When Every Clearance Needs a Clearance: Inside India’s Broken Import System
India’s push for cleaner imports has collided with its patchy bureaucracy — and small traders are paying the price.
The Gist
India's customs process faces criticism for unclear environmental mandates affecting small traders.
- Wintrack's shipment delays highlight a broader issue of bureaucratic confusion at Indian ports.
- Recent enforcement of Extended Producer Responsibility (EPR) compliance has caught many importers off guard.
- Experts call for clearer regulations and a single-window portal to streamline the customs process.
When a 40-foot container of battery-powered body massagers reached Chennai port on August 12, the importer expected it to be out in two days. Instead, the shipment worth about $23,000 is still sitting there.
By October, Wintrack Inc. had had enough. The company announced on X (formerly Twitter) that it was shutting down its import and export business in India altogether, alleging harassment by customs officials and a 45-day clearance delay.
“We’ve been importing body massagers from China since January, but this is the first time a shipment has been stuck this long,” said Prawin Ganesha, Wintrack’s founder. “Officers even asked for bribes to release our goods.”
What changed? Not the product. The paperwork.
Customs suddenly demanded an Extended Producer Responsibility (EPR) certificate — a relatively new environmental compliance meant to make producers and importers responsible for the waste their products create.
EPR was introduced in 2016 under India’s Plastic Waste Management Rules, making producers and importers responsible for waste collection and recycling. Its scope later expanded to e-waste and batteries (2022), and customs began enforcing EPR compliance for imports only recently, around 2023–24.
Wintrack applied to the Central Pollution Control Board (CPCB), but until the certificate arrives, all new shipments are on hold. “We can’t afford to have more containers locked up at the port,” Prawin said.
One stuck consignment might sound like bad luck. It isn’t. It’s part of a larger mess brewing at Indian ports. Unclear environmental mandates, inconsistent interpretations and discretionary enforcement are turning routine imports into month-long battles.
The EPR Twist
EPR is well-intentioned. It makes companies responsible for recycling or safely disposing of the products they sell. India’s latest rules cover e-waste, plastics, and batteries, and the CPCB has even launched portals to manage registrations.
However, if your paperwork isn’t perfect, your shipment can sit indefinitely while approvals crawl through CPCB channels.
Small traders are the worst hit. Many who once qualified as MSMEs — and were exempt from such obligations — now find themselves reclassified as “larger importers” simply because their shipment volumes grew.
“Earlier, we were exempt. Now, customs says our volume is too big for MSME and demands EPR,” said Prawin.
Each such surprise costs not just demurrage but business continuity. As one industry survey found, inconsistent rule interpretation is among the biggest sources of delay for SMEs, often more damaging than the actual taxes or duties they pay.
A Digital System With Human Friction
On paper, India’s customs process is sleek and digital. Bills of entry are filed via the Indian Customs Electronic Data Gateway (ICEGATE), India's national electronic portal for all customs-related services, routed through the Risk Management System (RMS) or faceless assessment.
In theory, clearance takes a day or two.
In reality, “faceless” can mean endless. Importers often don’t know which officer is handling their file, what stage it’s in, or when they’ll hear back.
For Wintrack, the system didn’t fail because of wrong classification codes or missing invoices. It failed because a rule that was never enforced before suddenly became non-negotiable.
“There aren’t separate clearance rules for battery or non-battery products,” Prawin explained. “Only additional compliances, if needed.”
That “if needed” is where interpretation — and discretion.
“There’s a serious lack of alignment between departments. I won’t blame customs alone. The confusion exists on both sides, among officers and in the industry,” Ravi Jha, a customs lawyer and expert, told The Core.
The result is a perfect bureaucratic mess. Importers unsure of which rule applies, customs officers trying to interpret multiple legislations at once, and shipments getting stuck for weeks over paperwork that was never meant to apply in the first place.
When Rules Collide
The EPR confusion isn’t an isolated glitch. Aravind Ganesha, an EXIM consultant, recalls a similar fiasco: a diagnostic kit for detecting prawn infections imported from Thailand. It could spot disease in minutes — a major upgrade over two-day lab tests.
But when it landed in Chennai, customs flagged it as a “medical device” and demanded a Central Drugs Standard Control Organisation (CDSCO) licence.
“The importer had to fly down from Hyderabad to prove it wasn’t medical equipment. After a week and some polite ‘requests’ for extra payment, it was cleared only after senior officials intervened,” Aravind told The Core.
By then, the importer had lost Rs 40–50 lakh in penalties, storage fees, and missed sales.
The Rulebook Maze
According to Jha, one of the biggest pain points for importers isn’t the lack of rules, but there are too many overlapping ones.
“People think customs make the rules, but that’s not true. The EXIM policy, the backbone of how exports and imports work, is made by the DGFT (Directorate General of Foreign Trade). Customs only enforces it,” he said.
That means all those HSN codes, a globally recognised, 6-digit (or more) code used to classify goods for customs, taxation, and trade purposes and tariff classifications that importers have to navigate are decided by DGFT. Customs just apply them.
“But there’s a twist — the Customs Act also gives officers the power (and duty) to enforce other laws like those from the Bureau of Indian Standards (BIS) or the Central Pollution Control Board (CPCB),” Jha said.
That’s where the confusion begins.
Take something as basic as a battery. If an importer brings in a standalone shipment of batteries, it’s clear what’s required — BIS registration, labelling and packing compliance under the Legal Metrology Act, and an Extended Producer Responsibility (EPR) licence under CPCB rules for e-waste.
“The real problem starts when you import products that have batteries inside them — like a table lamp, a toy, or a musical instrument. Customs often asks for a separate EPR or BIS licence for the battery inside that product,” Jha said.
He finds that logic flawed. “Why would a table lamp manufacturer sitting overseas know that India needs a separate licence for a tiny inbuilt battery? It should be the battery manufacturer’s job, not the product assembler’s.”
This, Jha said, is where the legal contradictions start piling up.
“BIS law, for example, is voluntary by nature. But once a product falls under a mandatory quality control order, all its parts must also conform to BIS standards. That sounds logical — but not everyone knows it, not even customs officers sometimes,” Jha added.
And sometimes, the same law contradicts itself. “One ministry’s quality control order may say that a particular component is exempt if it’s part of a larger product. But customs may still ask for BIS on that same component when it’s imported.”
In other words, the law may be clear — but it’s not consistent.
“The government needs to step in with clear clarifications. Until that happens, both sides will continue to play a guessing game,” Jha said.
The Systemic Snags
Across cases, three fault lines appear again and again:
- Rules that evolve faster than traders can track: Notifications change weekly, but few MSMEs have the time or teams to keep up.
- Discretion in a supposedly ‘faceless’ system: Officers can still flag manual remarks that derail automated clearance.
- Environmental rules without operational clarity: EPR thresholds, timelines, and exemptions remain murky, and approvals take weeks.
The government’s intent — cleaner trade and accountability — is sound. But its execution hasn’t caught up with the reality of small importers navigating an already complex system.
What Could Fix It
Importers and experts broadly agree on what would help:
- A live single-window portal showing, by HSN code, the exact certificates needed before filing.
- Transparency in faceless assessment: clear timelines, escalation paths, and tracking visibility.
- Defined EPR thresholds so MSMEs aren’t caught off guard.
- Regular awareness sessions for CHAs and traders to prevent preventable delays.
The Bigger Picture
Chennai is just one port. But ask around — Mundra, Nhava Sheva, and the stories sound familiar, importers blindsided by new EPR requirements. Customs officers are unsure which ministry’s rule takes precedence. Shipments frozen for weeks while compliance portals catch up.
It’s not corruption that’s killing confidence; it’s confusion. When environmental mandates, trade policy, and customs enforcement move at different speeds, small traders are left stranded in the gap.
India wants to be a manufacturing and logistics hub. But that promise can’t sail if containers keep getting stuck in bureaucratic crosswinds.
