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The Indian government on 21 September 2020 rolled out new customs rules that required importers claiming FTA duty benefits to obtain a series of documents from their vendors/suppliers and submit at the time of importation.

The new rules require importers to ensure that the goods being imported should have been manufactured/produced in foreign countries and a minimum of 35% value addition has taken place in those countries. Sources said that a mere certificate provided by the exporters would no longer suffice. 

The strict requirement causes a massive delay in customs clearance, which has extended from 15-20 days to 25-30 days, and in some cases, the process would take more than a month. Many companies are facing a serious cashflow issue as a result.

Industry sources blamed the situation for containers being held up which resulted in a substantial increase in shipping costs in recent days. The government is working to improve the situation, yet the container shortage would take months to ease. 

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India