How to Import From India – Procedures, Steps, and Details

In recent days, Entrepreneurship is becoming one of the top choices among youngsters and business-interested people compared to a few years ago.

Fortunately, to support the people, India’s import and export market has been growing with many opportunities for newcomers, especially the youth. It indirectly helps the national economic growth and employment.

Our Indian products include farms, culinary, agriculture, ethnicity, and much major wealth of nation are creating its way to the international market and attracting a global audience.

The import/export market in India is growing every day with a lot of opportunities for us.

Indian Custom Authorotoes have always updated the Indian Customs Compliance Information in their portal for the betterment of their people. Their updates on the portal deliver information regarding customs procedures and regulatory companies for all export and import trading in India.

Today, we are going to see the Import procedures in India with step by step process.

If you are into business and planning to set up a trading company or want to import from India, you must know all the procedures, stages, stakeholders, regulatory framework, and documentation involved in the process.

In India, a 1992 Act of Foreign Trade is regulating all imports and exports. It helps the federal government to develop facilities for foreign trade regulation and development. The current facilities available for import and export in India are regulated by the Foreign Trade Policy, 2015-20.

Import Procedures Followed in India

The common procedures for import and export business in India include license approval and other compliance before shipping, transport arrangements, and warehousing and also after the delivery, customs clearance, and tax payment before product release.

Let’s see the process step by step.

Step 1. Obtain IEC.

For importing from India, first, a business must get an Import Export Code (IEC) number which is like a license. This number is obtained from regional joint DGFT.

The IEC gives lifetime validity and is issued with the PAN identification of traders. It is required for the further process including customs clearance, shipping, and foreign money transfer.

The process may take from 10 to 15 days to complete.

Step 2. Legal Compliance

After you obtained an IEC number, you have to ensure legal compliance under required Indian trade laws and regulations to import goods.

The import goods should meet the requirements of Section 11 of the Customs Act, 1962, Foreign Trade (Development & Regulation) Act, 1992, and the Foreign Trade Policy, 2015-20.

To import goods that are declared as restricted, prohibited, or canalized, by the government, you need to get additional permission and an official license from the DGFT as well as the Federal government.

Step 3. Obtain Import License

Before applying for the import license, as an importer, you have to determine if your goods or services need a license to import. For that, you have to first identify its Indian Trading Clarification by checking Harmonized System of Coding or ITC (HS) classification.

ITC (HS) is the primary method of classifying trade items and import/export operations in India. It is an 8-digit alphanumeric code given by DGFT. The code includes a class or category of an item that guides the importer to ensure the regulations compliances linked to that specific item.

This import license is classified into two General and Specific. With a general license, you can import products from any country on the other hand specific license allows the import of products to specific countries.

The import license is renewable and its normal validity is 24 months for capital goods and 18 months for raw materials, consumables, and spare parts. This license is used for import clearance.

Step 4. File Bill of Entry and Documents to clear Customs formalities

As you get all the required import licenses, now you want to clear import declaration in the required Bill of Entry using the PAN (Permanent Account Number) based business identification number (BIN) that comes under Section 46 of the Customs Act, 1962.

This Bill of Entry has the information on the precise quantity, exact nature, and total values of the imported goods that landed in the country.

If an import of goods is cleared using the EDI (Electronic Data Interchange) system, there is no need for a Bill of Entry. Because goods clearance using EDI is handled by a computer system. Anyhow, it is a must for the importer to file a cargo declaration once you submitted the details that are required for the customs clearance entry process.

When an importer has not used the EDI system for Bill of Entry, they are asked to submit certain supporting documents including an Inspection certificate, Origin certificate, bill of exchange, and commercial invoice with a packing list.

As soon as the goods are shipped, the customs officers verify and check the information said in the bill of entry and ensure it matches with the imported goods. If everything meets the requirement, the officers issue a ‘pass out order’ to your goods which allows them to leave the customs.

Step 5. Fix import duty rate for good clearance

India put a tax on all basic customs duty on imported goods which comes under Customs tariff Act, 1975. In addition to this, good specific duties include safeguard duty, goods specific duties, and social welfare surcharge. Along with this, the Indian government also collects an integrated goods and services tax (IGST) which comes under the new GST system introduced in 2017.

The IGST rates vary based on the type of imported goods as per Section 5 of the IGST Act, 2017.

Required Documents for Import/Export

To do import and export activities in India, the involved business should submit a specific set of documents. The set includes some of the commercial documents like the ones that should be exchanged between seller and buyer, and regulatory documents that should be approved by government authorities such as excise, customs, license, and promotion bodies.

According to Foreign Trade Policy, 2015-2020, an importer and an exporter should have the following documents for import and export in India.

• • Airway bill / Bill of lading
  • Commercial invoice cum packing list
  • Shipping bill / Bill of Export / Bill of Entry

In addition to these, certificate origin and inspection certificates are required based on the service.

The essential regulatory documents are,

• • GST return forms (GSTR 1 and GSTR 2)
  • GSTR refund form
  • Exchange control Declaration (ECD)
  • Bank realization Certificate
  • Registration cum Membership Certificate (RCMC)