TyrePlex brings you the story of hundreds who have been defeated in the "game of life" due to the tyre import restriction recently introduced by the Government of India.
A Kozhikode based company named CeeKey Tyres has been facing difficulties for quite some time now. Munshid Ali has been a long time partner of this company who imports tyres through his office in Foshan City, Guangdong Province, China. He tells us the tale of his misery as he now finds his business in jeopardy. His business has been disrupted after the Government of India imposed trade restrictions on Beijing.
This is not only the story of a single individual named Munshid Ali facing trouble due to the tyre import restriction in India on Chinese goods. There are hundreds who have been affected by the new restriction.
In Kochi, Kerala, another partner named Ashik Usman of the company named Royal Export Enterprises, was recently asked to pay Rs 7.79 lakh by his shipping company as detention charges for a consignment of dates from Iran. The rate is an increase from the normal rate of Rs 7,000, citing a lack of empty containers.
There are many who are facing similar issues like Munshid Ali and Ashik Usman. All of them state that COVID-19 had a toll on their business ventures and now the trade restriction has placed them in a tight spot. Their life has been difficult ever since lockdown and the implementation of the trade restriction.
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"After the coronavirus outbreak, many countries were in lockdown during March-April. As economic activity came down, the number of port labourers also decreased. That caused a reduction in cargo movement, and some factories were closed temporarily. And a large amount of cargo was stuck at ports. Therefore, shipping companies reduced the number of ships to stabilise costs," said Biju Raman, partner, Sreetrans Logistics (India).
According to a report presented by 'The Indian Express, The freight rate from Kochi to Europe increased from USD 500 to 1,750 (20ft containers) and USD 750 to 2,600 (40ft containers); to the USA from USD 1,900 to 3,600 (20ft containers), USD 2,500 to 4,700 (40ft containers). The rate to Dubai increased from USD 25 to 175. Though shipping lines quote USD 600 (earlier USD 200) for 40-foot containers, officials said there are no lines having 40ft equipment.
"As per our understanding, a drop in import volumes, buoyant export volumes and the delays caused by the congestion in Colombo port seem to have combined to create an empty container shortage. This is the situation across India as well as in many parts of the world," said Praveen Joseph, CEO, DP World Cochin
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Ali, who is also on FICCI's national advisory council for ports and infrastructure, mentioned that by banning import of tyres, the centre has allowed six leading tyre companies to control the business in India that is to have monopoly in this sector.
"Even after importing tyres by paying all the duties, we could get a margin as the Indian tyre prices are higher. Now, they will start hiking the tyre prices in the coming days," he said.
