Time to form a Coordination Committee to ensure hassle-free EXIM trade

Port Wings is bringing out series of articles on the major issues pertaining to the EXIM sector every week before the Tamil Nadu Government’s Global Investors Meet (GIM). This week, we analyse about the importance of Coordination between Tamil Nadu and Union Government to ensure EXIM Trade.

Source: http://www.portwings.in/articlesinterviews/time-to-form-a-coordination-committee-to-ensure-hassle-free-exim-trade/

Dr J Jayalalithaa, Chief Minister of Tamil Nadu

Tamil Nadu State, unlike the other maritime states in the country, is bestowed with three major ports – Kamarajar (Ennore), Chennai and V O Chidambaranar (Tuticorin), which are maintained by the Government of India through the Ministry of Shipping.

Besides, the state is also home to the fast growing Kattupalli Port, promoted by the L&T Shipbuilding, a Joint venture between L&T and Tamil Nadu Industrial Development Corporation (TIDCO), a governmental agency in the state of Tamil Nadu.

THREE MAJOR PORTS:

According to trade experts, the volume of trade (both export and import) through these ports is estimated to be around Rs 3 lakh crores annually.

These three major ports, maintained by the Union Government, play a major role in shaping the various sectors, either manufacturing or value-adding, and economy of the highly industrialized state.

Apart from these gateways, other Union Government-controlled agencies like Customs & Central Excise, the Food Safety and Standards Authority of India (FSSAI), Plant Quarantine Authorities (under the Ministry of Agriculture), Drug Controller of India (CDSO), Textile Commissioner (under the Ministry of Textiles) and Wildlife Authorities (under the Ministry of Environment and Forests) play an equally important role in ensuring the smooth EXIM trade in the state.

CLUTCHES OF DIFFERENT AGENCIES:

While both the Kamarajar and VOC ports are relatively free from the clutches of different agencies of Union Government as of now, Chennai Port, termed to be the Gateway Port for South India, has been bearing the brunt of lack of coordination among them.

Chennai Port is the hub port for many industries developed along the Chennai, Tiruvallur and Kanchipuram districts and other industrial clusters located in Ambur and Cuddalore.

Besides, the state is also home for many leading automobile players like Nissan, Toyota, Renault, Hyundai and Ashok Leyland.

For the past many years, these industries are totally relying on the Chennai Port for their imports (raw materials) and exports (finished vehicles).

GROWTH OF CONTAINERIZATION:

With the movement of containers started picking up through the Chennai Port’s two container terminals -- Chennai Container Terminals (run by DP World Dubai) and Chennai International Terminals (PSA Singapore), the port also started feeling the impact of lack of coordination between different agencies.

PLAIN TALK BY PORT CHAIRMAN:   

At a recent meeting, Mr Atulya Misra, Chairman, Chennai Port Trust, spoke extensively on the lurking danger of such lack of coordination between different agencies, which ultimately affect the business atmosphere at the country’s one of the oldest port located in Tamil Nadu.

Mr Misra stated: “Multiple agencies functioning in the port each sitting with a set of rule books add to the transportation costs and the country has to bear the brunt in terms of lagging behind in competitiveness in trade in the committee of nations.”

Lucidly admitting the status of industrial growth and its direct impact on EXIM Trade, Mr Misra said, “India is ranked at the 141th position among the countries on ease of doing business. China (Hongkong SAR) ranks the third position in the world. Even Pakistan is ahead of us and this calls for introspection among the various agencies handling trade in Indian ports.”

Mr Misra said the ports have a plethora of agencies like Customs, Drug Control, Plant Quarantine, CISF each sitting with set of own rule books. The situation in the port is totally unjustified as there is hardly any coordination among the agencies for the benefit of the EXIM trade. The revenue earning agencies of the government are preoccupied with clearances rather than focusing on their main job of revenue collection.

SILVERLINING:

The senior bureaucrat also said that despite these impediments, the EXIM trade is growing manifold over the years and registering a giant leap on containerization.

It may be noted that in about 200 kilometres distance, starting from Krishnapatnam in Andhra Pradesh to Karaikal in Puducherry, ports have capacity of over 10 million TEUs an year on par with international ports.

NEED FOR COORDINATION COMMITTEE:

While these major ports are governed by the Union Government, the impact of such lack of coordination directly impacts the economy of Tamil Nadu. According to port users, the adamant attitude of central agencies like Customs, which has been mandated to ensure smooth movement of exports and imports, goes by its own whims and fancies.

The lack of coordination affects movement of goods through Chennai Port and in turn, it projects the eastern gateway port as inefficient port to meet the growing demand from the trade in the region.

On the other hand, the lack of coordination among the different agencies directly impacts on the productivity of different industries.

As a cascading effect, both the trade as well as industries dependant on import of raw materials through Chennai Port feels the pinch and of late preferring to use facilities in other states.

If the trend continuous, not only these ports will feel the heat, but also the industries developed along the industrial clusters in Tamil Nadu could be forced to move to other states to keep their businesses in positive trajectory, warned experts.

So, it is time for the Tamil Nadu Government to seriously think about setting up a dedicated Coordination Committee comprising of all the important agencies linked to EXIM Trade and ensure the potential investors to come to Tamil Nadu in future.