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For enhancing India’s competitiveness in international trade, the Federation of Pharmaceutical and Allied Products Merchant Exporters (FPME) has urged the central government to introduce a Standard Operating Procedure (SOP) to facilitate direct transfer of imported goods meant for re-export from the import shed to the export shed at Indian airports.
In this regard, the FPME has made representations to the Central Board of Indirect Taxes and Customs (CBIC) and the Directorate General of Foreign Trade (DGFT). The issue has been festering for the past one year, according to the FPME.
FPME has also urged the Pharmaceuticals Export Promotion Council of India (Pharmexcil) to take up the matter with the CBIC, which falls under the Department of Revenue (DoR), Union ministry of finance and issue necessary policy directions or procedural clarifications to enable this reform.
This would not only cut processing time from days to mere hours, but would also reduce costs to a few thousand rupees. FPME argues that such a facility would encourage exporters to choose Indian airports over foreign hubs like Dubai and Singapore, which are currently favoured due to their streamlined cargo handling processes.
The proposed facility aims to drastically cut transaction costs, eliminate unnecessary logistical hurdles, and promote India as a viable global logistics hub, especially for time- and temperature-sensitive cargo such as pharmaceuticals.
Under the existing system, if goods are imported into an Indian airport with the intention of being re-exported, they must first undergo a complex and costly process involving transportation under bond to a bonded warehouse, often located several kilometers away, inbounding into the bonded warehouse, storage until export logistics are ready, outbounding from the bonded warehouse under customs supervision, return to the airport for export customs clearance and final export shipment.
"This process is particularly burdensome for cold chain products such as vaccines, which require constant temperature-controlled environments ranging from +2°C to +8°C. Take, for instance, a shipment of vaccines imported from Italy and re-exported to Japan via Mumbai airport. According to FPME, such shipments must be transported 70 km to the Arshiya Free Trade Warehousing Zone, stored, and then brought back, all under strict customs procedures and costly temperature control. The cost burden of this procedure is over Rs. 1 lakh per shipment, along with a time delay of 3 to 7 days, which is a critical factor for life-saving medicines," a FPME representative explained.
FPME proposes a much more streamlined and cost-effective alternative, allowing direct movement of re-export cargo from the cold room in the import shed to the cold room in the export shed at the same airport. The process would involve only two steps, which is import customs clearance and export customs clearance.
"This single reform can drastically improve India's image as an export-friendly nation. Exporters are currently forced to avoid Indian ports due to logistical red tape. By enabling this direct shed-to-shed movement, we can win back business, enhance foreign exchange earnings, and reduce environmental impact from unnecessary transport,” a senior FPME representative stated.
“This representation/proposal from FPME presents a clear, actionable opportunity to not only help Indian exporters compete globally but also strengthen India’s air cargo ecosystem in line with global best practices. If implemented, the initiative could be a game changer, catalyzing efficiency, saving exporters time and money, and positioning Indian airports to compete with the world’s best,” concluded a FPME office bearer.
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