Relief for pharma firms

After days of delay, customs officials have begun to clear Chinese-origin consignments containing Active Pharmaceutical Ingredients (APIs) across ports, sources in the know told CNBC-TV18.

Customs officials have now started to issue orders to clear these consignments, after pharma companies raised concerns that the delays may lead to hamper production of essential life-saving drugs. Shipments for Dr Reddy’s Labs and Aurobindo Pharma already received clearances on Tuesday.

Customs officials and other agents involved in handling China-origin cargo, including CFSes, port and airport authorities are acting on unofficial instructions to hold back these shipments for a 100 percent physical examination at the item-level, including those containers which have received an Out Of Charge Order.

However, sources say, even after being stranded for over a week, a vast majority of the containers have still not been opened up for an examination, as clearing agents cite inordinate delays and a total lack of probable clearance time-lines. These shipments will start to rack up penalties in the form of port charges, warehouse charges, ground rent and demurrages if the delays continue.

However, for the ninth day running, there are no instructions yet for clearance of other consignments. Since Monday, customs officials permitted AEO – Tier 3 complaint importers to have their shipments cleared without a full examination. However, these importers are minuscule in number and in some cases, such as Toyota Kirloskar Motor, do not have direct sourcing from China.

Sources say some bills of entry are now also getting generated at the Kolkata port, but for all other ports, the situation remain status-quo.

Most Chinese import orders are pre-paid as the country rarely ships orders on credit. Add to that the penalties on delays that importers will have to pay shipping lines and Container Freight Stations (CFSes), if these are not explicitly waived off by a government order.
Container Freight Stations and shipping lines are privately operated.

Industry bodies have highlighted that prolonged delays will hamper production by affecting the supply chain.

“We fear that if the supply chain is broken, then there will be severe shortage of essential communication, equipment required for health, work-from-home and online education goods such as smartphones, tablets and laptops since alternative supplies are not available in the local and global markets amidst the COVID-19 outbreak,” electronics body ICMEA said in its letter to the finance ministry and customs authority.
ICMEA said that opening finished products could lead to their getting soiled and becoming unfit for sale. – CNBC TV 18