India is the world’s sixth largest economy. As India’s middle class grows, so does its demand for imported goods. India’s total imports from the years 2021 to 2022, reported the Ministry of Commerce and Industry, were US$610.22 billion, showing an increase of 54.71% over the last year. These numbers indicate the large number of products imported into the country and hold great potential for entrepreneurs.
However, just like many countries of the world, India also has some strict rules and regulations regarding shipping products into the country and clearing them from customs. One such requirement essential for customs clearance is the documents required for KYC. So what is KYC, and why are KYC documents required for a smooth import clearance process in India? What exactly is the process of submitting KYC documents? We provide the answers to these questions in this article.
KYC is the abbreviation of ‘Know Your Customer’. Simply put, it is a mandatory procedure where entities are required to submit documents to verify the identity and address of the receiver. Whether an individual is sending a shipment to India or a company is sending bulk products, KYC documents must be submitted to the logistics carrier.
India’s KYC regulations were implemented, as part of the Money-Laundering Act (2002) and the prevention of Money-Laundering Rules (2005), to prevent anyone from fraudulently making use export incentives, misusing export promotion schemes, and evading import duties. Therefore, when consignees receive products from abroad, they must submit KYC documents in order for their imports to cleared by Indian customs This is irrespective of the value of those shipments.
Since KYC documents should be provided to the customs officials during the import clearance process, the receiver needs to submit them to the logistics carrier before the shipment arrives. If the documents are not submitted at that time, it will not only result in the process of clearance being delayed but can even incur penalties in some cases.
The KYC documents the receiver must submit can be categorised under two groups: proof of identity and proof of address. These are discussed below:
The following steps must be followed to complete the KYC mandatory process:
The know your customer form and document should be submitted to the carrier whenever you wish to ship to a new address in India. The carrier will then save the required information in their KYC database regarding this destination address.
However, if the receiver’s details change or you have to ship to a new address, you will have to submit these required know your customer documents with the updated information. If you change your logistics carrier, you must re-submit the KYC docs.
DHL Express is the global leader in the logistics industry. Specialising in international express delivery, we have a committed team of experts who have acquired a set of skils and deep knowledge of customs clearance. Sign up for a DHL Express account today to experience a smooth shipping process.