Import Checklist India

Before importing goods into India from a foreign country, the importer in India needs to have basic knowledge about the product to be imported, details of the seller, freight charges, customs duty, import restrictions, and other procedures. Importing goods without good knowledge of the above areas could lead to losses or confiscation. This article looks at an import checklist and things to do before import.

List of Restricted Items of Import

Before planning to import any goods or products into India, review the list of restricted items of import into India. If a product is listed on the list of prohibited items by the DGFT, then the product might not be allowed into India or require further clearance for import into India. Hence, before dealing with foreign sellers, it is essential to know if the item is restricted for import into India.

Product Due Diligence

After verifying the product is not placed on the list of restricted items of import into India, you can begin due diligence on the product. First, obtain details of the product you intend to import from the manufacturers or dealers and review technical information, advantages, disadvantages, prices, business terms, delivery, etc. Also, perform domestic research on the product and check if you can manufacture or purchase the product in India at competitive prices, similar products, prospective buyers, etc.; often, it is better to buy products from India than abroad, as the exchange rate risk, seller authentication risk, and shipping risk are significantly mitigated. The following questions can be reviewed while performing product due diligence:

Scope and demand for the product to be imported into India.
The end use of the product in India.
Government of India's policy and regulation concerning the product.
Foreign Governments policy concerning the product.
Experience with similar importers or customs clearance agents while importing similar products.
Price at which the product will be viable for sale in India.
Customs duty, freight charges.
Terms of credit provided by the seller.
Packaging and transportation costs.
Licenses and registration are required to import and sell products in India.

Seller Due Diligence

Once you have decided on the product and a list of sellers from whom the product can be purchased, you can begin performing seller due diligence. Information about the seller can be collected from sources like the Chamber of Commerce, Export Promotion Councils, Banks, and publications. The following is a list of references for information about foreign sellers through which seller due diligence can be conducted:

Consulate Generals, Embassies, High Commissions, and Trade representatives of Foreign Governments in India
Export Promotion Councils
International Trade Directories
Yellow Pages
Trade bulletins
Industry journals
Industry magazines
Friends and Relatives in Foreign Countries

Before placing an order and wiring money, verifying the overseas supplier's creditworthiness is essential. Reports on seller creditworthiness can be obtained through banks, ECGC, and Credit Information Agencies (CRISIL, S&P, Moodys, Dunn & Bradstreet, etc.). Also, have a Lawyer vet the purchase contract and ensure that you are sufficiently covered.

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Frequently Asked Questions

Common questions about Import Checklist India: Guide for Safe and Legal Importing.

An import checklist is a list of critical steps and considerations that an importer needs to follow before importing goods into India from a foreign country. It is important because importing goods without proper knowledge and preparation can lead to losses, confiscation of goods, or other legal issues.

The first step in the import checklist is to review the list of restricted items of import into India. This is crucial to ensure that the product you intend to import is not prohibited or requires special clearance for import.

Product due diligence is necessary to gather comprehensive information about the product, including its technical specifications, advantages, disadvantages, pricing, demand in the Indian market, and any regulations or policies governing its import and sale in India. This helps in making an informed decision about the viability of importing the product.

During product due diligence, an importer should consider factors such as the scope and demand for the product in India, its end use, government policies and regulations concerning the product, potential competition from domestic manufacturers, pricing and customs duty, packaging and transportation costs, and any licenses or registrations required for import and sale.

Seller due diligence is important to verify the credibility, creditworthiness, and reliability of the foreign seller or supplier. This helps in mitigating risks associated with dealing with an unknown or unreliable seller, such as financial losses or legal disputes.

Various sources can be used for seller due diligence, including consulates, embassies, high commissions, trade representatives, export promotion councils, international trade directories, industry publications, credit information agencies, and references from friends or relatives in foreign countries.

An importer can verify the creditworthiness of a foreign seller by obtaining reports from banks, the Export Credit Guarantee Corporation (ECGC), and credit information agencies like CRISIL, S&P, Moody's, and Dunn & Bradstreet.

It is important to have a lawyer review the purchase contract with the foreign seller to ensure that the importer's interests are adequately protected and that there are no ambiguous or unfavorable terms in the contract.

Some common challenges or risks faced by importers in India include exchange rate fluctuations, authentication of foreign sellers, shipping and transportation risks, compliance with import regulations and customs procedures, and competition from domestic manufacturers or suppliers.

An import checklist helps mitigate risks and challenges by ensuring that an importer conducts thorough due diligence, verifies the credibility of the seller, understands the product and its market demand, complies with relevant regulations and policies, and prepares for potential challenges related to customs clearance, pricing, and logistics.