Airport storage charge hike will increase cost of imported goods

After a proposed shortage in demurrage-free period from 72 hours to 48 hours, the prices of imported items like food, electronics, machinery and pharma drugs, are expected to rise, according to custom clearance agents.

The agents allege that airport operator Mumbai International Airport Limited (MIAL) has been slacking in developing infrastructure at cargo terminals, as its 'slow pace' helps it in recovering higher revenues from demurrage charges.

Last week, the trade bodies of cargo agents held a meeting with senior officials from the civil aviation ministry to discuss their apprehension in this regard. One of the largest cargo dealers operating out of the city airport sarcastically opines, "While our PM says Make in India, the MIAL's motto seems to be Quit India."

During the meeting, the cargo agents and their association discussed the lack of adequate infrastructure and manpower to handle existing volumes of foreign trade. A complete disregard for safety measures for storage and handling of hazardous cargo, radioactive, pharmaceuticals, etc were also discussed. An association member claimed, "Higher transaction cost will be detrimental to trade and industry in India."

The association of agents also blamed the customs department for delay in clearances, because despite the 24x7 clearance initiative announcement by the government, the initiative has not taken off properly. This was because less than 0.1% of the shipments are being cleared through due to lack of sufficient manpower and repeated software-related snags.

A MIAL official denied all the allegations, stating that a decrease in the demurrage period has been proposed by the government so as to bring efficiency in import clearance process. The demurrage charges have not been increased since the past 10 years and tariff is the lowest in India though MIAL has the best possible infrastructure at cargo terminals.

The official said, "MIAL will reiterate that import shipments are made available for delivery within 8-10 hours from the time of arrival of the aircraft. The rest of the dwell time is attributed to clearance and documentation process by other stakeholders. The problem lies with other stakeholders."

Despite the availability of customs 'Advanced Bill of Entry' facility, around 20-40% of the bill of entries is still being filed beyond the free period. The basic objective fails if the shipments are not cleared within the free period.