India Regulatory Brief: Faster and Paperless Cargo Clearance and Government Eases Import Rules for Poultry

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Customs Authority to Speed up Cargo Clearances

India’s Central Board of Excise and Customs (CBEC) is in the process of establishing a paperless system for cargo clearances. This would mean an overhaul of the existing system – one that has fostered time consuming processes requiring several different types of documentation. The new reforms are ambitious, and aim to speed up cargo clearance to within hours instead of days, by 2017.

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The CBEC has already incorporated various government agencies into a single window interface. To make trade facilitation easier, an integrated declaration is in place to allow for clearances from customs and multiple other agencies like the Food Safety and Standards Authority of India (FSSAI), Plant Quarantine, Animal Quarantine etc. The government now hopes to do away with physical documentation altogether by next year; the requisite documentation can simply be uploaded online in PDF format.

Customs and clearance will be guided by risk management, and additional container scanners will be installed at ports to ensure non-intrusive scrutiny. For instance, the customs department plans to install 44 new scanners at various ports by end of 2016. Though the procurement will be divided among the customs authority and private ports, it will be operated by government customs officials.

India Eases Poultry Import Norms after WTO Ruling

India has had to alter its poultry import norms after the U.S threatened to levy sanctions citing its protectionist regime was against World Trade Organization (WTO) rules. Previously, the import of poultry raised on genetically modified (GMO) grains was not permitted. The U.S. now has to decide if the relaxation sufficiently clears access for American exporters, otherwise it may take the case to the WTO’s compliance panel.

Last year, the WTO ruled against India’s ban on poultry imports, stating that the government’s aim to protect the country from low pathogen avian influenza (bird flu) did not have scientific justification. India was given till mid-June this year to bring its import rules in line with international standards. As a result, India’s new notification clarifies that avian influenza and the areas affected by it will henceforth be defined on the basis of the definitions provided in the Terrestrial Animal Health Code of the World Organization for Animal Health (OIE).

Foreign poultry poses a credible threat to domestic suppliers and farmers as it is significantly cheaper. The landed cost of imported chicken is estimated at US$ 1 (Rs 60-70/kg) while it is around US$2.5 (Rs 150-175/kg) in the domestic market. The Indian poultry industry has asked for a concessional allowance of import of GM feed for local poultry farmers to lower their production costs and make them more competitive. Local producers worry they may lose market share by up to 15-20 percent to cheap American frozen exports.

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State Government Imposes ‘Fat Tax’ in Kerala

Kerala has imposed a 14.5 percent ‘fat tax’ on burgers, pizzas, and other fast-food served in branded restaurants. The industry estimates that there are 50-60 outlets of organized fast-food restaurant chains in Kerala, including global brands McDonald’s, Burger King, Pizza Hut, Domino’s Pizza, and Subway.

The state’s finance minister justified the new tax on health grounds, pointing to the rising levels of obesity and diabetes among Kerala’s youth. Fast-food chains are rapidly increasing their outlets to match the increase in upper middle class consumption of Western junk food. Critics of the new bill call it a revenue generating mechanism; some industry players have even decided not to pass on the levy as cost to consumers. The fat tax is also not equitable – ironically, the myriad of street vendors selling fried and popular unhealthy snacks cannot be taxed as they fall in the unorganized sector.

Alternatives have been suggested by the bill’s detractors – the government should instead raise awareness of healthy diets and the dangers of trans-fats. Many think that the government should prioritize the clean-up of water and land pollution.

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