Import Checklist India – Must Know Before Importing
Import Checklist India
Before importing goods into India from a foreign country, it is important for the importer in India to have a basic knowledge about the product to be imported, details of the seller, freight charges, customs duty, import restrictions and other procedures. Import of goods without good knowledge of the above areas could lead to losses or confiscation of the goods. In this article, we look at an import checklist and things to do before import.
List of Restricted Items of Import
Prior to planning for import of 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 restricted item by the DGFT, then product might not be allowed into India or may require further clearance for import into India. Hence, prior to dealing with foreign sellers, it is important 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 performing a due diligence on the product. First, obtain details of the product you intend to import from the manufacturers or dealers, review technical details, advantages, disadvantages, prices, terms of business, terms of delivery, etc.. Also, perform a domestic research on the product and review if you can manufacture or purchase the product in India at competitive prices, similar products, prospective buyers, etc., Often times, it is better to purchase products from India than abroad, as exchange rate risk, seller authentication risk and shipping risk are greatly mitigated. The following questions can be reviewed while performing a product due-diligence:
- Scope and demand for the product to be imported into India.
- End use of the product in India.
- Government of India’s policy and regulation with respect to the product.
- Foreign Governments policy with respect to the product.
- Experience of 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 cost.
- Licenses and registration required for import and sale of product 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 a seller due diligence. Information about the seller can be collected from sources like Chamber of Commerce, Export Promotion Councils, Banks and publications. The following is a list of sources for information about foreign sellers through which a 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, it is important to also verify the creditworthiness of the overseas supplier. Report on seller creditworthiness can be obtained through banks, ECGC, 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.