Learn about cross-border ecommerce, shipping, and importing.
If you are looking to grow your ecommerce business into India , you’ve come to the right place. Keep reading to learn everything you need to know about selling goods into India.
India imposes high import fees, and Indian consumers and companies are immensely price sensitive.
Structural reforms, increase in government investments, and technological advancements have facilitated more trade in recent years.
India’s government eased foreign direct investment (FDI) restrictions, which makes trade more attractive.
While they’re improving, India’s telecommunication and infrastructure hinder India’s economic status and ability.
Landed cost fairness 1/5
India does not operate a de minimis, so fees will be levied on all imports, which is unfavorable for landed cost.
India imposes one of the highest tariffs on imports, which is extremely disadvantageous for landed cost.
Flexibility of legal regulations 2/5
While India has implemented reforms to improve legal regulations, the requirements for importing are quite extensive and they're often non-transparent and unpredictable.
Availability and accessibility of shipping 4/5
India’s remote location can increase transportation costs, but all major carriers ship to India.
Accessibility and variety of payment methods 5/5
India operates a plethora of payment methods, including Mastercard, VISA, American Express, PayPal, PayTM, PayUMoney, Google Pay, Apple Pay, Skrill, PayZap, Pockets, and RuPay.
Market opportunity 4/5
India has a large and healthy middle class, making it an attractive consumer market.
While India is the most populous country in the world, less than half of the population shop online.
The landed cost for a cross-border transaction includes all duties, taxes, and fees associated with the purchase. This includes:
Shipping
Duties
Taxes
Fees (currency conversion, carrier, broker, customs, or government fees)
Indian de minimis, tax, and duty
Term to know
CIF: CIF (cost, insurance, freight) is a method for calculating import taxes or duties where the tax is calculated on the cost of the order plus the cost of freight, insurance, and seller's commission.
Normally, duty and tax are only charged on imports where the value of the import exceeds the minimum value threshold (de minimis). However, India does not have a de minimis, which means duty and tax fees are charged on all imports. The only time goods are exempt from duty and tax is when they receive preferential treatment through trade agreements.
Import tax
Standard rate: 28%
Applied to the CIF value of the order
Goods and services tax (GST)
GST is made up of three different kinds:
Central GST (CGST): A fee collected by the central government for sales in all states.
State GST (SGST): A fee collected by each state for sales within a state.
Integrated GST (IGST): A fee collected by the central government for sales between states.
The standard combined tax rate for goods being imported into India is 28%.
Import duty
Average rate 35%
Applied to the CIF value of the order
Duty rate
While a duty rate of 35% for goods imported into India is most common, India has some unique duty charges that may apply to the goods you wish to import.
Other import fees
Basic Customs Duty (BCD)
BCD is based on the product's HS code and its origin. The rates range from 0% to 100%.
Countervailing Duty (CVD)
CVD rates depend on the product; the fee ranges from 0% to 12%.
Special Additional Duty (SAD)
A 4% SAD fee is applied to some imported goods that put domestically manufactured goods at a disadvantage due to sales tax.
Compensation cess
Compensation cess is charged on certain products, such as tobacco and products that cause pollution (coal and cars).
Landed cost examples
Below is a sample landed cost breakdown for India calculated using Zonos Quoter. Since the de minimis is 0 INR, duty and tax will always apply:
Landed cost for a shipment to India:
Trade agreements
India has at least 13 trade agreements that offer a zero or highly discounted duty rate for goods manufactured in participating countries.
India is a member of the World Trade Organization
As a member of the World Trade Organization (WTO), India must abide by the most-favored-nation (MFN) clause, which requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other WTO member countries. For example, if one country reduces duties by 10% for a particular WTO country, the MFN clause states that all WTO members will receive the same 10% reduction.
For all non-document shipments, one of the following documents must be provided by the India-based recipient and presented to customs for the shipment to be cleared:
For individuals:
Aadhar Card
Personal PAN Card
Document of proof of address required if this form of ID is used.
Voter's Identity Card
Passport
Driving License
NREGA Card
For businesses (one document each for proof of identity and address required):
Proof of ID:
GST Certificate
PAN Card
Proof of address:
Bank account statement
Electricity bill
Telephone bill
Rent agreement
Prohibited, restricted, and controlled imports into India
Government agencies regulate imports. Under India’s EXIM Policy, regulation of Open General License (OGL) imports are labeled as freely importable without restrictions or a license. Items that do not fall under the OGL are prohibited or restricted items. There are certain imports that only the government is allowed to approve (canalized). See here for more details.
Prohibited vs. restricted. vs. controlled items
Restricted items are different from prohibited items. Prohibited items are not allowed to be imported into a country at all. Restricted items are not allowed to be imported into a country unless the importer has approval or a special license. Controlled goods have military or national security significance.
Prohibited items:
Wild animals and animal products
Certain animal fats, including lard and mutton tallow
Electronics, including things such as televisions and cell phones
Fabrics and fabric samples
Films: 8mm, 16mm & 35mm, entertainment, promotional, or training
Fire extinguishers
Fireworks
Foodstuffs
Gems and jewelry containing precious and semi-precious metal/stones in all forms is prohibited regardless of the value and must be shipped as Broker Select Option (BSO) to Export Oriented Units (EOU), Special Economic Zones (SEZ), or Santacruz Electronics Export Processing Zone (SEEPZ) only
Do I need a business license or business registration to sell online to India?
When selling to India, business owners are required to have a current account in the name of their business. To have a current account, business owners need to make sure that their business is a legal entity, is registered with the taxation authorities, and has a business license.
An LLP for a foreign company selling in India can face obstacles due to strict foreign investment regulations. However, the registration process for a private company is less expensive, easier, and requires fewer documents. It stipulates that at least two (and no more than 200) shareholders of non-transferable shares are needed, with a minimum share capital of 100,000 INR (approximately 1,500 USD). Registration for a private company also requires at least one director who is a resident of India or has lived in India for more than 182 days in the previous financial year.
India
India country guide
Learn about cross-border ecommerce, shipping, and importing.
If you are looking to grow your ecommerce business into India
, you’ve come to the right place. Keep reading to learn everything you need to know about selling goods into India.
Ease of importing goods score: D
Ease of doing business 3/5
Landed cost fairness 1/5
Flexibility of legal regulations 2/5
Availability and accessibility of shipping 4/5
Accessibility and variety of payment methods 5/5
Market opportunity 4/5
Key stats for India
Landed cost for India
The landed cost for a cross-border transaction includes all duties, taxes, and fees associated with the purchase. This includes:
Indian de minimis, tax, and duty
CIF: CIF (cost, insurance, freight) is a method for calculating import taxes or duties where the tax is calculated on the cost of the order plus the cost of freight, insurance, and seller's commission.
Further explanation of de minimis, tax, and duty provided below
Duty and tax de minimis
Applied to the CIF value of the order
De minimis value
Normally, duty and tax are only charged on imports where the value of the import exceeds the minimum value threshold (de minimis). However, India does not have a de minimis, which means duty and tax fees are charged on all imports. The only time goods are exempt from duty and tax is when they receive preferential treatment through trade agreements.
Import tax
Applied to the CIF value of the order
Goods and services tax (GST)
GST is made up of three different kinds:
The standard combined tax rate for goods being imported into India is 28%.
Import duty
Applied to the CIF value of the order
Duty rate
While a duty rate of 35% for goods imported into India is most common, India has some unique duty charges that may apply to the goods you wish to import.
Other import fees
Basic Customs Duty (BCD)
Countervailing Duty (CVD)
Special Additional Duty (SAD)
Compensation cess
Landed cost examples
Below is a sample landed cost breakdown for India calculated using Zonos Quoter. Since the de minimis is 0 INR, duty and tax will always apply:
Landed cost for a shipment to India:
Trade agreements
India has at least 13 trade agreements that offer a zero or highly discounted duty rate for goods manufactured in participating countries.
India is a member of the World Trade Organization
As a member of the World Trade Organization (WTO), India must abide by the most-favored-nation (MFN) clause, which requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other WTO member countries. For example, if one country reduces duties by 10% for a particular WTO country, the MFN clause states that all WTO members will receive the same 10% reduction.
Customs resources
India’s Customs authority
Department of Revenue, Ministry of Finance, Government of India
Customs refund in India
Claim a refund for Indian Customs
Shipping and compliance
Top courier services:
Depending on the courier, additional shipping fees may include:
Documentation and Paperwork
Always required:
Sometimes required:
For all non-document shipments, one of the following documents must be provided by the India-based recipient and presented to customs for the shipment to be cleared:
For individuals:
For businesses (one document each for proof of identity and address required):
Prohibited, restricted, and controlled imports into India
Government agencies regulate imports. Under India’s EXIM Policy, regulation of Open General License (OGL) imports are labeled as freely importable without restrictions or a license. Items that do not fall under the OGL are prohibited or restricted items. There are certain imports that only the government is allowed to approve (canalized). See here for more details.
Restricted items are different from prohibited items. Prohibited items are not allowed to be imported into a country at all. Restricted items are not allowed to be imported into a country unless the importer has approval or a special license. Controlled goods have military or national security significance.
Prohibited items:
Restricted items:
Frequently asked questions
Do I need a business license or business registration to sell online to India?
When selling to India, business owners are required to have a current account in the name of their business. To have a current account, business owners need to make sure that their business is a legal entity, is registered with the taxation authorities, and has a business license.
An LLP for a foreign company selling in India can face obstacles due to strict foreign investment regulations. However, the registration process for a private company is less expensive, easier, and requires fewer documents. It stipulates that at least two (and no more than 200) shareholders of non-transferable shares are needed, with a minimum share capital of 100,000 INR (approximately 1,500 USD). Registration for a private company also requires at least one director who is a resident of India or has lived in India for more than 182 days in the previous financial year.
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