This guide breaks down exactly what you need to know about import duties, licensing requirements, and compliance protocols when sourcing from China in 2026.

Why Import from China? The Numbers Indian Businesses Can't Ignore

China's manufacturing dominance isn't accidental. For Indian businesses, the math is compelling:

• Cost advantage: Manufacturing costs in China are 30-40% lower than domestic alternatives for many product categories
• Scale: Access to factories that can handle bulk orders (1,000+ units) with consistent quality
• Variety: From electronics components to textiles, machinery to consumer goods—China produces it all
• Established supply chains: Decades of export experience means streamlined logistics

Key Fact: India's imports from China reached approximately $101 billion in 2024, covering everything from electrical machinery and nuclear reactors to organic chemicals and plastics.

Import Duty Structure on Chinese Goods: What You'll Actually Pay

This is where most first-time importers get surprised. The duty calculation isn't straightforward, and recent regulatory changes have added complexity.

Basic Duty Rates by Product Category

The Complete Duty Calculation Formula

When importing from China, your landed cost includes:

1. CIF Value (Cost + Insurance + Freight)
2. Basic Customs Duty (BCD) — varies by product (see table above)
3. Social Welfare Surcharge (SWS) — 10% of BCD
4. Integrated GST (IGST) — 5%, 12%, 18%, or 28% depending on product
5. Compensation Cess — if applicable (tobacco, vehicles, etc.)

Worked Example: Importing $10,000 (₹8,50,000) worth of electronic components

Effective duty burden: Approximately 31% above your product cost.

> Pro Tip: Always request your Chinese supplier to provide detailed HS code classification before finalizing orders. Misclassification can lead to duty disputes and penalties at Indian ports.

Mandatory Licenses & Registrations: The Non-Negotiables

You cannot legally import from China without these documents. Period.

1. Import Export Code (IEC)

What it is: A 10-digit code issued by the Directorate General of Foreign Trade (DGFT)

Who needs it: Every business importing goods into India

Cost: ₹500 (online application via DGFT portal)

Processing time: 3-7 working days

Key requirement: Your IEC must be linked to your PAN and active on the DGFT portal

2. AD Code Registration

What it is: Authorized Dealer Code from your bank—mandatory for customs clearance

Why it matters: Without AD Code registration at your port of import, your goods cannot clear customs

Process:

• Obtain AD Code letter from your bank
• Register on ICEGATE portal
• Link to your IEC

3. Product-Specific Licenses

Depending on what you're importing from China, you may need:

Recent Regulatory Changes: What Changed in 2025-2026

The Indian government has tightened import regulations significantly. Here's what affects your China imports:

Quality Control Orders (QCOs)

BIS certification is now mandatory for over 25 product categories imported from China, including:

• Toys (IS 9873 series)
• Electronics (IS 616, IS 13252)
• Chemicals and fertilizers
• Steel and steel products

Impact: Non-compliant shipments are rejected at port and returned to China at importer's expense.

Country of Origin Marking

All imported goods must now clearly indicate:

• Country of origin (e.g., "Made in China")
• This marking must be permanent and visible

Penalty for non-compliance: Seizure of goods + fines up to ₹1,00,000

Restricted Import Categories

Certain products now require specific licenses or face import restrictions:

• Color TV sets (restricted—require license)
• Air conditioners with refrigerants (regulated)
• Specific chemicals under environmental regulations

Step-by-Step Process: From Order to Delivery

Step 1: Pre-Import Compliance Check

• Verify your IEC is active
• Confirm product HS code with your CHA (Customs House Agent)
• Check if BIS certification is required
• Obtain any product-specific licenses

Step 2: Supplier Verification

• Request factory registration documents
• Verify GST-equivalent registration in China
• Check for any sanctions or restricted entity lists
• Obtain product test reports (if required)

Step 3: Documentation Preparation

Your Chinese supplier must provide:

• Commercial Invoice
• Packing List
• Bill of Lading/Airway Bill
• Certificate of Origin
• Product-specific certificates (BIS, FSSAI, etc.)

Step 4: Customs Clearance

• File Bill of Entry through ICEGATE
• Pay customs duties (BCD + SWS + IGST)
• Submit for customs examination (if selected)
• Obtain customs clearance order

Step 5: Post-Clearance Compliance

• Maintain import records for 5 years
• File GST returns claiming input tax credit on IGST paid
• Comply with any post-import audit requirements

Cost Breakdown: What Importing from China Actually Costs

Beyond product costs and duties, budget for these expenses:

Total additional costs: Typically 8-15% above your CIF value + duties.

Common Pitfalls When Importing from China

> Watch Out: These mistakes cost Indian importers thousands every month:

1. Incorrect HS code classification — Leads to duty disputes and potential penalties
2. Missing BIS certification — Shipments returned at importer's cost
3. Undervaluation — Customs can reassess value and impose penalties up to 5x duty difference
4. Incomplete documentation — Delays clearance and incurs demurrage charges
5. Not verifying supplier credibility — Risk of receiving substandard or counterfeit goods

Anti-Dumping Duties: The Hidden Cost Layer

Many Chinese products face additional anti-dumping duties (ADD):

Always check the DGFT website for the latest anti-dumping notifications before placing orders.

Payment & Foreign Exchange Considerations

RBI Guidelines for China Imports

• Payments must be made through authorized banking channels
• Advance payments up to $500,000 allowed without bank guarantee
• For larger advances, bank guarantee or standby LC required
• All remittances must be reported to RBI through AD Category-I banks

Currency Risk Management

With CNY-INR volatility, consider:

• Forward contracts to lock exchange rates
• Natural hedging (if you also export to China)
• Currency hedging instruments offered by banks

FAQs: Quick Answers for China Importers

Q: Can I import from China without an IEC?

A: No. IEC is mandatory for all imports above ₹25,000 value.

Q: How long does customs clearance take for Chinese goods?

A: 2-5 days for green channel, 7-15 days if examination is required.

Q: Are there any banned products from China?

A: Yes—check the DGFT's "Restricted" and "Prohibited" lists. Some IT hardware requires specific licenses.

Q: Can I claim IGST paid on imports as input tax credit?

A: Yes, if you're GST registered and the goods are for business use.

Q: What's the cheapest way to ship from China to India?

A: Sea freight (LCL for smaller shipments, FCL for bulk). Air freight for urgent/valuable goods.

Key Takeaways for 2026

1. Compliance first: BIS certification and proper documentation are non-negotiable
2. Budget realistically: Total landed cost = Product cost + 25-35% in duties and charges
3. Verify everything: Supplier credentials, product certifications, HS codes
4. Stay updated: QCOs and duty rates change frequently—check before each shipment
5. Use experts: A reliable CHA saves more money than they cost

Need Help Importing from China?

Navigating Chinese imports requires expertise in customs regulations, duty optimization, and compliance management. At Befach International, we help Indian businesses import from China smoothly—handling documentation, customs clearance, and regulatory compliance.

Contact us for a consultation on your China import requirements.

Sources:

• Directorate General of Foreign Trade (DGFT)
• Central Board of Indirect Taxes and Customs (CBIC)
• Bureau of Indian Standards (BIS)
• ICEGATE - Indian Customs Electronic Gateway
• Ministry of Commerce, Government of India

Last updated: May 2026. Duty rates and regulations change frequently. Verify current rates on the official CBIC portal before importing.

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