India-China Tensions: Chinese goods are Stuck at Ports, but who is at Loss?
According to the reports, the whole world is currently suffering from the Corona virus epidemic. The number of victims is also increasing in India. No effective drug has yet been developed against the corona virus, but three things play a key role in treating or diagnosing the symptoms: a ventilator machine, an infrared thermometer and an oximeter.
All three medical devices are made in India, but a large number of small parts are imported from China to make them. That is why at present, apart from the companies importing medical devices in India, the question in the minds of medical workers and the public is whether the ongoing tensions between India and China will lead to a shortage of these items.
In the first week of May, tensions between India and China over the LAC in the disputed area of Ladakh escalated and finally twenty Indian soldiers were killed in a violent clash between Indian and Chinese troops in the Gulwan Valley on the night of June 15 and June 16. 76 others were injured during this clash. China has not yet made an official statement on the number of soldiers killed and wounded. In this incident, after 45 years on the LAC, Indian soldiers were killed by the army of another country.
Since then, there has been a growing demand in India for boycotts and bans on goods imported from China. India’s federal government has so far not explicitly called for a boycott or a reduction in trade with China, but the Ministry of Railways and the Ministry of Telecom have indicated a reduction in imports from China in the future.
‘Pharmaxil’, India’s Pharma Export Council, has expressed concern over the supply of medical equipment waiting for customs clearance of goods stranded at ports or airports after arriving in India from China.
The role of medical devices
Trade between India and China has nearly tripled in the last two decades, with medicines and medical devices playing a key role. While India is dependent on medicines imported from China, medical devices also play a major role in India’s growing medical tourism and medical facilities. According to official figures, between 2019 and 2020, India imported 1,150 crore worth of pharma-related items from China, including raw materials for making medicines as well as medical equipment.
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Although most of the large medical devices imported into India come from the United States, China plays a key role in the small parts used in the devices assembled in India. Experts say India is not as dependent on China for the supply of medical equipment as it is on raw materials for making medicines. But still small but essential items like hardware chips, motherboards or digital LCD or LED screens for medical devices assembled in India usually come from China.
Why worry imports topic?
According to Dinesh Dua, head of Pharmaceutical, an exporter and importer of medical goods, “a large number of medical devices are being delayed in reaching other cities due to slow clearance at ports.” Voices are being raised in India about a boycott of Chinese goods, but there is less talk about what happened to the imports that have reached a few Indian ports in recent months.
Some major pharma companies, speaking on condition of anonymity, said that if goods imported from China to India remained stuck at customs clearance for a long time, the loss would not be to China but to India. The first is that there will be delays in delivering essential medical supplies to hospitals or retailers, which is not good news for patients.
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Another thing to consider is that traders importing from China usually pay up to 75% in advance. Only then do the goods reach India for delivery. The longer it lasts, the more Indian businesses will suffer. In case of non-compliance, a letter of guarantee is issued through a bank guarantee. And every unilateral cancellation of imports lowers the credit rating.
Thirdly, the fare for delivery of goods from China to India is also paid in advance. In such a situation, the question arises that when the three devices or their parts required to compete with Corona have reached the customs, what is the point of delay?
In India, Federal Minister for Shipping, Transport and Small Business Nitin Gutkari had asked the Finance Minister and the Industry Minister to ‘clear consignments stranded at Indian ports as soon as possible’ as it would cause severe damage to Indian businesses.
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But the question is, why are consignments stuck at ports? And what is the reason for delay in clearance? “There are a few security protocols that are very important to follow,” said a senior customs official. Vijay Kumar Gaba, CEO of Investor Global Research Pvt. Ltd., an economic watchdog, said: People focus on non-essential items from China, such as children’s toys, Diwali lights and cheap bags or clothes.’ Experts believe there are two reasons why goods from China are stuck at ports.
The Corona virus, which started in Wuhan, China, has spread around the world, so all kinds of goods, including raw materials, are being tested. Although the government has not made a formal statement, experts in artificial intelligence and internet security believe that a full investigation is underway into electronic goods coming to India from China. So that any kind of spy software cannot enter India.
According to Vijay Kumar Gaba, the first sample testing was done during customs clearance. But now 100% of the goods are being tested.
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