Export-import tussle by Customs leaves veggies worth ₹8 lakh rotting in Calicut airport

Malappuram: An unusual Customs procedure that treated a returned export consignment of perishable vegetables as imported goods has left Kerala exporters counting heavy losses and demanding an urgent change in Central government regulations to prevent similar incidents in future.

The demand comes after a consignment of fresh vegetables worth around ₹8 lakh rotted at the Calicut International Airport cargo terminal after an Air India Express flight bound for Bahrain returned to Kerala amid the recent West Asia crisis. Exporters say the incident exposed a serious procedural gap, as Customs authorities insisted on treating the returned export cargo as an import instead of allowing it to be re-exported.

The Air India Express flight, carrying about 150 passengers and nearly 3,000 tonnes of fresh vegetables belonging to four Kerala exporters, departed from Calicut for Bahrain on July 20. Owing to the conflict in West Asia, the aircraft was diverted to Riyadh for refuelling and eventually returned to Calicut.

While the passengers were later flown to Bahrain on another Air India Express flight from Calicut, the export cargo remained stranded at the airport.

According to exporters, Customs authorities at Calicut treated the returned consignment as imported goods and demanded import-related documentation, including a Bill of Entry, a document applicable only for imported goods. They argue that the vegetables, which had never entered the destination market, should have been allowed to be unloaded and re-exported without being subjected to import procedures.

Although authorities at the Karipur Air Cargo Complex intervened to resolve the confusion, exporters allege that Customs delayed releasing the cargo. By the time the vegetables were finally released on Wednesday, they had remained inside the cargo terminal for several days, exceeded their shelf life and become unfit for consumption, forcing the owners to destroy the entire consignment.

"The vegetables have only a three-day shelf life even when kept under refrigerated conditions. The flight left for Bahrain on Monday morning and returned to Calicut on Monday night. The passengers disembarked at Calicut and were later flown to Bahrain on another flight. But the Customs authorities did not allow the items to be re-exported and instead wanted to treat them as imported goods. They even demanded the Bill of Entry, which is applicable only for imports from other countries. As the demand was surprising, the KSI authorities, who are the custodians of the cargo complex, intervened and sought release of the products valued at around ₹8 lakh. But Customs did not permit their release. Finally, the products were released only on Wednesday, by which time they had become unusable, forcing the owners to destroy the entire consignment," said Munshid Ali, General Secretary of the Kerala Exporters' Forum.

The Kerala Exporters' Forum has urged the Central government to amend Customs regulations so that export consignments returning to Indian airports due to emergencies can be unloaded, stored and re-exported without being treated as imports. The Forum pointed to a recent policy introduced at Mumbai seaport as a model that could be extended to airports.

"In cases where export consignments are returned, re-export should be allowed on the lines of the procedures introduced at Mumbai seaport after ships returned with consignments following the closure of the Strait of Hormuz. If exporters are forced to destroy such consignments, the government should provide compensation for the losses," Munshid Ali said, adding that Calicut airport also lacks adequate infrastructure to preserve perishable cargo for extended periods.

The demand gains significance in the light of a recent circular issued by the Department of Revenue under the Ministry of Finance through the Central Board of Indirect Taxes and Customs (CBIC). The circular permits jurisdictional Principal Commissioners or Commissioners of Customs to allow temporary unloading and storage of export cargo at Customs-approved bonded warehouses when vessels carrying cargo to foreign destinations are compelled to return to Indian ports because of maritime security concerns, disruption of international shipping routes or other logistical exigencies. The cargo can subsequently be re-exported through international transhipment.

Kerala exporters are now demanding that a similar provision be introduced for cargo returning through airports.

The issue also comes against the backdrop of the Union government's recently announced Resilient and Logistics Intervention for Export Facilitation (RELIEF) initiative under the Export Promotion Mission (EPM), introduced in response to the geopolitical situation in West Asia.

However, the Kerala Exporters' Forum has alleged that the notification largely benefits exporters covered by the Export Credit Guarantee Corporation (ECGC), excluding a significant number of vulnerable exporters. The Forum has demanded that the relief measures be extended until a permanent resolution of the West Asia crisis.

The Malabar Chamber of Commerce has also approached the Centre seeking wider relief for exporters affected by the regional conflict.

"A vast volume of Kerala's agricultural, footwear, spice and handicraft products are aggregated and exported by Merchant Exporters who purchase directly from grassroots MSME units. Excluding them breaks the crucial liquidity chain for small-scale local manufacturers. We request the extension of benefits to these Merchant Exporters. Given the highly unpredictable geopolitical situation in the Gulf shipping lanes, we request that the eligible period for the On-Board Bill of Lading or Air Waybill (AWB) be extended from 2026 until the permanent and safe reopening of the Strait of Hormuz. We also request that relief benefits be extended to shipments protected under non-ECGC, private or alternative certified export credit insurance channels," said Nityanand Kamath, President of the Malabar Chamber of Commerce.