Finance ministry increases 'risk profiling' of shipments from China

Govt taking steps to address possible cases of under-invoicing

The finance ministry’s revenue department has increased ‘risk profiling’ of consignments shipped from China to identify possible cases of under-invoicing, a senior government said on Monday.

“The commerce department has flagged the issue, we have had meetings with the revenue department. The revenue department is taking action….Early reports indicate that the Customs did stop consignments, and some seizures are happening,” the official said, citing anonymity.

The comments have come in the backdrop of imports from China rising about 12 per cent to $75.87 billion during April-December. On the other hand, exports fell 35.58 per cent to $11 billion due to continued Covid-related strict lockdowns in the neighbouring country.

Government officials said India was not able to push exports to China due to the pandemic. On the other hand, it is not easy to rein in imports from the country as Indian industry is dependent on China for essential raw materials and intermediary goods. “We are also conscious of the fact that there may be imports from China of sub-standard quality, which consumers may not be aware of. We need to focus on standards,” another government official said.

Trade with Russia

According to the commerce and industry ministry data, inbound shipments from sanctions-hit Russia jumped 400 per cent to $32.88 billion during the first three quarters of the current fiscal year. This was mainly on the account of India purchasing discounted crude oil from Russia, which has resulted in the country becoming India’s fourth-largest import partner.

This has been working as an advantage for India as the country has been able to refine and export petroleum products to other nations. India has also reached out to Russia to increase its purchases from New Delhi.

After witnessing contraction for six consecutive months starting March, exports to Russia, however, are slowly picking up. Government officials said rupee trade was yet to pick up in full swing as exporters and banks were still facing challenges in executing it.

“There are some market access and standards issues with Russia. For instance, for meat exports they have to do certain inspections. Because of the Russia-Ukraine war, perhaps they are also facing difficulty. There is a good market for electronic items in Russia and we will be pushing our electronic items to Russia. Russia is facing sanctions ….we have been pushing for rupee trade,” one of the officials cited above said.

As of December, nine Indian banks have been given approval to open 17 special vostro rupee accounts for overseas trade with Russia. These Indian banks include — UCO Bank, Indian Bank, HDFC Bank, YES Bank, SBI, IndusInd Bank, IDBI Bank, Canara Bank, and Union Bank of India. Apart from that, two more vostro accounts have been opened with Russia’s two banks – Sberbank and VTB Bank.