New Delhi: India has launched a coordinated customs and logistics exercise to help exporters handle stranded or returned cargo following the closure of the Strait of Hormuz.
The measures allow exporters to bring cargo back into the domestic system while reducing storage and handling costs as shipping lines suspend bookings and some Gulf ports operate under restrictions due to the ongoing US-Iran war.
A circular issued by the Central Board of Indirect Taxes and Customs on Tuesday (CBIC) under Section 143AA of the Customs Act, 1962 allows shipping lines to file new arrival manifests at the port of discharge followed by verification of containers and their seals with a mandatory 100% check in cases where seals are found to have been tampered with.
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The circular also states that if a vessel returns to another Indian port without visiting a foreign destination, shipping lines or their agents must file a Maritime Arrival Manifest (SAM) at the port of call, as per customs rules. For such cases, a fictitious port code will be used in the system.
In cases where exporters seek to recover their cargo, customs authorities have been directed to coordinate between the port of discharge and the port of origin of export to verify whether any export incentives — such as IGST refunds or duty drawback — have been paid and initiate cancellation of shipping bills and Let Export Order (LEO).
Reversal or recovery
The circular further requires that the port export shall take steps to ensure the cancellation or renewal of such export incentives if they have already been paid.
The circular also provides for “Back to Town” clearance after proper verification, which will allow exporters to take returned cargo back into the domestic supply chain.
A system-level change is also being introduced to allow cancellation of shipping bills even after the submission of a general export manifest, with details of such cancellations to be shared with agencies including the Reserve Bank of India (RBI) and the Director General of Foreign Trade (DGFT) through the India Electronic Customs Data Interchange Gateway (ICEGATE).
Until this system is operational, customs departments have been ordered to maintain records manually and update them once the system is in place.
Earlier on Monday, Commerce Minister Rajesh Agrawal said the Commerce Department is expected to announce some support measures to help exporters deal with the crisis in West Asia.
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“I hope that within this week … we will send you a detailed report on what steps we are taking at the Department of Commerce to support exports during this turbulent time, particularly in the Middle East,” he said.
In parallel, the state-owned Container Corporation of India (CONCOR) has introduced temporary relief measures at its inland container depots, or ICDs, where many export containers are currently stranded. The company offered 30 days of additional free storage and a 30% discount on plug-in fees for refrigerated containers, the company said in a statement.
CONCOR has also eased port charges for overstuffed cargoes and waived terminal, infrastructure and equipment imbalance charges if exporters take back containers within the stipulated time limits. It also announced an additional 5% discount on rail transport of containers returned from ports to ICD.
The facilitation measures will apply to cargo and containers handled throughout March, reflecting the immediate impact of the disruption on export logistics, the company said.
Expansion of international transshipment
The customs circular also temporarily extends international transshipment and allows less than containerized cargo (LCL) from all notified ports and airports until March 31, subject to guarantees. Customs may expand this facility based on available storage and logistics capacity.
It further allows temporary unloading and storage of liquid bulk and bulk cargo diverted to Indian ports under customs supervision and under strict conditions to ensure that such cargo is not diverted to the domestic market.
According to a senior government official, the steps are aimed at ensuring speedy handling of cargo and avoiding procedural hurdles when shipments are diverted or returned due to breaches.
The measures build on earlier customs circulars issued this month and will remain in place until March 31.
“The steps announced by the government are timely and will provide much-needed relief to exporters facing supply disruptions. Allowing cargo to be returned and reducing logistics costs will help businesses deal with immediate losses, but continued uncertainty in key shipping routes remains an issue for trade flows,” said Vinod Kumar, president of the India SME Forum.
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“While tensions in the Middle East have not yet caused any systemic disruption to trade finance, we are seeing a more cautious approach by exporters and importers, particularly in the Gulf-linked trade corridors. Some export-oriented MSMEs are facing delivery delays and higher logistics and insurance costs, leading to greater reliance on invoice discounting and receivables and receivables financing,” said RIL CEO Ketanik, RIL’s TReDS platform.
“If geopolitical uncertainties persist, demand for structured working capital solutions is likely to increase as businesses look to secure liquidity and mitigate payment cycle risks,” Gaikwad said.
The Strait of Hormuz is one of the world’s most critical maritime hubs, serving nearly 20% of the world’s oil trade and around one-fifth of global liquefied natural gas (LNG) flows. At its narrowest point, the corridor is only about 33 km wide, making it highly vulnerable to disruption.
Since the start of the conflict on 28 February, at least 16–20 commercial vessels have been attacked or damaged in and around the Strait of Hormuz, according to maritime security agencies and industry estimates.
