Delays in customs nod disrupt Chinese brands’ India plans | Economic Times

New Delhi | Kolkata: Continuing delays in customs clearance at Indian ports have thrown manufacturing and sales plans of top Chinese smartphone brands such as Xiaomi, Oppo, Vivo, Realme and OnePlus into disarray as they have been forced to slash bulk import orders of phones and parts from China. Extra scrutiny has also slowed goods from other countries, hitting companies such as Dyson, Bosch and Siemens, said people with knowledge of the matter.Electronics and appliance makers said production was hit last week for 3-4 days as imports were held up. Though consignments have started moving, the backlog has led to shortages and disrupted output. The curbs were imposed in the wake of heightened tension on the India-China border.Some Indian brands are also affected. Bajaj Electricals chairman Shekhar Bajaj said the customs issue will impact sales at a time when demand is recovering since components are stuck, squeezing production. Around 15% of the company’s components come from China.“At a time when appliances are showing positive growth in June, the sudden blockage of materials from China has disrupted plans,” Bajaj said. The east coast ports of Kolkata, Visakhapatnam and Chennai receive most of the shipments from China. These include mobile phones, telecom equipment and other electronics products.76844979Customs officers at Kolkata port, for example, are still examining Chinese consignments manually although the delay is now down to two days, said Calcutta Customs House Agents Association president Subhas Ghosh. “Trade volumes between India and China since June have gone down sharply,” he said.“Certain bills filed after June 30 are still going for 100% checks but that selection is at random,” Chennai Customs Brokers Association vice president Zahir Hussain added.This follows the government allowing direct clearances for bills of entry filed until June 30, having initiated 100% manual checks between June 22 and June 30, following an intelligence alert for narcotics.“The environment is pretty serious right now… We have seen the case with solar and power imports, and the ban on Chinese apps,” the owner of a leading mobile phone retail chain, familiar with brand strategies, told ET. “Anything can happen and so brands are weighing their short-term risks against rewards.”The uncertainty has made brands, along with custom house agents (CHAs) and freight forwarders, jittery about future moves by the government, with some fearing another round of 100% physical checks of Chinese consignments, or other steps such as increasing basic customs duty or simply banning certain imports.Smartphone market leader Xiaomi, No. 2 Vivo and fifth-ranked Oppo, which also makes phones for Realme and OnePlus, did not respond to ET’s queries.DELAY OF 7-12 DAYSManual checks typically lead to a delay of 7-12 days for full clearance, according to industry estimates, which means CHAs might incur demurrage charges if ports are choked and ships are not unloaded in three-four days. Warehouse space bookings also go waste if there is a delay, thus forcing brands to cut down on bulk imports.The mobile retail chain owner cited earlier said, “Although there will be a market share loss in the short term, these brands know they can capture it back soon after things get normal,” he said. The top Chinese brands account for 80% of India’s smartphone market.Delays in clearances have led to a shortage of top-selling products such as televisions and other appliances. Dyson expects its high-end vacuum cleaners will be back in the market only by the month-end due to the customs holdup, while consignments of dishwashers and cooking appliances of Bosch and Siemens coming from Germany, Spain and Turkey are also said to be stuck.Neeraj Bahl, CEO of BSH Home Appliances India, which makes Bosch and Siemens products, said the curbs will delay product availability by 10 days. “We expect a quick solution to the customs issue, since if this continues, there will be impact on sales when demand is recovering,” he said.