In 2020, India imported items from China with a value of ₹44,981 crores. As a result, China is India's primary supplier of goods. Electro-mechanical equipment, a variety of intermediate chemicals needed by industries, active pharmaceutical ingredients, car components, and, beginning in 2020, many medical supplies were the major imports from China to India. Following Covid-19 and the resulting supply chain disruption, numerous countries, notably India, have expressed a desire to reduce their reliance on China. On the other hand, imports increased in 2021, according to trade data.
Despite this, rising border hostilities between our country & Beijing, and increasing worries of being overwhelmed with low-cost Chinese goods, India continues to buy from China. India's reliance on Chinese commodities is partly due to the country's inability to bridge the space between local output and consumption and China's prominence as a production and export nation. This post will explain what is taken into consideration under importing from China to India and provide a brief overview of the India-China import-export relationship.
Did You Know?
In 2021, India's trade with China will total ₹97,000 crores. It was the first time the registered trademark exceeded ₹77,000 crores in value. India's imports from China totalled ₹75,000 crores, while exports totalled ₹22,000 crores, which were new highs.
The BIS Act 2016 established the National Standard Body of India for the simultaneous growth of standardisation, labelling, and quality assurance of goods and topics related to or ancillary to such operations. Through standardisation, certification, and testing, the BIS has been offering a chain of custody and liquidity perks to the economic growth in a variety of ways, including providing safe, reliable quality goods, minimising health implications to consumers, promoting import-export of goods as a substitute, and controlling the proliferation of varieties, among other things. The BIS certification is now mandatory for an additional 400 items of import as it seeks to tighten restrictions on non-essential goods from China.
Imported Goods Are Subject to One of Two Schemes for Certification
Compulsory Registration Scheme
Consists of electronic and data technologies (mobiles, laptops, smartwatches, TVs, lights and various other gadgets). An importer who sources a CRS item via China (or another nation) must have his/her product registered under BIS. The notification of certification is received by the manufacturer rather than the importer. On the other hand, the importer might represent the Chinese manufacturer when in India and seek accreditation on their account.
Foreign Manufacturers Certification Scheme
A necessary ISI mark is required for some product categories which are meant for sale in India, imported from China or other countries. Importers can register such products with BIS underneath this scheme of Foreign Manufacturers Certification. The manufacturers located outside India are able to obtain a permit as per the rules of the scheme if they meet BIS quality criteria and satisfy the necessary factors such as manufacturing framework, the process of production, quality maintenance, and certification capabilities.
Items include SCOMET (special chemicals, organisms, materials, equipment, and technologies) products specified in the third appendix of schedule I of the Indian Trade Classification, which is a system followed in India for segregation of goods for import & export, also requiring BIS registration. Nuclear material, poisons, electronics and other controlled substances are included on the SCOMET list.
Process of Applying Under BIS Certification
Method of Compulsory Registration Scheme
- Import product samples for evaluation.
- According to the guidelines of BIS, if the manufacturer is outside India, register as an Authorised Indian Representative (AIR).
- Register on the BIS portal and verify the name & address of the manufacturer.
- Online, create a request for a test, send sample information, and choose a BIS laboratory.
- Send a sample to the lab of your choice.
- Submit the appropriate licence application form and supporting papers along with the reports of the test.
- At the expense of the form, their inspectors will go to the manufacturer's nation to look at their respective factories. They may decide to appoint an inspector to conduct additional inspections.
- If all paperwork is in order, conformity with BIS criteria is built, and the cost is paid, a licence is normally given within 20 working days. The applicant is given a unique registration number that they can put on their goods.
- If there is any doubt in the process, the importer will be notified and given thirty days to fix it.
Method of Foreign Manufacturers Certification Scheme
The method for obtaining a licence in this scheme is similar to the first one, with an exception: the applicant must send the required form, along with all supporting documents and fees, physically at the headquarters of BIS located in Delhi.
Documents Necessary to Register Under BIS
- Proof of application submission
- An application form
- Address proof is required.
- Evidence of the name of the brand (certificate of brand registration, copy of trademark application, a letter from the owner)
- A signed application or a letter of authorisation from the CEO of the production unit is required.
- If the manufacturer is based outside of India, an affidavit and assurance from an Indian
Representatives, who must be authorised, are required.
- Report on the test
- a project for a test report
- Commercial bills, packing list, cover letter of insurance, bill of lading, and certificate for country of origin are all included in the bill of entry.
Custom Documents for Import From China
These are the basic custom documents one will need for import from China:
- Bill of Lading
- Commercial Invoice
- Proforma Invoice
- Purchase Order
- Letter of Credit
- Insurance Certificate
- Health Certificate
- Certificate of Country of Origin
Customs Duties on Imports From China
Customs Duties are levied on goods imported from China to India. Import duty is computed based on the CIF value of the product, including cost, insurance, freight, and has three elements for maritime shipments:
- Basic Customs Duty - The rate changes depending on the commodity. The government has the power to exempt some goods under this charge.
- GST Compensation Cess and Integrated Goods and Services Tax - It is the addition of Central and State GST. The committee of GST compensation pays states if any loss is incurred due to GST implementation.
- The Social Welfare Surcharge - It is a 10% surcharge on the sum total amount of customs duties, levied taxes, and cesses gathered as per the Customs Act of 1962.
In addition, your cargo imported from China may be subject to additional duties, for example:
- Anti-dumping Duty — It applies to imports that are priced underneath the national market price. India imposes an ADD on Chinese bottle-grade Plastic and some steel items.
- Countervailing Duty - Introduced to safeguard local producers from imports at a reduced cost, same as the equivalent of a central excise charge on similar commodities manufactured in India.
- Safeguard Duty - It protects domestic producers from any damage caused by an increase in imports. Solar cells imported from China are subject to a 14-15% safeguard tariff.
- Protective Duty - A responsibility that attempts to look after local producers is the Protective Duty.
- Education Cess - It is a tax that is charged around 1-2% of the total amount of customs taxes.
- Handling Fees - Fees charged for handing products as well as their loading and unloading.
- Important things that must be present on the label
The items imported from China (or other nations) must adhere to stringent labelling requirements, which may differ from international standards.
If importing packaged foods:
- Name of the product
- Ingredients in decreasing manner of the product's composition.
- Net weight or volume of contents
- Number of the batch/lot/code
- Manufacturing date, also packing and expiration date.
- Retail price maximum
- Manufacturer's, importer's, and packer's names and addresses
- Country of origin, importer's name and address, and packaging information (if the product is made elsewhere but bottled in India).
- With a logo, indicate if the product is vegetarian or non-vegetarian
- The logo of FSSAI is accompanied by its licence number.
- Highlighting the colouring agent
If importing non-food products:
- Product name
- Net quantity
- Date of manufacture & packaging and import
- Maximum Retail Price
- Importer's name and address
Importing and environmental responsibility are complementary to each other in an increasingly environmentally sensitive world. The rules made for electronic waste in India define the duties of electrical and electronic equipment importers. Its goal is to protect people and the surroundings from the dangers of inappropriate e-waste handling. The rules for e-waste incorporate two practices: the Restriction of Certain Hazardous Substances (RoHS) and the Waste Electrical and Electronic Equipment recycling (WEEE) directive.
The RoHS directive prohibits the usage of 10 hazardous substances in manufacturing electrical equipment post the suggested limit. The WEEE Directive aims to reduce the amount of electronic waste produced. It establishes regulations for successful recycling, recovery, and re-use of such garbage wherever it is generated.
India cannot afford to terminate ties with China because its northern neighbour's imports dominate some sectors of the economy, particularly in electronics and pharmaceutical intermediates. This is the outcome of decades of neglect of home manufacturing. This trade and import of goods from China to India will grow massively with time despite all the other relations between the two growing nations of Asia. China has had the edge over India in exports imports and excels in importing products to India. Countries' relations are frequently referred to as "ties," This may be a suitable semantic choice to define India's relationship with China, but only when the term is used economically rather than emotionally.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.