade friction between the two countries, Cochin Port has witnessed as much as 30 per cent reduction in imports from China in just under one month. Due to prevailing uncertainties due to delayed movements of the consignments, many traders themselves have opted to reduce the Chinese imports.
Simultaneously, customs duty revenue has taken a hit due to reduced imports from China. While electronic goods comprise a large chunk of imports from China, general category items such as pens, steel and plastic goods, fruits, tiles, plywood, furnishing fabrics, rexin and school bags are the other major imports from the country.
Imported electronic goods are charged 20 per cent customs duty over and above 18 per cent GST charges, taking the total tax levied to about 40 per cent. The total tax on other goods comes up to 30 per cent. The trade friction and the resultant dent in the customs revenue comes at a time when the economy is recuperating from the COVID-19 pandemic.
Earlier, global logistics majors DHL and FedEx had suspended shipments between India and China as customs officials at both the countries were reportedly unwilling to clear consignments or cargo lying at the ports/airports following the Galwan clash. More than 2,500 tonne consignments, including computers, TV, fridge, furniture, automobile components, etc in 300 containers have been held up at Cochin Port.
On the India side, the delay arose after the customs officials decided to do 100 per cent checks of goods from China, as opposed to random checks earlier. Speculations were also rife that the government was considering hiking customs duty on a number of products, mainly imported from China.
The delay in customs clearance has led to a hike in prices of electronic goods as the demand for laptops, tabs and smartphones has risen as school classes have moved online. Demand for electronic goods has peaked even in comparison to festive season sales.
Meanwhile, the government is mulling to restrict low quality Chinese imports, and for that technical regulations, which includes safety and quality standards for about 370 products are being formulated with a view to cut imports of these non-essential items from countries like China, sources added. These items include chemicals, steel, consumer electronics, heavy machinery, telecom goods, paper, rubber articles, glass, industrial machinery, metal articles,furniture, pharma, fertiliser, food and textiles.