Imports in India: The what and how of it
India is a huge market and the consumption story has just begun. With globalisation the barriers in terms of consumption have been blurring and we have goods from across the world available to us at our doorstep. The process through which goods from a foreign country can be made available to us is known as an Import.
Imports is defined as the process of getting goods from outside the country into the country.
Let’s understand some of terms relevant to imports:
1. Shipper: Person selling the goods
2. Consignee: Person importing the goods in India
3. INCOTERM (International Commerce Terms): This signifies what all is covered in the cost being charged by the shipper.
EXW (Exworks) means that the goods need to be collected from the shipper’s factory. All cost that is incurred from the factory is to be paid by the consignee.
FOB (Free on board) means that the shipper will take care of the customs clearance and onboard the shipment to the ship/airline. The freight and the charges thereafter need to be paid by the consignee.
CIF (Cost Insurance Freight) : Shipper takes care of the Insurance and Freight upto the destination Port.
There are many more terms that can be found by googling the same. FOB and CIF are the most frequently used Incoterms.
4. HS Code (Harmonised System Code): This is a code used universally so that it is easier to understand what products are being imported. For example, Plastic Acrylic Sheet will be classified under 39205111 whereas Speakers may be classified as 85183000. The shipper is typically the best person to provide the HS Code for the goods. However, it’s a good idea to get the same verified with a qualified professional.
5. Freight forwarder: This is an entity who helps in getting the freight and to move the goods to the destination port. Freight Forwarding is done through various modes such as sea, air & road.
6. Customs Broker: This is an entity who helps in clearing the goods. A Customs Broker may be required at both the port of shipment and the port of destination.
Documentation needed for Import:
An IEC (Import-Export Code) issued from DGFT (Director General of Foreign Trade). Due to recent changes, the PAN Number of the company doubles up as the IEC number. However, one still needs to apply and get the IEC certificate.
Invoice: This has the commercial terms like the Name of the seller, name of the buyer, description of the goods, price of the goods, quantity, INCOTERM etc.
Packing List: This has the details about how the goods are packed. The number of bags, cartons etc, the weight, the volume.
For general cargo, this should be enough. But for certain cargo you may need additional certification. For eg,
Food products: FSSAI Registration, PQ, AQ noc.
Cosmetics: Form 43, Form 10 registration
Wireless products like Bluetooth speakers: Type approval, WPC certificate etc.
Wooden Furniture: Fumigation certificate.
Getting help from a qualified professional can help ease out the process. The professionals may guide you about the various requirements for a commodity. Also, there may be commodities that are Prohibited or Restricted by the law. Hence it is imperative that one checks with a professional what the law of the land is.
Good luck, do post your questions, corrections, suggestions!