Customary Delay

Kolkata, Aug 18 | Updated: Aug 19 2004, 05:30am hrs
We are good at announcing big plans and policies, while at the grassroot level, nothing changes. In the second of our series on the nitty-gritties of the problems faced by exporters, we take a look at how they fare in Kolkata

The US department of homeland security seems to have a good friend in Indias customs department - while homeland strip-searches even VIPs entering the US, Indias babus do the same with export cargo. Not once, but twice.

Ask Mr Rajesh Mehta of Rajesh Exports Ltd, a listed company that is the biggest Indian manufacturer and exporter of jewelry. The Bangalore-based firm reported a turnover of Rs 3,050 crore during 2003-04 with the US, UK, UAE, Kuwait and Singapore being its key markets. All this in the face of incredible odds.

Consider. A shipment from an export-oriented unit (EOU) must be accompanied by two sets of shipping bills - one for EOU customs and the other for airport customs. The first set of bills is called the pink bill since it has a colour-coding strip on top. It is filed in quadruplicate. EOU customs retains two sets, and returns two, one of which is for the airport. Incidentally, there are similar codes for advance license (yellow), drawback (green) and DEPB (blue).

But at the airport, the official gives the pink bill a cursory look and demands the white bill (on the lines of what is submitted by non-EOU exporters).

Mr Mehta claims that this is an unnecessary demand, only adding to the paperwork.

The shipment is packed and sealed in front of EOU customs and then taken to the airport - where it is unpacked, inspected and sealed again in front of airport customs, says Mr Mehta. After that a customs official escorts the package to the airline strongroom. The whole process can take hours of precious time.

Mr Mehta laments the governments lack of faith in exporters. He says that while the government may claim to have simplified procedures, it has not reduced the heavy paperwork involved.

The harried exporter also has a word or two to say on policy shifts. About a month back, we were told by the government that the letter of credit (LC) has been reduced to 90 days from 360. This comes as a big surprise, since for import of all other commodities the LC remains for 360 days, Mr Mehta says.

He cant understand the logic, and says the commerce ministry has not been able to come up with a credible explanation.

Half-hearted policy steps are another issue. In the mini-Exim policy announced by the government about seven months back, gold import was brought under open general license (OGL) and the Reserve Bank of India was supposed to issue guidelines on this, Mr Mehta notes. But we are yet to get clear-cut guidelines, he says.

RBI officials, while conceding the delay, claim that a notification was issued on July 9, 2004 stating that EOUs and units in special economic zones (SEZs) and export processing zones (EPZs) are now permitted to import gold.

TAILPIECE: Kolkata is among the cheapest major ports for exporters as well as importers. Mumbai is the costliest - customs officials cite the higher cost of living to charge more speed money.