Can I import electronic products from China to India? Is there any restriction from the government?

•  27 Nov, 2024
•  ISI Certification (BIS)

India opened up to the world market for the first time in 1992 via the LPG reforms.      The new Indian e-commerce market has been continuing to grow fast in the recent past due to influential factors such as the rising number of smartphone users, enhanced internet accessibility, the emergence of online payment systems, and the widespread business consumer accessibility in Tier II and Tier III cities making it one of the fastest-growing e-commerce markets on the global platform.

Consequently, several online sellers are importing goods from China because China manufactures a wide range of goods. Despite the global pandemic and geopolitical tensions, trade between these two Asian giants is thriving. Not only are large corporations getting a piece of the pie, but small businesses and individual businessmen are also earning large profits.

In 2023-24 India's electrical, electronic, and telecom imports have risen to USD 89.8 billion. According to the GTRI report, India imports approximately 44% of electronic goods from China such as transistors, diodes, and related semiconductor devices as well as communication devices such as mobile phones, tablets, laptops, batteries, and other wireless devices and a variety of equipment.

In this world of complex interdependence, geopolitical relations play a role in determining India’s trade relations. In light of current India-China trade relations wherein India has reaffirmed the restrictions on import of certain electronics & IT goods; it is important to understand how to import goods from China and what terms and conditions the Indian importers need to meet in this trade.

First, let us go through the summary of Government import restrictions notifications -

• Under the Directorate General of Foreign Trade, Ministry of Commerce; 2023 - notification, India has introduced import restrictions on electronic devices such as PCs, laptops, etc. 
• These import restrictions are imposed to boost the Indian domestic manufacturers and support the “Make in India” campaign. This move can lower the cost of electronic items. 
• In the notification, DGFT has mandated that businesses will have to present a license for importing mentioned electronic devices.
• There is a notification from the Ministry of Commerce dated May 20, 2024 - which reinforced the restrictions on imports of specific electronics and IT goods. The rule, in effect since 2021, forbids unregistered and non-compliant products. 
• The government will allow the import of goods that meet safety standards and BIS standards. 
• The non-compliant goods will face re-exportation or destruction.

From the above information, the following conclusions can be made as follow; For you to import goods from China:

1. You as an importer of electronics goods from China to India need to have an import license.
2. The products must meet the safety as well as all the relevant BIS standards.

Kindly note that there are import restrictions – something different from an outright ban on the importation of some products. However, to have a smooth import the business must abide by the new regulations and the new procedures.

Let’s understand what are rules and regulations for importing goods in India -

What are the import rules and procedures in India?

While talking about the import regulations, the most important aspect is knowing about HSN codes (Harmonized System of Nomenclature). These codes form integral components while classifying goods for taxation purposes. 

Electronic products' HSN codes help to determine appropriate customs duties and tax levied on imported items. Hence, for importers to identify the correct HSN code is paramount.

Now let’s understand the what is the involvement of the Bureau of Indian Standards in imports -

Role of BIS in imports in India -

BIS (Bureau of Indian Standards) maintains the quality and safety of products manufactured in India. BIS also stipulates specific standards imported in India under the FMCS and X schemes etc.

It has three key functions: 

1. Set the uniform IS (Indian Standard) for agricultural and industrially manufactured goods, 
2. as a universal service requirement to have products tested, and 
3. As a means of indicating that a product meets BIS specifications – it allows the use of the Standard Mark otherwise referred to as the ISI Mark.

The BIS permits the use of ISI Mark under its product certification schemes. It may be noted that certification is done on a largely voluntary basis, though certain product types have a mandatory requirement for certification. The imported products are covered by the following certification schemes detailed below -

1. Compulsory Registration Scheme (CRS): 

• This category of EIT and ICT products includes mobile phones, laptops, smart watches, Bluetooth speakers, television sets, and LED lights.
• Any importer of a CRS product from China (or from any other country) is under the obligation to get that product registered with the BIS. The certification is not given to the importer but to the maker of the goods.
• It is also possible for the importer to be the local representatives of the Chinese manufacturer in India and seek the certificate on their behalf.

2. Foreign Manufacturers Certification Scheme (FMCS): 

• In India, certain product categories need to be mandatorily stamped with the ISI mark before being supplied; these are electronic goods, cement, batteries, medical products such as X-ray machines, iron and steel products, chemicals, fertilizers, and toys.
• Such products can be registered with BIS by their Importers with the Foreign Manufacturers Certification Scheme.
• A manufacturer is qualified for the license under this scheme if and only if he has facilities located outside India and corresponding to compliance with the BIS quality standards, and has, at his premises, necessary production facilities, production processes, quality control, and testing capabilities.
• Also, importers can be registered under this scheme voluntarily to certify other products.

3. SCOMET  (Special Chemicals, Organisms, Materials, Equipment, and Technologies) products: 

Furthermore, BIS registration is required for the import of SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) products mentioned in Appendix 3 of Schedule I (Imports) of the ITC (HS) Classification, which is India's system for categorizing goods for import and export.

The SCOMET list covers prohibited substances such as nuclear material, electronics, and toxins.

These might also fall under CRS or FMCS. For compulsory registration, SCOMET goods must meet the following conditions:

• They must be for captive consumption (defined as the consumption of commodities made by one division by another division of the same/related business to produce another product).
• They should be required continuously.
• They must be obtained from predetermined sources.

Apply to BIS Certification -

1. Under Compulsory Registration Scheme

• Product samples of imported goods - a maximum of five allowed for testing
• According to BIS guidelines, an Authorised Indian Representative (AIR) must be registered, while the manufacturer is located outside India.
• Register on the BIS site (www.crsbis.in/BIS), where you'll need to submit proof of the manufacturer's name and address.
• Generate test requests, submit sample details, and select a recognized BIS laboratory online.
• Take a sample to the recommended laboratory.
• Submit the required form for the license grant, along with supporting documentation (more on this later) and test reports. Test reports cannot be older than 90 days from the date of receipt of the online application.
• BIS inspectors will visit the manufacturer's country to inspect their factory, at the applicant's expense. They may authorize further monitoring by an independent inspector.
• If all documentation is in order, BIS standards are met, and the fee is paid, the license is normally awarded within 20 working days. The applicant receives a unique registration number, which they can attach to their product. The license is valid for two years and may be renewed.
• If this application is incomplete, an importer will be informed of the rejection and granted a period not exceeding thirty days to correct it.

2. Under Foreign Manufacturers Certification Scheme

• Under the Foreign Manufacturers Certification Scheme, the method for granting a license under FMCS is the same as under CRS, with one exception:

the applicant is expected to deliver the required application form to the BIS headquarters in Delhi and also all the supporting documents, and fees. 

Customs documentation for imports from China

The following are the most common documents (required and secondary) to prepare:

• Bill of Lading/Air Waybill
• Commercial Invoice with Packing List
• Proforma Invoice
• Purchase Order
• Letter of Credit and Insurance Certificate
• Health Certificate (For Food Products)
• Country of Origin Certificate.

Customs tariffs for imports from China into India

Sea transport from China to India takes 20 days. According to some estimates, a shipping line has at least one vessel departing China and arriving in an Indian port every day. So, how much does it cost to get a consignment through Indian Customs?

For ocean shipments, import duty is computed based on the product's CIF (cost, insurance, freight) value, which has three components:

• Basic Customs Duty (BCD) - Rates vary per commodity. The government may opt to exclude certain commodities from this duty or cut the rate of duty on others.
• Integrated Goods and Services Tax (IGST) and GST Compensation Cess - IGST equals the sum of Central GST and State GST. The GST compensation cess pays states for any losses incurred during the implementation of GST.
• The Social Welfare Surcharge (SWS) is levied at a rate of 10% of the total of duties, taxes, and cess collected under the Customs Act of 1962.

Additionally, your cargo from China may incur other duties, such as:

• Anti-dumping duty (ADD) is levied on imports priced below the domestic market price. India imposes ADD on Chinese bottle-grade PET resin (used to create soft drink bottles) and some steel items.
• Countervailing charge (CVD) - Imposed to safeguard domestic manufacturers from subsidized imports, it is equivalent to the central excise charge on comparable items produced in India.
• A safeguard duty is a measure to protect domestic producers from potential damage caused by an increase in imports. The import of solar cells from China (and other nations) attracts a 14.5% safeguard duty.
• Protective responsibility - Another responsibility that aims to protect domestic producers.
• Education Cess is levied at a rate of 1%-2% of the sum of customs taxes.
• Handling Charges - Charged for handling, loading, and unloading products.

What goes on your label?

Foreign goods entering India must meet strict labeling rules, which may differ from international norms. Failure to comply may result in customs holding or rejecting your shipment.

Non-food import labeling rules are as follows:

• Name of product 
• Net amount
• Month and year of production, packaging, and import.
• Maximum retail price.
• Name and address of the importer.

Important guidelines while importing electronic goods from China to India -

Please follow the following steps for the smooth movement of your import business along the borders:

• It’s important to find the correct HSN code for the goods that you are importing as well as be informed of various government requirements.
• Get reliable partners in China that will be in a position to produce products that meet the quality and safety standards of India, and be in a position to provide the necessary authenticated documents when required.
• Documentation is the main determinant of the ease of passing through a country’s customs. Kindly prepare other supportive documents including certificates of origin, bills, packing lists, all the required invoice lists, etc.
• For taxation and custom purposes make sure that you have chosen the accurate HSN code.
• Your calculation of taxes, customs duties, and product valuation depends upon the HSN code.
• To clear your goods at customs, you have to deliver all relevant documents to customs.
• Please make sure that the goods that you’re importing uphold the BIS standards as according to the government notification, the goods that do not meet the quality and safety standards will be re-exported or will be destroyed.

Please understand that these import restrictions are taken for long-term benefits for the Indian economy though it may take some time for relevant stakeholders to adjust

Such restrictions will boost the manufacturing of electronics and IT goods in the domestic industry. With the decrease in imports hence the availability of Chinese electronic goods such as laptops, PC, tablets, etc. we might see fluctuations in prices and ultimately rising demand for domestically produced goods; which will only drive more innovation.

Hence, for importers and businesses, it is wise to engage themselves in diversifying their product offerings while leaning towards domestic brands. At the same time, you should engage with trade experts, industry experts, and compliance industries to remain up-to-date with government notifications, rules, and regulations. Hence to set your future, strategy right to set your robust foothold in the Indian market.