Tension with China hits Indian mobile industry supply chain


India’s growing mobile and electronics industry seems to be at the receiving end of the sudden aversion to imports from China.

The border clash between the Indian and Chinese armies June 15, in which 20 Indian Army men were killed with clubs and rods, has given rise to a growing chorus for boycotting Chinese products and the Indian government has been taking proactive steps to lower dependence on imports from China.

The Indian Cellular and Electronics Association has written to finance minister Nirmala Sitharaman, saying that all China-origin imports of the electronics industry have come under adverse action by the customs at the ports without prior warning, which has impacted the supply chain.

“There was refusal to clear followed by delays, and now, talk about 100 percent examination. The logistics of seamless movement is in total disarray,” ICEA chairman Pankaj Mohindroo wrote in the letter.

In another letter to Ajay Bhushan Pandey, secretary, department for revenue, and Ajit Kumar, chairman, central board of indirect taxes & customs, the ICEA has noted that there is an across-the-board system delay in assigning DoE numbers, and queries are being raised for regular materials and all shipments are being subjected to open examination, including opening of each box and repacking, among other issues.

The ICEA noted that essential parts, components and accessories required for manufacturing in the 200 plus factories which came up following the adoption of ‘Make in India’, ‘Digital India’ and ‘Phased Manufacturing Program in the mobile industry have been impacted.

The industry body raised concerns in the letter to the finance minister that if the supply chain is broken, there will be severe shortage of essential communication equipment such as smartphones, tablets and laptops required for the health network, work-from home and online education, since alternative supplies are not available in the local and global markets amid the COVID-19 outbreak.

Mohindroo noted that these goods are contributing valuable customs duty and IGST to the federal and state exchequers.

He also mentioned that companies have received word from Chennai, Mumbai and Delhi airports about the new examination procedure for all China-origin consignments of being subject to 100 percent examination.

He urged the minister that the 100 percent examination of only China-origin goods be stopped so that the supply chain moves without hurdles.

“There are enough checks on inputs in the system, and there is little likelihood of any danger from China-origin imports. Of course, dumping actions have to be checked, and this is best done by the law,” he said.

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