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India is All About Customs…

06 April, 2010
I have often had a conversation with my wife about what we would like our children to be when they grow up. Of course, the right answer is that we should encourage them to pursue whatever passion they have (legally, of course). But she is of the opinion that there should be a doctor and a lawyer in the family. The India experience has taught me that more than medical and legal expertise, it is imperative to have an Indian customs agent as member of the family. Let me explain.
Actually, before I explain, I wanted to let the readers know that I have come up with a new acronym (I spent time in the US working for the Department of Defense, and any and every partner to the DoD had a book of acronyms. I think that’s where I get the affinity for acronyms). Everyone knows of the American Born Confused Desi (ABCD). I have coined a new one – Indian Born Confused American Desi (IB-CAD), which is what I am. Back to the explanation for why my four year old will grow up to be an Indian customs agent.
My wife is a health and fitness nut. Of course, she had me try power yoga, and I threw my back out, not to mention how sore I was from the various digits that the so-called instructor was turning my body into. By the way, I am a sports guy and like playing tennis, badminton etc. rather than hang out at the gym or have another man give me a massage or stretch my body either pre or post yoga. In any case, she has been researching the latest diet crazes in the US, and stumbled upon one called The Clean Program, which basically purges your system and then forces one to go on a smoothie diet. From a purging standpoint, some pani-puri from a street vendor in Bangalore will do the same trick (and I speak from experience) and cost a few orders of magnitude less. The Clean Program involves a kit that one has to purchase to get going. Prior to ordering, my wife had inquired whether the vendor shipped the kit to India, and as expected, the sales guy on the other side, trying to meet his sales quota, answered in the affirmative without flinching. My wife placed the order, When my wife called the Clean Program folks in the US, they had assured her that they have shipped product to India, and given the perishable nature of some of the products they will be shipping, that it will get to us in 2-3 days.
Of course, there was a significant charge for expediting the shipment. Obviously, the company didn’t know rule number 1 of shipping a consumer product to India – that “no two shipments to India are created equal”. The company shipped the product from the US to the UK, where it changed hands to a different courier who then had the shipment brought to Mumbai. There it was apparently handed off to a local logistics company to clear through customs and get it to our doorstep.
The customs folks looked at the labeling on the product, and since it indicated a “program kit”, that to them meant that it was a medical kit of some kind for sale in India, or that something had come in a “knocked down” fashion and was going to be assembled in India. They indicated that since my wife and I did not have an import license, we would be levied a fine to the tune of INR 25,000 (over $500). I am used to a customs duty of 10-30%, but this number was 300% of the actual value of the shipment itself. We pushed back on the clearing agent, who then came back with the news that the customs department would now need a INR 1,00,000 ($2000+) bond on INR 100 stamp paper. We neither knew what the 1 Lakh bond meant, nor the INR 100 stamp paper (which my driver told me is very difficult to come by since the stamp paper is not easily available in that denomination). That meant that even if we were crazy enough to come up with INR 1 lakh, we could spend days looking for an INR 100 stamp paper (only in India!). Finally, we did what any rational person would do in this situation…scream really loudly, followed by “you can keep the damn kit!!!!”. There were several reasons given to us for levying the fine: the description on the invoice did not match the contents of the box (which, according to the sender is no different than what they do for shipment to 25 other countries); the word “kit” means that it’s for sale and not for personal use; the word “program” means that it is some computer equipment that could be assembled (that was before they opened the box) etc. etc.
After telling the clearing agent to let the customs people know that they can keep the shipment, my wife went on the offensive with the Clean Program people for putting us through the headache of the run-around by India customs. They were apologetic, and told us that this had never happened to them in their prior shipments to India. Which brings me to the earlier point – no two shipments to India are created equal.
While the above was going on on the personal front, there was yet another shipment stuck with the Bangalore customs folks who, I am convinced, are in competition with the Bombay guys to see who can get the award for giving Mohanjit Jolly the biggest migrane of his life. It’s amazing that there were two simultaneous headaches with two different customs departments. Here is the story. In 2008, the US office of DFJ bought two video conferencing systems, one for the China office and the other for the India office. But by mistake, both systems were shipped to the China office.
At DFJ, I have been bouncing around from one temporary office to another for 18 months until effectively summer of 2009, when we moved into a more permanent office. There was really no need for the video conference equipment till then. Originally, my thought was to simply go to Shanghai, and pick up the equipment and bring it back with me.  That plan changed due to logistics, and since there was a clearing agent in Bangalore that one of our service providers had used in the past, he convinced me that it was less of a headache to simply have the China office ship the equipment to the India office, and have the clearing agent on the ground help getting it released from customs.
What seemed like a logical decision again turned into a completely illogical one once the reality of dealing with customs came into the picture. After delivering the more reasonable information that they requested such as use of the system, and a more legible copy of the invoice etc, came the more unreasonable requests. Customs wanted the original catalog SKU number, description and pricing from 2008. The issue is that the product was ordered online from Dell, and since the product is outdated, there is no listing of that particular product.
Instead, the next-generation of videoconference systems are listed on the current Dell catalog, which are not acceptable, even though the pricing, and therefore the duty would have been higher on the current item. I, of course, sought the help of our IT guru in the US who had originally ordered the equipment. It turned out that his main contact who had helped with the order was also no longer employed at Dell. After 2-3 days of bouncing around within Dell, we were finally able to get the original file that contained the original SKU, catalog number and description. And that somehow brought a smile to the customs agents’ face, and after a 23.2% duty, he released the item precisely six weeks after the customs department received it.
Bottom line: India truly is about customs and sooner one understands them, the better off one will be. By the way, I have gotten my four year old the book titled “Indian customs agents for dummies” which he has me read to him every night before going to bed.


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India is All About Customs…

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