How to Import Goods from China to India

source: IndiaMART

In 2020, India imported goods worth $58.71 billion from China. This makes China India’s top import partner. Major Chinese imports included consumer electronics, telecom instruments, computer hardware and peripherals, electrical equipment, fertilizers and chemicals. India continues to import from China despite Covid-19, escalating border tensions with Beijing and growing fears that it will be flooded with cheap Chinese goods. The last was among the reasons cited by India for its decision to sit out of the Regional Comprehensive Economic Partnership (RCEP), the largest free trade agreement in history. India’s dependence on Chinese goods stems largely from its inability to close the gap between domestic production and demand, and from China’s dominance as a manufacturing and exporting nation.

The Indian e-commerce sector has been growing at an exponential rate in recent years, leading to several online sellers importing Goods from China. Since China is a large-scale manufacturer of a wide variety of goods, buying from China is an economically viable option for many. However, there are several terms and conditions that businesses have to meet to import goods from China. In case you are wondering about how to import goods from China, then read on to learn more about the process and what the best products to import from China are.

First of all, we have to understand about the legal guidelines which are required to start an Import Export Business in India or required to Import Goods from China.

Legal License Required to Import Goods from China

1. Register your Legal Entity in India –

For the Starting any type of business you have to register a Legal Entity in India. Legal Entity is required for any type of business even if you are not doing the Import Export Business in India. For the Exporting Business you have to incorporate a legal entity on your brand name or firm name or Company Name. There are 5 types of legal entity which you can register –

a) Sole Proprietorship Firm

b) Partnership Firm

c) Limited Liability Partnership

d) Private Limited Company

e) One Person Company

2. Apply for the Tax Registration –

After the Incorporation you have to apply for the Tax Registration on your Goods. Mostly its required VAT/CST Registration from your state government. it’s also called TIN Number, even if you not import the goods from China then also its required to sell in India. In Some State its required Security Deposit Concept and Surety Concept so it little bit expensive license.

3. Apply for the IEC Code Registration –

After the applying VAT/CST Registration for the Import or Export Goods in India you need specially one license from the DGFT Department i.e is called IEC Code. its also required a Current bank account on your Company name which is possible only after the Incorporation of your legal entity in India. DGFT Procedure is Now Online but you have to required Digital Signature for the apply New Online IEC Code so you can save the Expense during the Incorporation.

Now Let’s talk about the Option which is available for Import the Goods from China to India. One of the best ways to import the goods from China i.e., is Online through Alibaba or AliExpress or you can use some other third party’s agent which can do this on your behalf as Commission Basis.

So, Let’s understand about How you can Import the Goods from China through Online Websites or Agents.

How to Import Goods from China to India Online

There are 4 Important steps to be consider during the Import the Goods from China to India Completely Online.

a) Find the Products Online Which are hot in Demand –

You have to find the Products Online on the Chinese Online Shopping Website which are hot in Demand in your Country. There is multiple website which are providing shipping in India. In that the Leader is Alibaba. As per Wikipedia in 2012, two of Alibaba’s portals handled 1.1 trillion yuan ($170 billion) in sales. So, it is one the biggest Online Supplier in the World and it is the world’s largest retailer as of April 2016. So, if you already decided the product then you have to find the relevant information about the products on various listing website apart from Alibaba like Amazon China, eBay China etc.

b) Find a Good Manufacturer or Supplier on the Alibaba or Other Websites-

After the finding a Good Products you have to find a good Supplier also on the Ecommerce Websites. On the Alibaba India you can find the Gold Supplier tag. You can contact any buyer for cost of the product and various kinds of details about the product. If you want to buy product then you can negotiate with the supplier. Supplier quotes you the price according to its quantity. If you can convince supplier to large order in future, you can get samples at very cheap price.

It is suggested to ask for sample product to check the quality, buyer can send you the product sample by courier. Check the sample and then decide about your products. If you are lucky then you can find the same supplier registered on AliExpress (But not all, only a small percentage). It is easier to get samples from AliExpress.

So, there is Alibaba and AliExpress in India which can helps you to Import the Goods from China to India Online. Apart from Alibaba or AliExpress, you can find hktdc, cantonfair and globalsources & made in china which are some helpful websites.

c) Understanding about the Law and Regulations between the Country –

You have to Understand about the Law and Regulations between the India and China for the Trading. There are lot of Chinese products which are banned in India.

Certain items are prohibited and restricted for import in India from any country. Some of the prohibited items include articles of apparel and clothing accessories of wild animals covered under Wild Life Protection Act -1972, mobile handsets without International Mobile Equipment Identity (IMEI) number or with all zeroes IMEI, narcotic drugs, counterfeit and pirated goods.

You can read here about the Restricted and Banned Chinese Products in India on official DGFT Website.

d) Hire a Custom Clearing Agent and Freight Forwarder-

A freight forwarder or forwarding agent is also known as a NVOCC (non-vessel operating common carrier), is a person or company that manage and organizes point to point shipments for individuals or corporations to import goods from the manufacturer abroad to your location.

For the Custom Duty you can hire many Customs Agents for the Clearance if you don’t have knowledge about the Documentation part like Bill of Entry etc. You can Calculate the Customs duty through this official govt custom duty calculator

What are the best products to import from China?

Let us now take a look at what the best products to import from China are, and which service to use to procure them. Choosing the right products to import will decide the fate of your business, as your products define your company and brand. Therefore, make sure you select products you are proud of, and genuinely think will sell well in India. Some of the most popular and best products to import from China are;

1. Clothes and Textiles

2. Motor Vehicles, accessories and spare parts

3. Electronics

4. Smartphone components

5. Smart TVs

6. Pharmaceutical Products

7. Plastics

8. Heavy machinery

9. Organic fertilizers

10. Consumer products

Tips on Importing Goods from China

1. Always expect delays and factor them into your timeline to avoid losing clients. Make a timeline or schedule that accounts for such delays to ensure that the entire process occurs smoothly.

2. Make sure you choose a trustworthy and credibly freight forwarder partner. Rather than going for the cheapest option available, go for a service provider who guarantees smooth operations at economical prices.

3. Keep tracking your cargo and make the necessary arrangements for its arrival well before time to prevent delays and mishaps.

4. To maintain all the required documents to ensure that you can file the compliance norms on time. Some of the documents you will need include;

· List of items being imported

· DGFT Approval and EIC Code

· Official invoice from the supplier

· Packing list / Arrival notice

· Bill of Entry

· Bill of lading/ Airway Bill

· Certificate of Origin

· Letter of Credit

· Bill of Exchange

5. Always ask for clarifications if you do not understand something about the shipment. Never assume anything regarding a product’s availability, quality, or condition. Always call and confirm so that you know exactly what you expect at all times. Similarly, make sure you are very specific when talking to suppliers regarding products so that you both are always on the same page.

BIS and its role in imports

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The Bureau of Indian Standards (BIS) is India’s national standards body, tasked with maintaining the quality and safety of products meant for consumption in the country. It applies to products produced domestically as well as imports. It has three key functions: a) to set uniform Indian Standards of quality for manufactured and agricultural goods, b) to test products, and c) to authorise the use of the Standard Mark – better known as the ISI (Indian Standards Institute) Mark – to indicate that a product complies with BIS standards. The bureau allows use of the ISI Mark under its product certification schemes. While certification is largely voluntary, some product categories require mandatory certification. In the case of imports, these products come under two certification schemes:

1. Compulsory Registration Scheme (CRS): It covers all electronic and information technology products (mobiles, laptops, smart watches, bluetooth speakers, televisions, LED lights, etc). It is mandatory for an importer sourcing a CRS product from China (or any other country) to register that product with BIS. Certification is granted to the manufacturer of the goods and not the importer. The importer may, however, act as the Chinese manufacturer’s representative in India and apply for the certificate on their behalf. Check out the full list of CRS products here.

2. Foreign Manufacturers Certification Scheme (FMCS): Several product categories require a mandatory ISI mark to be sold in India. These include cement, batteries, car tyres, medical equipment (X-ray machines), iron and steel products, chemicals, fertilisers, toys and food items (milk powder, packaged water, baby formula, etc). Importers of such products can register them with BIS under the Foreign Manufacturers Certification Scheme. Manufacturers with factories located outside India are eligible for a licence under this scheme provided they ensure compliance with BIS quality standards and have the required manufacturing infrastructure, production process, quality control and testing capabilities at their premises. Click here for the full list of mandatory certification FMCS products. Importers can also apply for voluntary certification for other products under this scheme.

3. SCOMET products: Additionally, BIS registration is mandatory for the import of SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) items listed in Appendix 3 of Schedule I (Imports) of the ITC (HS) Classification, which is India’s system of classifying goods for import/export. The SCOMET list includes controlled substances such as nuclear material, toxins and electronics. These might also come under CRS or FMCS. For mandatory registration, SCOMET products must meet the following conditions:

• They must be for captive consumption (defined as the consumption of goods manufactured by one division by another division of the same/related organisation to manufacture another product)

• They must be required on a continuous basis

• They must be procured from pre-identified sources

How to apply for BIS certification

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1. Under Compulsory Registration Scheme

• Import product samples (maximum of five allowed) for testing

• Register as Authorised Indian Representative (AIR), as per BIS guidelines, if manufacturer is located outside India

• Register on BIS portal (www.crsbis.in/BIS), where you will be required to provide proof of manufacturer’s name and address

• Generate test request, submit details of sample and select a recognised BIS laboratory online

• Submit sample at selected laboratory

• Submit relevant form for grant of license with supporting documents (more on this later) and test reports. Test reports must not be older than 90 days from the date of receipt of online application

• BIS inspectors will travel to manufacturer’s country to inspect their factory, at applicant’s expense. They might authorize additional monitoring by an independent inspector

• License is usually granted within 20 working days if documents are in order, compliance with BIS standards is established and fee paid. A unique registration number is issued, which the applicant can attach on their product. Licence is valid for two years and can be renewed

• In case of a problem with the application, importer will receive a rejection notice with 30 days to resolve the problem

2. Under Foreign Manufacturers Certification Scheme

• The procedure for grant of licence under FMCS is the same as under CRS, with one exception – the applicant must submit the relevant application form in person at the BIS headquarters in Delhi, along with the supporting documents and fees. The scheme currently has no online application facility.

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Documents required for BIS registration

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• Proof of submission of application

• Relevant application form

• Proof of address (business license, other government-issued documents)

• Proof of brand name (brand registration certificate, trademark application copy, authorization letter from brand owner, etc)

• Application signed by or authorization letter from manufacturing unit CEO

• Affidavit and undertaking by Authorized Indian Representative if manufacturer is located overseas

• Test report

• Undertaking for test report

• Bill of entry with commercial invoice, packing list, insurance cover note, bill of lading and country of origin certificate

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Customs documents for imports from China

‍These are the most common documents (mandatory and secondary) you will need to prepare:

• Bill of Lading/Air Waybill

• Commercial Invoice cum Packing List

• Proforma Invoice

• Purchase Order

• Letter of Credit

• Insurance Certificate

• Health Certificate (for food products)

• Country of Origin Certificate

Customs duties for imports from China to India

‍The average shipping time from China to India is 20 days by sea. By some accounts, a shipping line has at least one vessel leaving China and arriving at an Indian port daily. So, how much does it cost to get a shipment past Indian customs?

For ocean shipments, import duty is calculated on the basis of the product’s CIF (cost, insurance, freight) value and has three components:

• Basic Customs Duty (BCD) – Rate varies from product to product. The government can choose to exempt certain goods from this duty or reduce the rate of duty on others

• Integrated Goods and Services Tax (IGST) and GST Compensation Cess – IGST is the sum total of Central GST and State GST. GST compensation cess compensates states for any losses arising from the implementation of GST

• Social Welfare Surcharge (SWS) – Levied at a rate of 10% of the aggregate of duties, taxes and cess collected under the Customs Act,1962

Additionally, your shipment from China might incur other duties, such as:

• Anti-dumping Duty (ADD) – Levied on imports priced below domestic market price. India charges ADD on Chinese bottle-grade PET resin (used to make soft drink bottles) and some steel products

• Countervailing Duty (CVD) – Imposed to protect domestic producers from subsidized imports, it is equivalent to central excise duty on similar goods produced in India

• Safeguard Duty – A safeguard against potential damage to domestic producers due to a surge in imports. The import of solar cells from China (and other countries) invites a 14.5% safeguard duty

• Protective Duty – Another duty that seeks to protect domestic producers

• Education Cess – Levied at a rate of 1%-2% of the aggregate of customs duties

• Handling Charges – Charged for the handling, loading and unloading of goods

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What should go on your label?

‍All foreign goods coming into India must follow strict labelling standards, which might be different from international norms. Failure to comply might result in customs detaining or rejecting your shipment.

In 2018, China was India’s sixth largest foreign supplier of food products. These are the labelling requirements for imported packaged food:

• Product name (common or generic)

• Ingredients, in descending order of composition by weight or volume

• Net weight, number or volume of contents

• Batch/Lot/Code number

• Month and year of manufacture, packaging, expiry

• Maximum retail price

• Name and address of manufacturer, importer, packer

• Country of origin, name and address of importer, packaging/bottling unit details (if product is manufactured abroad but packaged/bottled in India)

• Indication of vegetarian/non-vegetarian product with logo (green for vegetarian, brown for non-vegetarian)

• Food Safety and Standard Authority of India (FSSAI) logo with FSSAI license number

• Presence of colouring agent (if present)

Additionally, the FSSAI has strict standards for the design and lettering of labels:

• Product information must be prominent, legible, clear and in English or Hindi

• Colours of the letters and the label’s background must contrast

• Height of letters must not be less than 1 mm, width not less than one-third of height

• Misleading statements and pictorials about the product’s nature, origin and composition aren’t allowed

• Statements implying recommendations by medical professionals are not allowed

For non-food imports, the labelling requirements are:

• Name of product

• Net quantity

• Month and year of manufacture, packaging and import

• Maximum retail price

• Name and address of importer

Environmental responsibility

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In an increasingly ecologically-conscious world, environmental responsibilities go hand in hand with importing. India has the Electronic Wastes (Management and Handling) Rules, which spell out the responsibilities of importers of electrical and electronic equipment. It aims to prevent risks to human life and the environment from the improper management of e-waste. The e-Waste Rules combine the best practices of two European laws, the Restriction of Hazardous Substances (RoHS) Directive and the Waste from Electrical and Electronic Equipment (WEEE) Directive.

• ROHS Directive – It restricts the use of 10 hazardous substances – lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls, polybrominated diphenyl ether, bis(2-ethylhexyl) phthalate, butyl benzyl phthalate, dibutyl phthalate and diisobutyl phthalate – in the manufacture of electronic and electrical equipment beyond a prescribed limit. Only a few products, for which there are no known alternatives to the banned substances, are exempt. Like India, many other countries have their own version of the ROHS Directive. India’s e-Waste Rules call for reduced use of hazardous substances as per the ROHS Directive.

• WEEE Directive – It seeks to prevent the creation of electrical and electronic waste. Where such waste is created, it sets rules for their effective recycling, recovery and re-use.

Under India’s e-Waste Rules, the import of electronic and electrical equipment is allowed only with the authorization of the State Pollution Control Board. The rules also set targets for e-waste collection – 30% of projected sales on a self-determined basis by 2018 and 70% by 2023. Failure to comply would result in fines. Most importantly, the rules spell out the responsibilities of an importer. (While the rules don’t directly refer to importers, they come under the ambit of “producers”, as specified in the rules). Importer responsibilities include:

• Collecting e-waste generated during manufacture or at the end of the life of the product, and ensuring their disposal or recycling through authorized collection agencies and registered recyclers and dismantlers

• Setting up collection centers and providing consumers with their contact details

• Publishing ads, posters and booklets about hazardous content in products, information on how to handle them and the consequences of improper handling

• Keeping a record of the e-waste handled and making it available to the State Pollution Control Board

‍ECO Mark Scheme

While not a compliance requirement, the BIS has a scheme for the certification and labelling of environment-friendly goods, which includes electronics and electrical products and extends to food items, plastics, textiles, leather, paints and cosmetics among others. Products that meet the relevant BIS quality requirements along with certain environmental criteria are eligible to carry the ECO Mark in combination with the ISI Mark for a set period.