Recently, news has begun to circulate in foreign trade circles that India will suspend customs clearance of Chinese goods, 100% inspection of goods from China, and goods and documents that have been cleared will also be re-inspected, involving all ports of Indian sea, air and land transportation. In fact, no official notice has been issued by the Indian government or Indian Customs, but the news circulating in the foreign trade circle is not groundless.
“We produce four-way elastic fabrics, mainly exported to India. Several Indian customers make millions of dollars every year. Recently, the goods sent to India are at the port, and the Indian customs requires 100 % inspection, but basically there is no problem, but the time will be a little longer.” said a person in charge of a foreign trade company in Jiangsu and Zhejiang regions.
“Indian customs has suddenly become strict recently. All goods must be inspected, but they can basically be cleared. If it doesn’t work, you can only spend some money. The problem is not big. As for whether there will be more in the future. Other changes are not yet clear,” said a freight forwarder from Shanghai.
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Indian customs is tightening and 100% inspection of goods has begun. It is a fact that delivery may be delayed!
Customs clearance time is extended, order delivery time is compressed
For orders, especially foreign trade orders, delivery time has always been a key point! In actual operation, due to the complex fabric technology and many processes, it usually takes about a month, or even more, at the fabric production site. The second is transportation. Usually sea freight is cheap but slow. It usually takes about 20 days to arrive at the Indian port. At this time, due to all inspection problems, customs clearance time is extended, which will inevitably compress the entire production process.
If fabric traders want to deliver goods on schedule, they must work hard on production and transportation time. There is great uncertainty in the production time, whether the factory is busy, whether the color quality is acceptable, etc. Once the control is not timely, production will not only fail to save time but may also delay more time. At this time, the only way is “transportation”. gone.
The only way to save transportation time is to change the transportation method, from cheap and long sea transportation to expensive and efficient air transportation. In addition, due to the recent reduction in flights due to the epidemic, air freight costs have quadrupled. The original air freight cost was generally about 10 yuan/kg, but now it is about 40 yuan/kg. From about 230 yuan/ton for sea freight to 40 yuan/kg for air freight, the price has increased more than 170 times, which means that once air freight is used, there is basically no possibility of profit.
In the near future, textile workers need to consider the delay in customs clearance, seize the time for production, and avoid losing all profits and causing losses by air freight.
The extended customs clearance time will bring more or less delivery troubles to foreign trade exports. Once more strict measures are implemented in the later period, it will inevitably bring more obstacles to the textile trade.
Orders decreased again , payment for goods continues to be delayed
At the beginning of the overseas epidemic, especially when India announced a nationwide blockade on March 24 and suspended a large number of industrial production activities, my country’s textile industry immediately faced various challenges. Order cancellation, delay, suspension. The Indian economy, which relies heavily on labor, came to a standstill immediately after the flow of people decreased. Textile fabrics that have arrived at various factories cannot be made into clothing through the production line and flow downstream; fabrics that have been transported and arrived at the port can only wait endlessly for the cargo owner to pick up the goods.
India mostly serves as the intermediate “fabric-garment” production and processing link in the textile and clothing production chain, and their end customers are often from Europe and the United States. The decrease in orders from India is not only due to the severe epidemic in India and restrictions on the movement of people, but also mainly due to the shrinking consumer market in Europe and the United States.
If trade obstacles between China and India continue to increase, and the border conflict between China and India leads to a “boycott of Chinese goods”, it will affect the entire textile production chain. Will Europe and the United States turn to other countries because the production time is too long? Similarly, will India turn to other regions because of the complex trade processes between China and India and concerns about domestic public sentiment? Once this happens, it will definitely make the situation worse for textile workers who already have few orders from India due to the epidemic.
In addition, these impacts will also lead to serious delays in payment. According to the person in charge of a textile foreign trade company in Jiangsu and Zhejiang regions, several of their larger customers are from India. Under normal circumstances, these customers have always performed very well in terms of payment, and sometimes they even advance part of the payment in advance. However, all their payments have been delayed this year. Some customers can only guarantee part of the payment upfront; some customers have not paid since the end of the year. There are even some traders in the market who no longer plan to take orders from India in order to avoid payment problems.
The epidemic has made it difficult to determine the time for payment. If trade obstacles from India are added, it may be even more difficult to obtain payment.
However, India’s more radical approach has not yet appeared, and the Indian government will not implement it regardless of rational considerations! India being our important trading partner means a lot to our textile export industry. Most of our textile people engaged in foreign trade will have several close relationships with Indian customers, and no one is willing to miss the opportunity for cooperation because of the wrong policies of the Indian government. But at the same time, our textile workers must be vigilant enough to avoid the situation of losing both money and goods. </p
