Major Indian ports have detained containers from China with officials requesting additional material before they are cleared by customs, according to industry sources and media outlets in both countries.
Two industry sources told Lianhe Morning News the containers included stock from Apple. As well as Chinese goods, products from American companies such as Cisco, Dell and Ford were also being held at local ports.
Indian sources reportedly confirmed that consignments were being held to be checked for possible coronavirus infection.
Imports are understood to be “facing hurdles” at Chennai and Mumbai ports, according to the Indian Express, which said American firms with manufacturing plants in India were concerned about “accessing crucial components from their facilities in China”.
Consignments of around 50 US firms with manufacturing operations in India in sectors such as telecommunications, automobiles, medical equipment, and consumer goods were reportedly affected.
Chennai Customs zone officials said “checks were being carried out on the basis of specific intelligence-based inputs”. But importers and industry figures have suggested India has seen the clash as a chance to press for changes to the import pattern, especially non-essential goods, amid calls to reduce the consumption of Chinese products in the wake of the crisis.
Calls for boycott
Indeed, there have been strong calls for a boycott of Chinese goods in India following the dramatic border clash last week, which saw at least 20 Indian troops killed and undisclosed casualties by China at their northern border in Ladakh in the Himalayas.
The Indian electronics and mobile communications industry organization ICEA said its members were informed that airports in Chennai, Mumbai and Delhi would also adopt new inspection procedures for all cargo from China.
India did not comment on this news and officials said “no formal orders” were issued by the government or any “specific” reason given for why firms’ consignments were not being cleared.
The move has China worried. “As a world factory, China has a complete industrial supply chain. Therefore, although some multinational companies invest and build factories in India, some of these electronic components and other components still need to be imported from China,” Lianhe reported.
Chinese research firm Golden Data noted that Ford said a batch of auto parts consigned by the company was stranded in a port in Chennai. If India really delays customs clearance on the grounds of “extra customs clearance”, it will cause serious troubles to the normal operation of local foreign-funded enterprises such as Apple and Dell,” the research firm said.
The US-India Strategic Partnership Forum (USISPF), a lobbying group representing US companies, wrote to India on June 23 to complain that the lack of transparency and delays in the customs clearance may disrupt business and manufacturing operations, which may further shrink India’s GDP.
According to the latest “World Economic Outlook” of the International Monetary Fund IMF, the Indian economy will shrink by 4.5% in 2020, due to impacts from the coronavirus pandemic.
According to the Chinese newspaper on June 19 this year, the Indian bond market lost US$14 billion of foreign capital. As tensions increase Indian leaders called for a policy of self reliance to support local manufacturing.
Russia has volunteered to mediate between India and China over their current difficulties.
In geo-strategic terms, China has built a number of bases in the Indian Ocean known as “the string of pearls” as a deterrent if India uses its strategic position to stop oil imports to China. This is a network of Chinese military and commercial facilities along its sea lines from Somalia to Pakistan, Sri Lanka, Bangladesh and the Maldives.
This story appeared initially on Asia Times Financial.