Importing from China to India: A Complete Guide
India is a rapidly developing country but also the fastest growing market for China portal. In terms of visitors on Chinaimportal.com, India is the only second to the United States. Thus, we decided it was about time to dedicate our weekly article to our Indian readers out there, and of course to everyone else with an interest in importing from China to India.
What makes importing to India different?
India is, by all means, a developing country. However, its product regulations and labelling requirements are fairly well established. Then there’s the bureaucracy, that makes confirming applicable product safety standards, labelling requirements and getting the cargo through customs rather complicated. But, that’s about as far as the differences go, as compared to other countries.
BIS Product Certification Scheme
BIS (Bureau of Indian Standards) has developed thousands of different product standards, applicable to a wide range of products. Electronics, textiles and machinery are all covered by the BIS Product Certification Scheme.
While BIS certification is not mandatory for all products, buyers of the following products need to ensure compliance with at least one applicable standard:
- Household Electrical Goods
- Food & related products
- Diesel Engines
- Oil Pressure Stoves
- Automobiles Accessories
- Steel Cylinders, Valves and Regulators
- Medical Equipment
- Steel Products
Keep in mind that this list is subject to change, and may be outdated by the time you read this! Indian based importers must confirm if their product is applicable to mandatory BIS certification before ordering from a Chinese supplier.
BIS certification is not a uniform standard or directive that applies to all products. Instead, products are regulated by a specific IS (Indian Standard). That’s also what you can see in the sample table above (source: Bis.org.in).
As of today, there are 18,773 IS standards, some of which are under revision. That said, there are both mandatory and non-mandatory Indian Standards (IS). You may still decide to ensure compliance with applicable Indian Standards (IS), even if it’s not legally required.
IS standards regulate various aspects of different products, including substances, heavy metals, electrical safety, currents, voltage and metallurgy. The specific Indian Standard (IS) requirements for your product can be purchased from the BIS website.
Similar to the CE mark in Europe, the ISI mark is printed on products compliant with the applicable IS standard. Thus, it’s part of the scope of IS regulations, and not a separate product directive.
Most IS regulated items may carry the ISI mark, but non-compliant items (even those where IS compliance is not mandatory) shall not carry the ISI mark. Thus, you need to secure IS compliance before you send your ISI logo files to your Chinese manufacturer.
How BIS regulations apply to Indian importers
BIS was initially intended to regulate products manufactured in India. Thus, many government websites tend to refer to the manufacturer as the party responsible to ensure IS compliance. However, that doesn’t apply to foreign manufacturers (e.g. Chinese).
When you, as an Indian importer, bring in items from abroad, you are responsible to ensure compliance with the applicable IS standard – not the Chinese supplier.
In order to obtain BIS certification, the importer must submit component and material samples for pre-production certification to a BIS accredited laboratory. In some cases, the sample testing is also followed up by an inspection, executed by BIS offers, in the Chinese manufacturer’s production facility. All travelling expenses shall be covered by the importer.
If your product, and the original manufacturer, pass the tests, you’ll obtain a BIS certificate. If the product testing and inspection fail, you don’t get it. But it doesn’t end here. Additional testing and factory inspections may be required if requested by BIS.
Securing compliance with Indian Standards (IS) when buying from China
Most Chinese manufacturers have never heard of BIS, Indian Standards (IS) or the ISI mark. Compliance with a certain standard requires that the supplier has access to relevant IS files, outlining the technical specifications the product must meet in order to obtain certification.
However, not all suppliers are capable, or even willing, to comply with IS technical specifications. If Indian Standard (IS) compliance is mandatory for your product, you better source suppliers that can show previous compliance. Otherwise, you might end up in an endless product development process leading nowhere. That said, the Chinese manufacturer’s advertising IS compliance are few and far in between. Compliance with European and American product standards are far more common.
In case you cannot find IS compliant suppliers in your industry, you should at least look for suppliers, advertising EU or US compliance, as this group of suppliers is more likely to possess the technical skills required to ensure IS compliance. Most Chinese suppliers don’t follow any product standards or directives, domestic or foreign. Buying from this group of suppliers is a gamble, as they may not even be able to ensure compliance.
India RoHS and WEEE
Starting in 2012, India adopted regulations modelled on the European Union RoHS (Restriction of Hazardous Substances) and WEEE (Waste Electrical and Electronic Equipment) directives. RoHS regulates heavy metals in electronics, including lead and cadmium, while the WEEE directive requires manufacturers and importers of electronics to pay a yearly fee covering the collection and recycling of E-waste.
While these regulations are aimed at electronics manufacturers in India, many of which are already compliant with the European Union versions of these directives, importers are also required to ensure compliance. In 2012, electronics suppliers were given two years to comply. Thus, the directives are supposed to be fully implemented by manufacturers and importers alike, starting in May this year. Click here for a RoHS and WEEE comparison between India and Europe.
These regulations are among the most sophisticated product directives implemented by a developing nation and are certain to have a major impact on the electronics industry in the following years. That said, it’s positive that there’s at least some sort of coordination between regulators of major markets, in this case, the EU and India, which makes it easier for importers and manufacturers to ensure compliance. Conflicting product standards that serve as trade barriers, rather than maintaining a certain quality and environmental standard, is the last thing we need.
Indian importers must comply with a rather stringent marking and labelling requirements. Indian importers failing to comply may have their cargo seized by customs authorities and relabeling exporting cartons and product packages is only possible if such a request is granted. If not, you may find yourself in a world of trouble. So, let’s look into these labelling requirements. Below follows a list of items that you must include:
- Product name and description
- Net weight
- Date of Manufacture
- Your address
- Maximum retail price (MRT), including taxes
- Batch ID
- Month and year the product was imported
- Country of Origin
Keep in mind that these requirements are subject to change, and certain products, such as food, require additional information (e.g. net weight and expiry date). There are also language requirements. Labels must be written in Hindi (Devanagari script), or in English. Indian labelling requirements are not only limited the packaging. Certain types of products must be labelled with the sizes and Country of Origin (e.g. Made in China) on the items themselves.
The Bill of Entry (BoE), which shall not be confused with the Bill of Lading, is the most important document when importing from China to India. The Bill of Entry specifies the type of items and their value. However, the Bill of Entry must not always be filed by the importer. Instead, a Bill of Entry can be automatically generated upon arrival – but only in ports connected to the EDI (Electronic Data Interchange) system. Either way, you need to prepare the following support documents before your cargo arrives:
- Bill of Lading (Sea Freight) or Air Waybill (Air Freight)
- Commercial Invoice
- Packing List
- Proforma Invoice
- Purchase Order or Letter of Credit
- Industrial license (if required)
- Import license (if required)
- Product test reports (if regulated by any Indian Standard)
- Insurance Policy / Note
- Product Description / Catalog
- GATT & DGFT Declarations
- Health / Food Safety Certificate (only for food products)
- Certificate of Origin (if applying for reduced duty rate)
That’s a lot of paperwork, and in some cases, additional documents may be required. But there’s help to get. Indian importers are not required to submit the documents themselves, they can do so through a licensed customs agent.
The main risk lies in a lack of coordination between the supplier, their freight forwarder and the receiving customs agent in India. Most shipping companies that don’t have a presence in India, are quite likely to unaware of the spectacular amount of papers importers need to submit. Thus, I advise Indian importers to work with local shipping companies, that have extensive knowledge about local customs regulations. Visit this page, if you want to read more about customs documents in India.
Indian import duties and customs value
As in most countries, taxes and import duties are paid upon arrival in the Port of Destination.
The average duties in India are around 12%, which is almost double compared to the average import duties in the United States and the European Union. However, that’s to be expected from a developing country.
The import duties, and other taxes are calculated based on the CIF price. CIF, an abbreviation for Cost, Freight and Insurance, is an international shipping incoterm. Incoterms specify the when cargoes shall be transferred from the supplier to the importer. However, as we’ve already covered Incoterms in a previous article, I won’t go further into the topic.
CIF includes the value of the products, shipping and insurance. Thus, the import duties are calculated as a percentage of the CIF price. Considering the spectacular amount of documents the Indian customs require to support the declared value, you better make sure you get it right from the beginning.
Many Chinese manufacturers assume that only the FOB (Free on Board) price should be declared on the Commercial Invoice. But, that’s because the United States tax for importers is based on the FOB price. Before they ship the cargo, make sure that all documents are matching or you could face serious delays in the Port of Destination.
Other fees and taxes
Indian importers must also be aware of additional taxes levied on imports from China, and elsewhere. Among these are Landing charges, Countervailing duty (CVD), CESS and CVD – all ranging from 1 to 12%. However, different taxes apply to different types of products. Before you order from your Chinese supplier, make sure to confirm which taxes and rates apply to your imports. You can also read more about import duties, taxes and customs regulations on the official website of the Indian Customs Authorities.