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Monday, August 23, 2010

International Trade Restrictions - How much of control Indian Government has ???


There are some news items which regularly appear but common man may not get attracted. Here is something which has international ramifications and can potentially harm the national interests. Trade is exchange of capital goods and services and becomes international in nature when the parties involved are across the border or territories. From an era of licensing Raj, where the import can happen only when the Govt license was available and when the Govt regulations were so high, the liberalisation of economy has brought in free movement of goods into and out of the country.

ivory seized

A free flowing trade is good for the economy but unscrupulous elements utilising this do harm the national interest – smuggling and moving goods fraudulently not only results in loss of revenue for the exchequer but also is a threat to the security of the country.

cannabis drug

Most of the movement of goods is by containers – the introduction of containers has resulted in vast improvements in the movement of goods, its handling, lowered the costs and in many helped in protected movement. To those conversant with trade and with marine insurance – FCL does not need any explanation – the Full Container Load (FCL) does not necessarily mean that the container is fully loaded or has cargo to the brim. The trade goes by volumetric and not by the weight or the no. of items put inside the container. In practice, it means that the whole of the goods inside the container is intended for one. It would be economical to have the container packed to its full capacity but it depends on the type of goods. Once I had seen a containerised cargo of costly leather jackets – it had ropes running across the length and breadth of the container in which those jackets were hung without being packed in cartons or the like.

It is common knowledge that all goods imported or exported out of India pass through the procedure of Customs for the purposes proper examination, appraisal, assessment and evaluation. This is done to check the legality of the trade as also for charging taxes as applicable. There are documents known as Bill of entry and Shipping Bill which would provide the necessary declaration to the Customs about the goods that are contained inside the box.

For long clearance by the Customs and assessment of customs duty used to take long time and was cumbersome – the introduction of tariff and categorisation of goods as also the modernisation including e filing of B/E have all eliminated the delay to a large extent. Some major importers are granted the facility of green channel clearance. This is just like walking out of the airport unchecked based on a mere declaration of what you possess. Thus there would be no physical examination of goods for assessment or check up.

pangolin seized in China

The entire hub of activities once took place only in & inside the Ports leading to delay and concentration of too many goods but now we have ICDs and CFS which facilitate easier movement of cargo and containers. Some ICD are located in remote inland places also. These are common user facility with public authority status equipped with fixed installations, where services of handling, storage, clearance, assessment are all available. Receipt and dispatch / delivery of cargo, stuffing / unstuffing, transit operations by rail/road, customs clearance, consolidation / destuffing, reworking of containers, maintenance and repair of container units – are some of the activities which takes places here.

Instances of spurious Chinese products making their way into India with fake "Made in India" labels are clearly on the rise. It is natural that the trader is facilitated by all these and the trade increases bringing in more revenue for the Nation. BUT unscrupulous elements mar the facilities by misuse. Here are some recent instances of what happened:

1) 36 boxes of copper waste (dore anode) containing precious metals including platinum and palladium allegedly meant for export were seized in Tuticorin by the Central Excise. The seizure was made as only gold and silver contents of the copper waste reportedly were declared by a famous Industrial house as declared in the documents whilst it contained other precious metals like platinum and palladium.
2) Spurious goods landing into India have not been uncommon. Recently Chennai Customs seized 2 lakh pieces of counterfeit spark plugs that bore a famous brand and the made in India tag
3) Some time ago, Chinese made spurious anti malarial drugs Maloxine and amalar with ‘Made in India labels’ were seized by Nigerian govt Drug regulatory authority.
4) Consignment of fake mobile phone batteries, cellphone covers of famous brand, range of cosmetics and toiletries including skin naturals, face wash were reportedly seized by Chennai Customs.
5) At Chennai Airport, regularly star fishes, ornamental fishes, star tortoises and other animals including lizards are seized from individual passengers trying to smuggle them in.
6) At Tuticorin, a container on ship sailing to Dubai via Colombo was recalled and 5.2 tonnes of red sanders wood was seized. It was being shipped as polished Kashmir white granite tiles. In a startling revelation, it was found that the stamp and signature of customs officials had also been forged.
7) A consignment of second quality palm date packages from Saudi was intercepted and to the surprise of everyone, it had concealed inside electronic items such as LED TV, LCD TV and home theatre systems. The palm dates were also of superior quality intentionally declared as second quality to evade customs duty.
8) Not long ago, another misdeclared cargo was intercepted and found to contain honey, date syryp etc.,
9) A scrap consignment which landed at Tuticorin ended up to be highly valuable and readily usable ‘Electrolytic tin plate sheet’.
10) In a reversal of roles, two export consignment of garments intended for Malaysia from Kerala turned out to be substandard garments to exploit the export benefits.
11) It is reported that dumping of e waste has been going on for some time now. Very recently, DRI at Chennai intercepted a container full of old computer parts imported from Brunei. At the CCI godown at Tondiarpet, it was found to contain e waste – the recent hauls put the dump at more than 127 tonnes which could pose serious health hazards to public and damage the environment.

e-waste dumped

The developing countries often become a dumping ground for e wate – small industries try to extract metals from it and again would dump them. The import of e waste is covered under Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008 and can be imported only with the permission of the ministry of environment and health in addition to a licence from the Director-General of Foreign Trade.

Alarming revelations disruptive to economy and potentially harming National Security and interests, could only be an understatement. Whilst the tricksters try to con the Government and become rich, poor continue to work in all these places seeking - a quality meal a day.

Regards – Sampathkumar S


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