Over the years, the Government of India has taken several steps to facilitate imports and exports with other countries. Detailed trade agreements (for example, with Vietnam, Thailand, Singapore, Indonesia, Malaysia- ASEAN nations) have provided access to new markets, encouraging market integration, and enhancing competition. This pushes India's industries towards innovation that benefits consumers in the long run. Even though the Government has worked to reduce the bottlenecks associated with shipping import and export processes, imported goods are still detained due to mistakes committed by importers. This results in massive losses for the importer and other entities in the supply chain for whom the goods were meant for. In this article, we will look at 9 reasons or mistakes committed by importers:
1. Imported goods having the wrong classification as per customs requirements
The customs tariff followed by India is synced with the Harmonised Commodity Description and Coding System (HS) introduced by the World Customs Organisation. Tariff classification helps to determine the right code number for imported goods to ensure they are accurately recorded. This helps to apply the correct tariff rate for the goods and also helps to determine regulations that apply to imported goods. ...
2. Products not having specific import license
Some imported goods feature restricted items that require an import license. It is important that necessary licenses are obtained from designated authorities that can provide these certificates prior to the actual import.
3. Inaccurate/incomplete Certificate of Origin
Importers fill and produce certificates of origin to gain preferential rates of duty for imported goods. Customs officers can deny claims for preferential rates and detain goods if the certificate of origin is incomplete or alterations are not officially authenticated.
4. Import documents not received on time
The correct documentation helps the seller from the country of origin and the importer to handle transactions in an efficient manner. This includes time management, claims on loss, and payment protection. These documents are essential for import of goods. However, in some instances, the importer doesn't receive the import documents on time, especially when the transit time from the port of loading to India is only 3 to 7 days.
5. Unavailable/incomplete FSSAI License
It is important to have a FSSAI License for importing food items to India. FSSAI issues the license after thorough verification of the importer. Imported food products with an incorrect FSSAI license will be detained.
6. Detention-free period not requested at the time of import
Detention charges are applied when the container is collected but not returned to the carrier on time. If the container is held beyond the designated free days, the charges will start to be levied. A detention-free period must be requested at the time of import to prevent these charges.
7. Unavailability of product catalogue/literature
Importers are advised to provide write-ups, catalogues, literature or drawings of the goods they plan to import. This helps officials to ensure authenticity of the goods and clear them quickly. Products without such information are unlikely to be cleared.
8. Goods not meeting the standards of Indian Governmental Agencies
Import is allowed only for legal goods that are made in the exporting country under relevant legislation. Counterfeit goods are often shipped and detained by customs due to poor quality and finish.
9. Labeling and packaging not done as per Customs norms
All imported goods that will enter the retail market should have adequate information written on labels that will help identify the goods. This paves the path for the usage of these goods in the Indian market.
We hope the insights featured in this article help you import goods in an efficient and hassle-free manner. At ShipMyIndia, we provide end-to-end solutions that take care of all possible shipping hiccups, from the port of origin to the destination port. This allows you to focus on your core area of expertise while we work to ensure your consignment is safe and en route to its destination.
Feel free to get in touch with us for your queries.
With lockdown restrictions being eased across India after the second COVID-19 wave, trade was expected to recover and pick up quickly. This hasn’t exactly panned out the way the Indian exporters were hoping for. The demand and order books for the exporters are robust but they are currently faced with a problem which probably the entire shipping industry hasn’t faced ever. There is currently severe shortage of containers and the ocean freight rates are sky rocketing every day.
China manufactures close to 85% of shipping containers used across the globe. However, since the start of the pandemic, Indian exporters have struggled to get access to containers. The border situation between the two countries has not helped trade either. Today, it costs upward of $3000 to import an empty container from China - this is more than treble of the $250 to $300 it cost a few months ago. Currently, the waiting period for a container is 10 to 15 days.
Scarce availability of containers and fluctuating container charges are disrupting the profits earned by exporters. Today, it costs around $7000 upwards to export shipments to the US (in a 40-feet container) - a jump from $2500 just a few months ago.
This has created a serious issue with the exporters, as the export orders are ready to be shipped but at these escalated ocean freight rates, it puts the entire shipment into loss. But if the exporter waits for the ocean freight to come down or renegotiates the terms of the shipment his working capital is blocked till the shipments are not executed.
The shutdown of a few Chinese ports following increasing COVID-19 infections has further hit a section of Indian exporters.
The All India Spices Exporters Forum has complained that exporters who have signed off long-term Cost, Insurance and Freight (CIF) contracts are taking a hit as most customers refuse to revise contracts. This prevents exporters from competing in the global market. This crisis has hit exporters when they were expecting to reap the benefits of a rise in demand for merchandise. It also threatens to derail India's $400 billion target set for FY22 exports.
The exponential jump in shipping costs has compelled the Indian government to consider introducing incentives to set up domestic shipping lines. It also plans to provide temporary fiscal support to exporters over the next 6 to 7 months - this will help to honour the supply commitments of exporters for that time period.
The government is also planning to reintroduce the Transport and Marketing Assistance (TMA) scheme that will reimburse exporters of farm products a portion of freight charges and provide marketing assistance for selected agricultural produce.Exporters also allege that several global shipping companies have formed cartels. They say that this is evident in how the world's top 10 shipping companies continue to earn massive increase in operating profits and revenues, even during the pandemic.
Exporters also highlighted their concerns about blank sailing or void sailing, which occurs when ocean line service operators decide to skip a particular port, region, or entire leg on a route. This makes it even more difficult for exporters to gain access to ships.
Indian exporters have asked the government to intervene and set up a public shipping company that serves as an umbrella organisation that protects their interests. As an alternative, the exporters also suggested scaling up of the Shipping Corporation of India or joining hands with private players such as Great Eastern Shipping and Essar. The biggest advantage of the Indian government stepping in to support exporters will be ensuring availability of ships and containers in India.
The Christmas season and the winter orders that come along with it represents the most profitable period of the year for exporters. Unless immediate remedy for container shortage and high freight charges isn’t found, exporters will struggle to find solace during Christmas season and beyond in 2022.