We talk about Imports and Exports. We talk about shipping capacities. We also talk about containerization. Seldom is break bulk cargo shipped, as the modern ships are not built to carry break bulk cargo. Mother ships call at various Ports. There are voyages to Europe and United States once in a week. As transshipment Ports were not available, the Indian cargo bound for Europe/America had to go through hub Ports like Sri Lanka and/or Dubai, and then they are dispatched to Europe/USA. What happens in such situations is, the turn round time for cargo diversion is more, making shipping costs high, and the time schedule in respect of receipt of Cargo also about a month. The feeder vessels who make journey to and fro Colombo and/or Dubai, will be costlier compared to the shipping cost, if the merchandise is conveyed through a mother vessel. There is also no break off time at the hub Port.
Cochin Port is one of the best ports, an all-weather Port in India. With the fact that there were regular visitors through sea to Kerala from time in memorial, sea routes have been designed, mapped, and virtually available. Yet, in terms of income from cargo, why is Kochi lagging behind other Ports like Tuticorin, which was set up in 1985 only. People attribute it to the labour strife. But the fact of the matter is, labour strife is prevalent but the more important aspect is political apathy to the development of Cochin Port. The Port authorities are vexed that around 60 lakh tones of Palmoil is imported into India; but its import through Cochin port is banned. Inspite of the territorial ban, palm oil is abundantly available in Kerala. Why to deprieve revenue for the Cochin Port only. On what basis or logic? What is Cochin’s loss is Mangalore, Chennai and Tuticorin Ports gain.
Kerala historically is a neglected state. There have been top political bosses in Kerala who had a hand in running the Government of the day. Shri R K Shanmugham Shetty, the last Diwan of Cochin was India’s first Finance Minister. Another great name was that of Shri V K Krishna Menon, who was left and right hand of Mr Nehru.. Kerala had surplus electricity, which it sold to neighbouring states. The income from sale of electricity was a revenue head in the State budget. Kerala has 44 rivers, and water everywhere. Today, in terms of per capita consumption of water, it is in the 20th place, lower down to Rajasthan. The National Highway stretch is very bad compared to the stretches elsewhere.
Kerala’s more than 1.5 million educated have migrated to West Asia, Europe, America, etc. Around 0.7 million are working in different parts of India. According to Government’s statistics, of 20 million expats from India, 8 million are in West Asia (most of them from Kerala). The remittances from West Asia are higher in volume (no of transactions) while United States NRIs lead in absolute value. It is also a fact that India account for about 20% of remittances to developed countries. A recent phenomenon noticed is that the people abroad do not use the money in share market operations and real estate deals, though valuation are at such amazing levels, but invest in risk free capital guaranteed deposits in banks. That is why, despite the low interest rates offered, the Deposits in Banks are swelling. AP (IT) accounts for 22% of the remittance, Maharashtra has 15%. Kerala constitute the highest 55%. RBI acknowledges that $ 40.296 billion is the inward remittance which in value is higher than the Foreign Direct Investment in India.
New generation ships are not coming to India, least of all to Kerala. Newer ships coming on-line are able to hold 2/3 times as many TEUs as ships as old as a decade. New ships are faster, undertaking more voyages than the older ships. The number of containers sucked up by new ships is manifold compared to the older ones.
There are destination wise Ports. Ports which have imports and exports in tandem. Some are only Ports having export consignments. There are some other Ports which have import priority. There are Internal Container Depots and Container Freight stations. ICDs are beyond 100 Kms of a Port while CFS is set up adjoining the port also to avoid congestion. Now, if the two ways (Import/Export) from a Port is brisk, then the problem of availability of Containers is not a problem. Otherwise, the container gone, or the container that has been off loaded, has to be transferred in an empty state, for which railways charge freight, if by Road transport it is uneconomical. Ages of the containers are also going down. So, there can be a compartitative cost only if the net imported container trade in volume compares well with net export portion.
The problem of Ports is compounded by the interpretation of tertiary policing agency like the Customs, Central Excise, DGFT, etc. Indian government publishes tariffs and import tax rates, but they are not transparent. There is no single official publication that includes all necessary information. Importers must consult separate tariff and excise tax schedules as well as any applicable additional public notifications and notices to determine current tariff and tax rates. Furthermore, different classification nomenclatures for tariffs and excise taxes cause confusion, even though they are aligned at the 4 digit and 6 digit levels. . India continues to maintain a negative import list. The negative list is currently divided into three categories: (1) banned or prohibited items; (2) restricted items which require an import license; and (3) "canalized*" items, importable only by government trading monopolies subject to cabinet approval regarding timing and quantity. India has liberalized many restrictions on the importation of capital goods. The government allows imports of second-hand capital goods by actual users without license, provided the goods have a residual life.
The laws governing customs duties are the Customs Act, 1962 and the Customs Tariff Act, 1975. The Customs Act, 1962 is the basic Statute which empowers, under Section 12, duties to be levied on goods imported into or exported from India. The categories of items and the rates of duties which are leviable have been specified in two schedules in the Customs Tariff Act, 1975. The first Schedule to the said Act specifies the various categories of import items in a systematic and well considered manner, in accordance with an international scheme of classification of internationally traded goods – termed ‘harmonized system of commodity classification’. Different rates of duties are prescribed by the legislature on different commodities/group of commodities mentioned in the first Schedule. The duties are levied both on specific and ad-valorem basis, while there are few cases where at times both specific and ad-valorem duties are also collected on imported items.
The Government of India applies discretionary customs valuation criteria to import transactions. U.S. exporters have reported that India’s customs valuation methodologies do not reflect actual transaction values and effectively raise tariff rates. Indian Customs requires extensive documentation. Processing delays often occur. In large part the delays are a consequence of India’s complex tariff structure and multiple exemptions, which may vary according to product, user, or specific Indian export promotion programme. The Government of India fixes minimum import prices for certain imported products.
The exporter/importer may have to study a lot of theory to do foreign trade. Our government, even though the export value had quadrupled from $ 44 billion in 2003-4 to US $ 185 billion in 2009-10, fails to give importance neither to the export sector nor improving its logistics and infrastructure.
