FedEx Joins DHL In Suspending Pick-Up Of China Imports To India
Pile-up of Chinese consignments has triggered concerns of supply chain disruptions.
Two prominent freight transporters—DHL and FedEx—have now temporarily suspended picking up shipments from China that are bound for India.
“DHL Express India confirms it’s temporarily suspending pick up of import shipments from mainland China, Hong Kong and Macau due to recent delays in customs clearance of shipments into India,” the company said in an emailed response to BloombergQuint. “We’re in close contact with our customers to keep them abreast of the developments.”
FedEx, too, confirmed a similar development. “We’re currently facing backlogs beyond our control, leading to congestion at our facilities,” it said in a statement. “We’ll continue to monitor the situation and will resume our normal operations as the circumstances allow.”
Both companies refused to provide any further comments on the issue. A similar query to United Parcel Service has yet to be answered.
DHL first informed customers of this suspension on June 26, as reported by some news media.
Indian ports are piling up with Chinese consignments, Bloomberg reported, triggering concerns that the recent border conflict between the two countries could disrupt supply chains. China is India’s biggest source of imports, with purchases including electronic goods, industrial machinery, organic chemicals and pharmaceutical ingredients running up to almost $70 billion last year.
Last week, the Pharmaceuticals Export Promotion Council had sought faster clearance of imported goods from China by the Indian customs department. In a letter written to the Department of Pharmaceuticals, Pharmexcil Chairman Dinesh Dua said critical raw materials, intermediates and active pharmaceutical ingredients are not being cleared for reasons “not known to the industry at all”.
Dua said if the consignments aren’t cleared with top priority, then the pharmaceutical industry’s production and supply chain may “get completely diluted”. CNBC reported on Tuesday citing unnamed sources that consignments with APIs are starting to get cleared.
Smartphone makers are facing a similar challenge. Sudhir Hasija, chairman and founder of Karbonn Mobiles, which builds smartphones, chargers and set-top boxes told Bloomberg that five of his consignments are stuck at Indian ports. “The government collected customs duty and GST on them. 100% of the inspections are done. Now I’m told they are waiting for release instructions, from whom I don’t know. I haven’t received any communication.”
Since a bloody conflict in the Galwan Valley of Eastern Ladakh killed 20 Indian soldiers, Prime Minister Narendra Modi's administration has been exploring stringent economic measures against China. It plans to impose higher tariff and is also discussing increasing import duty on products, Bloomberg said.
But there are also worries that this could harm Indian businesses more. Stopping imports from China at domestic ports will lead to losses for those that placed orders prior to border clashes, Union Minister for Micro, Small and Medium Enterprises Nitin Gadkari has said.
Goods may take more than a month’s time to arrive in India and local businesses will suffer if goods remain stuck or are returned because they originated in China, Gadkari said in an interview to BloombergQuint. The government, Gadkari said, can think of imposing restriction or duties on future imports.
On Monday, India banned 59 Chinese apps citing national security concerns.
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