Bangalore: China plans to impose new rules governing entry of cargo, a move that could raise the cost of Indian exports to that country.
From 1 January, all cargo bound for China will be subject to the 24 hours advance manifest rule.
In shipping terminology, a manifest is a document that lists all cargo carried on a specific vessel.
According to the new regulation, carriers undertaking shipments to China must submit manifest details to Chinese customs 24 hours before a ship arrives at the port of loading anywhere in the world.
“Upon screening of manifest data received, the Chinese customs will advise back to the carrier whether or not the cargo can be allowed into China. Only if customs feedback/response is positive, cargo will be accepted on board a ship. Under no circumstance, the carrier will be allowed to load cargo on board if manifest filing is rejected by Chinese customs,” said a trade notice issued to customers by Chinese shipping firm Cosco Container Lines.
In case a shipment is rejected, all resulting charges fall on the shipper (exporter).
Globally, only the US and Canada have enforced such rules so far in order to prevent arms and ammunition from entering through the sea route.
Shippers say that the new requirement represents an additional burden and creates more confusion. “The costs of exports from India to China will go up because of the new rule by Chinese customs,” said S.R.L. Narasimhan, secretary, Western India Shippers’ Association, a body representing India’s exporters in the country’s western region.
China is India’s second biggest trading partner and accounts for Indian exports valued at about Rs8,000 crore between April and August, according to the figures from the Union ministry of commerce.
India exports basic raw materials such as iron ore, components and pharmaceuticals to China.
“When the US imposed such a regulation from 2 December 2002, shipping lines operating between India and the US started collecting a fee of $25 (Rs1,217.50) per standard container for providing this service to their customers,” said Narasimhan.
“Carriers may charge a token fee from their customers to comply with the new regulation of Chinese customs,” said Bernard Soh, managing director at the Indian unit of Hong Kong-based container shipping and logistics firm Orient Overseas Container Line Ltd.
The new regulation will have a significant impact on the way shipping lines and customers handle their documentation and operations for shipments bound for China.
“Both parties (the shipping line and its clients) will be forced to adjust their internal workflow in order to meet the different time scale required by the introduction of the new 24-hour advance manifest rule,” said Priya Safaya Fotedar, director, policy, at the Federation of Indian Export Organisations.
With the new rule, exporters and customers will be asked to provide manifest details and shipping instructions well in advance to allow the shipping line to meet the 24-hour advance manifest requirement, says the notice by Cosco.