Pharma consignments from China held by customs, importers worried

Laxmi Yadav, MumbaiThursday, June 25, 2020, 08:00 Hrs  [IST]

Thousands of drug manufacturers and importers are having a harrowing time as imported consignments of pharmaceutical raw materials from China have been held up by customs authorities at ports and airports across the country for inspection since the last couple of days, amid the ongoing border dispute between India and China in which 20 Indian soldiers have been martyred.

The increased scrutiny on shipments from China at ports and airports in Mumbai, Chennai and parts of the country has led to a piling up of imported consignments of bulk drugs and drug intermediaries worth more than Rs. 100 crore.

The development comes on a day when the government made it mandatory for sellers to mention ‘country of origin’ on products to be sold on government procurement portal Government e-Marketplace (GeM).

It is learnt that the Union ministry of commerce and industry has not formally given any instruction to customs authorities to stop clearance, the imported consignments arrived at Mumbai airport and port on Tuesday have not yet been cleared by the customs department. However, the materials arrived from the other countries are already cleared.

Said Manoj Kumar Kedia, Commissioner of Customs (Import), Mumbai “A thorough checking on consignments originating from China, Hong Kong is underway since Tuesday based on intelligence input that shipments containing contraband are coming to the country. The consignments will be released within one day or two days. The materials arrived from the other countries have already been released.”

With the delays in customs clearances, the demurrage charges will go up, and is likely to offset the gains from the imports from China for importers, thus disincentivizing them, said a drug maker on condition of anonymity.

He said “The government of India should come out with clarity on the stoppage of import from China. The sudden stoppage of imported consignments of pharmaceuticals from China has sent drugmakers and importers into a tizzy. They have already paid customs duty and GST on the imported consignments. Some of them have imported Chinese raw materials for export purposes.”

As of now India imports nearly 68 per cent of active pharmaceutical ingredients, by value, from China. The import of APIs has risen at a CAGR of 8.3 per cent from 2012 to 2019 and the bulk drug import reached a value of Rs. 249 billion in 2019.

“We are dependent on China for supply of bulk drugs. If the government plans to curtail import of bulk drugs from China, it should first put in place adequate infrastructure for production of APIs, drug intermediaries in the country,” he added.

It is understood that the customs authorities have hinted at delay in clearance of consignments without citing any specific reason to the importers.

Said Viranchi Shah, senior national vice-president, Indian Drug Manufacturers' Association (IDMA), “It is prudent to wait for a day or two until the actual reason behind the consignments held up by customs authorities is clarified.”

If the imported consignments are not cleared in a couple of days, the industry body will take up the issue with the government.

However, as of now no consignments are stuck at Chennai port, airport for inspection.

Said R Srinivasa Naik, Customs Commissioner (Import), Chennai said “There were rumours doing the rounds on Tuesday morning that imported consignments from China were being held up by customs authorities at Chennai port and airport. All the imported consignments were cleared by customs officials by Tuesday afternoon. So far no consignment coming from China is held up for inspection.”