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Bar on using express air cargo for biscuits, chocolates hampering exim trade
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Friday, 03 May, 2019, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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Indian exporters and importers are facing a new trade barrier in accessing the fast track express services –air cargo, and this was particularly detrimental to the transport of perishable items including food products like biscuits, and chocolates, according to a survey conducted by researchers at the Indian Council for Research on International Economic Relations (ICRIER). The survey considered 150 stakeholders to come up with its findings.
In this regard, the Office of the Commissioner of Customs (at the Mumbai Airport Special Cargo Commissionerate), has issued a standing order (33/2018-19) to ban the movement of perishables. The order stated that these goods which they classified as “perishables” require testing and clearances by the requisite government bodies such as the Food Safety and Standards Authority of India (FSSAI) and Assistance Drug Controller (ADC).
This was due to the Courier Imports and Exports (Electronic Data and Processing) Regulations, 2010, which banned all perishables through the express or fast track route.
Therefore, their import should not be allowed as gifts or samples through the courier mode. In the process, the ban encompassed a wide range of products including medicines, biscuits, cosmetics and chocolates some of which are not temperature-controlled consignments.
However, it is also worth noting that the FSSAI’s Import Regulation, 2017, clearly lays down the process of food import for both commercial and non-commercial use such as personal consumption, exhibition and research purposes and once the requirements are adhered to there should not be any discrimination across the different modes through which the product is transported, i.e, logistics air cargo versus express air cargo.
The survey found that this led to a sudden stop in clearances of blood samples for testing, imports of cosmetics, access of medicines for patients, exports and imports of food samples for test marketing and display in exhibitions, to name a few.
The survey shows that such measures have not only resulted in India’s low rank in the Logistics Performance Index compared to countries like China, it lead to huge business losses for the exporters, importers and the express industry.
“Interestingly, India is a signatory to the World Trade Organization’s (WTO) Agreement on Trade Facilitation. Article 7, Section 8 of that agreement on “Expedited Shipments” calls for member states to “adopt or maintain procedures allowing for the expedited release of at least those goods entered through air cargo facilities”. Thus the ban seems to be against India’s position in the WTO. Further, there is a lack of uniformity and consistency in the definition of perishable and what can be allowed or not allowed through the express route, ” says Dr Arpita Mukherjee, professor, ICRIER.
The study explains that earlier there wasnot enough infrastructure to handle the perishables and its transport through air route, however presently the requisite infrastructure to store and handle the clearance of perishables is enough.
It is important that all consignments through any route should adhere to due diligence such as product testing and getting product specific clearances from requisite authorities. The survey found that express industry is willing to go through the same due diligence process as the logistics providers.
The benefit of express cargo is that it is fast track and offers an integrated service to the client vis-a-vis logistics. As India is implementing trade facilitation and is trying to improve ease of doing business, it is important to amend the 2010 regulation and allow the entry of perishable cargo through the fast track route, subject to testing and other requirements as is applicable to logistics.
“There is also a need to have a robust back-end IT infrastructure which will link Customs Express Cargo Clearance System with that of other clearance agencies such as FSSAI and ADC as has been the case of the Customs ICEGATE for general cargo. Along with this perishable should be allowed through the express route and express should have the same level playing field as logistics. If this is done, India will not only improve its rank in cross-country comparative indices but logistics costs of doing business will decline significantly. It will especially help our exports in key sectors such as agriculture, cosmetics and medicines,” says Dr Mukherjee.
Table 4: Logistics Performance Index of Select Countries (2014 & 2018)
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Parameters
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India
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China
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Singapore
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Germany
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2014
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2018
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2014
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2018
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2014
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2018
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2014
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2018
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Overall LPI Rank (out of 160 countries )
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54
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44
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28
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26
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5
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7
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1
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1
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Overall LPI Score (1-5)
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3.08
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3.18
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3.53
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3.61
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4.0
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4.0
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4.12
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4.40
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Sub-indicator - Ranking
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Customs (rank)
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65
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40
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38
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31
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3
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6
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2
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1
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Infrastructure (rank)
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58
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52
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23
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20
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2
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6
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1
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1
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International shipments (rank)
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44
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44
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22
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18
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6
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15
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4
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4
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Logistics quality and competence (rank)
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52
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42
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35
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27
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8
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3
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3
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1
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Tracking and tracing (rank)
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57
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38
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29
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27
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11
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8
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1
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2
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Timeliness (rank)
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51
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52
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36
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27
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9
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6
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4
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3
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Clearance time with physical inspection (days)
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2
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2
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3
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3
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1
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1
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1
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1
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Clearance time without physical inspection (days)
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1
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1
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2
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3
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0
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0
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1
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1
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Physical inspection (% of import shipments)
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22
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19
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6.72
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4
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5
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2
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3
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2
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Source:
Logistics Performance Index 2014 and 2018, World Bank, available athttps://lpi.worldbank.org/about
(accessed on 3 December 2018)
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