Tips for new import businesses in India

Documents required for import procedure

How to start an import business in India? Firstly, you'll need to become familiar with the mandatory documents for import²: 

• Importer Exporter Code (IEC): This 10-digit code issued by the Directorate General of Foreign Trade (DGFT) is required for all import and export activities. This is where you start your import licence application.
• Business Registration Certificate: Proof of your business structure (e.g., proprietorship, partnership, LLP, company).
• Permanent Account Number (PAN) Card: A ten-digit alphanumeric number issued by the Income Tax Department for business tax purposes.
• Open A Bank Account: Set up a current account in the business’s name at a bank authorized to deal in international transactions.
• Registration-cum-Membership Certificate (RCMC): Necessary to claim government benefits, incentives, and export certain products.
• Export Promotion Council Membership: A certificate that authorizes you to claim export benefits and incentives.
• Incoterms (International Commercial Terms): While not strictly mandatory in all cases for importing into India, using Incoterms is highly advisable for international transactions to clarify responsibilities, costs, and risks for both buyers and sellers.
• Certificate of Compliance/Conformity: A document from a manufacturer or authorized party that declares that the product meets regulatory standards. All imports must comply with the Mandatory Quality Control Orders (QCOs) unless an exemption from the Bureau of Indian Standards (BIS) certification requirement is obtained³.

As an import business in India, you should know the customs clearance procedure for the import of goods like the back of your hand. Always allow for extra time to buffer against any errors or unexpected circumstances that may arise with your import license applications. Read more about the documents required for import customs clearance here.

Banking and payment options for import businesses in India

Import businesses in India may choose to rely on specialized services offered by the Export-Import Bank of India (Exim Bank), or large private and public sector banks such as HDFC Bank, ICICI Bank, Axis Bank, and State Bank of India (SBI). These banks offer essential services for managing international trade effectively, such as Letters of Credit (LCs) for supplier trust, bank guarantees, foreign currency accounts, and digital tools to streamline import payments and processes. Banks may also be able to help companies mitigate the impact of fluctuating currency rates through hedging strategies like forward contracts, which lock in an exchange rate for a future date, providing certainty and protecting profit margins. 

Essential banking services for import businesses

• Letters of Credit (LCs): A crucial instrument that guarantees payment to the supplier, building trust and enabling faster business relationships. 
• Bank guarantees: Banks issue these guarantees on behalf of importers. This helps assure any beneficiaries or suppliers of payment if the importer defaults. 
• Digital platforms: Many banks offer online portals to streamline invoicing, track payments, and manage trade finance documents efficiently. 
• Advance payments and remittances: Banks facilitate the timely payment of import bills and allow for remittances in various foreign currencies. 

What import businesses in India need to know about incoterms

Incoterms refer to a set of internationally recognized rules that designate the responsibilities of buyers and sellers in international trade transactions. All businesses that engage in imports and exports in India must understand Incoterms to determine who is responsible for costs, risks, and tasks in a transaction. This includes everything from transportation and insurance to customs clearance and duties. 

Essential incoterms for smooth import logistics

• EXW (EX Works): The seller makes goods available at their location. The buyer bears all costs and risks from the seller's premises to the final destination.
• FCA (Free Carrier): The seller delivers the goods, cleared for export, to a named carrier or person specified by the buyer. Risk and cost transfer to the buyer at this point.
• CPT (Carriage Paid To): The seller pays for carriage to the agreed destination. Risk transfers to the buyer upon delivery of the goods to the first carrier.
• DAP (Delivered At Place): The seller delivers the goods to a named destination. The buyer is responsible for unloading the goods and handling import clearance and duties.
• DDP (Delivered Duty Paid): The seller is responsible for all costs and risks, including customs duties and taxes, to the final destination. This is the maximum obligation for the seller.

Shipping options for import businesses in India

Businesses big and small rely on DHL Express for speed-critical and valuable shipments. Learn how to track import shipments and experience the fastest door-to-door air freight with real-time visibility. Or opt for economical ocean freight shipping for very large shipments, where lead time is a less pressing concern.

While India is a global leader in generic drug exports, it still relies on imports to meet domestic needs and access specific high-value pharmaceutical products. Streamline international imports of temperature-sensitive pharmaceuticals with DHL Express’s Medical Express services, which offers expedited shipping and temperature-controlled logistics.

Common mistakes made by new import businesses 

From incomplete documentation to poor market research, common mistakes can quickly snowball into hefty costs. Here's how to avoid common errors new importers often make^4,5:

• Poor market research: Research local demand and customer preferences for your products. This helps you avoid importing items with low demand.
• Incomplete documentation: Double-check all documents for accuracy and completion before submission to avoid delays or rejection of your business application.
• Regulatory non-compliance: Stay updated on India's import laws and regulations, including tariffs and quality standards, to prevent fines and shipment delays.
• Customs issues: Know your customs clearance procedure. Prepare and submit all required customs documents correctly and on time to ensure seamless import of goods. 
• Cost management failure: Account for all potential costs, including customs duties, warehousing, and taxes, to prevent a negative impact on your profitability.
• Risk management failure: Use contracts and agreements to manage risks. Diversify your suppliers to mitigate potential supply chain disruptions.
• Poor supplier selection: Do background checks and request references. Minimize risks by starting with small, trial orders to ensure you're working with a reliable and trustworthy partner.

International import product compliance and certifications

Established in 1987, the Bureau of Indian Standards (BIS) is India's national standards body and a government agency under the Ministry of Consumer Affairs (MCA). Today, BIS certification is compulsory for nearly 700 product categories, from electronics, chemicals to consumer and household goods⁶. The Indian government can also supplement BIS certification with Quality Control Orders (QCOs) to make certification mandatory for specified products. Import businesses in India seeking to bring in products that are either widely utilised or have the potential to impact consumer health should check the latest QCO notifications before importing.

Examples include food such as drinking water and milk powder, as well as safety gear, including fire extinguishers and goggles, all of which require BIS certification.

Voluntary vs mandatory BIS certification

For import businesses, some products require mandatory BIS certification, either under the ISI Mark Certification (Scheme I) for consumer goods or the Compulsory Registration Scheme (CRS or Scheme II) for electronics. While some products only require voluntary certification, obtaining a BIS mark can still significantly boost your product's credibility and market appeal, as many procurement contracts in India prefer BIS-certified goods. Ensure you check which scheme applies to your products to avoid compliance issues.

Efficient logistics and supply chain management

Managing import logistics is one of the biggest challenges for small and new businesses. Issues like complex customs clearance, finding reliable couriers, and efficient warehousing can lead to costly delays. Proactive planning is key to ensuring the smooth flow of goods to India. All necessary documentation should be meticulously prepared and all goods must be properly packaged and labeled to meet both origin and destination country regulations. Choosing the right logistics partner is vital for optimizing shipping routes and ensuring efficient supply chain management.

DHL Express's MyGTS online platform is a powerful tool that makes customs transactions and staying up-to-date on global trade regulations feel effortless. From calculating Landed Cost to finding the right HS codes for your shipments, MyGTS streamlines the process of finding the right documents required for import procedures by letting you cross-check against country-specific requirements.

How DHL Express can support your import business

Starting an import business isn’t something you can accomplish in an afternoon, but it is also far from impossible. Now that you know more about the fundamentals of setting up an import business in India, and understand the importance of import regulations, all you need are international shipping services you can rely on.

DHL Express provides a comprehensive suite of services designed to help import businesses thrive, including express shipping, same-day delivery, and simplified customs clearance. Tap into our global network spanning more than 220 countries and territories, as well as our local expertise in India for streamlined worldwide operations. From location tracking services to electronic proof of delivery, DHL Express stands ready to take your business to the next level.