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How to do business with India

Legal considerations

India’s legal system is based on English Common Law, and its judiciary is generally independent. Be aware that court delays can occur for several years, therefore litigation can be lengthy and expensive.

Controlled goods export licences for India

Make sure you have a licence when supplying items to India that are on the UK strategic export control list.

Standards and technical regulations

Manufacturers must obtain certification from the Bureau of Indian Standards (BIS) as some products must be subject to specific Indian quality standards. The BIS also offers pre-certification subject to production inspections.

There are around 109 products that must comply with these standards, including:

  • food preservatives and additives

  • milk powder

  • certain electrical appliances

  • some types of gas cylinders

  • cement

Find out more about the Foreign Manufacturers Certification Scheme (FMCS), at: http://indiastandardsportal.org/BISProductCertification.aspx

To understand the requirements for exporting food to India, visit the Food Safety and Standards Authority of India’s Food Import Clearance System page at: https://fics.fssai.gov.in/AOLogin.aspx

Labelling your products

Specific information must be on the label of products that are pre-packaged and imported into India for direct retail sale.

Labels and declarations must be printed in Hindi or English, and all transport documents must contain the weight and measurements of the goods.

For your goods to be cleared by customs, make sure they comply with these requirements.

Before being sold to consumers, raw materials and components will need further processing.


Product liability insurance

Product liability insurance covers the cost of compensation for anyone injured by a faulty product. If you design, manufacture or supply a physical product that is sold or given away for free, you should therefore consider taking out product liability insurance.

See the Association of British Insurers (ABI) website at: https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/liability-insurance/product-liability-insurance/ for further information, or alternatively, contact the DIT team in India at: https://www.gov.uk/world/organisations/department-for-international-trade-india#contact-us for contacts of local insurers or specialist brokers.

[Source – DIT Trade and Export guide: India, gov.uk]

 

Taxation

India has signed a double taxation agreement with the UK. This allows some taxes paid in one country to be deducted in the other, so should prevent any double tax liability from UK and Indian authorities over the same income. See: https://www.gov.uk/government/publications/india-tax-treaties.

It is possible to zero-rate the VAT on the majority of the goods you export to India, if you are registered for value added tax (VAT). This will require you to provide evidence of the export within three months of the time of sale.

Further information on VAT in non-EU markets and zero-rating conditions is available at: https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad


Corporate taxation in India

You will be required to pay corporation tax if you set up an office in India.

Domestic companies must pay 30% plus surcharges, whereas the rate is 40% plus surcharges for non-resident companies and branches of foreign partnerships. 

There are provisions for advance rulings to help investors and exporters understand their tax liabilities, as well as on the customs and excise duty implications of transactions. 

[Source – DIT Trade and Export guide: India]

 

Customs and documentation

Complying with HMRC regulations to export

To export your goods to India you must make export declarations to HMRC through the National Export System (NES). Visit: https://www.gov.uk/guidance/export-declarations-and-the-national-export-system-export-procedures for further details.

You can find out how to declare your exports to India through the NES at: https://www.gov.uk/guidance/export-declarations-and-the-national-export-system-export-procedures. You must classify your goods as part of the declaration, including a commodity code and a customs procedure code (CPC).

Commodity codes and other details applying to exports in the UK Trade Tariff can be found at: https://www.gov.uk/trade-tariff

Contact the HMRC Tariff Classification Service at: https://www.gov.uk/guidance/finding-commodity-codes-for-imports-or-exports#list-of-useful-contacts for more help.

Access2Markets, has more information regarding import tariffs, see: https://trade.ec.europa.eu/access-tomarkets/en/content/welcome-access2markets-market-accessdatabase-users

You must declare any goods that you take with you in your luggage to sell outside the EU. See: https://www.gov.uk/take-goods-sell-abroad for further information.

[Source – gov.uk]


Temporary export of goods

You can use an Admissions Temporaire (ATA) Carnet to simplify the customs procedures needed to take goods into India temporarily: https://www.gov.uk/taking-goods-out-uk-temporarily.

You will need an export licence to take dual use goods to India temporarily.

Use the SPIRE system to apply for a temporary export licence: https://www.spire.trade.gov.uk/
spire/fox/espire/LOGIN/login
.


Customs

Information about Indian customs tariffs is available from the Central Board of Excise and Customs. The Foreign Trade Policy 2015 to 2020 currently guides the country’s customs regulations. 

Generally, the value of import depends on the transaction value.

Access2Markets, has more information regarding import tariffs, see: https://trade.ec.europa.eu/access-tomarkets/en/content/welcome-access2markets-market-accessdatabase-users

If you are shipping goods to India, ensure that they are properly packed. Parcels may be handled heavily and left outside for long periods, so consider the climate in India when packing your goods. 

Documentation

You must obtain the following documents to import your goods into India:

  • bill of lading or air waybill

  • commercial invoice or packing list

  • bill of entry


Regulations

India has strict rules regarding goods and currency. You may receive a heavy penalty, such as imprisonment, if you fail to declare any prohibited items or those that are subject to tax and duties.

Visit the Central Board of Indirect Taxes and Customs (CBIC) website: http://www.cbic.gov.in/ for more information.

[Source – DIT Trade and Export guide: India, Central Board of Indirect Taxes and Customs (CBIC)]

 

Shipping your goods

You can use a freight forwarder to move your goods if you are not knowledgeable about international shipping procedures. A freight forwarder will have vast expertise and familiarity with local documentation requirements, regulations, transportation costs and banking practices in India.

The British International Freight Association (BIFA) at: http://www.bifa.org/home and the Logistics UK at: https://logistics.org.uk/ can assist in locating freight forwarders to transport your goods to India.


Posting goods

For information about sending goods by post to India, visit Royal Mail at: https://www.royalmail.com/
sending/international/country-guides/india

[Source – Royal Mail]


Shipping restricted, banned and dangerous goods

Lists of restricted and banned goods can be found on the Ministry of Commerce and Industry website: https://content.dgft.gov.in/Website/Prohibited.pdf

Certain goods are classed as restricted or dangerous. If you wish to import any of these goods into India, they are subject to special rules. For more information visit: https://www.gov.uk/shipping-dangerous-goods/what-are-dangerous-goods

You can employ a local agent who will have knowledge of the latest import licensing requirements. For information and assistance contact the Department for International Trade (DIT) team in India at: https://www.gov.uk/world/organisations/department-for-international-trade-india#contact-us.   

[Source – gov.uk, DIT, India’s Directorate General of Foreign Trade (DGFT)]


Terms of delivery

You should have a clear written contract in all international commercial transactions to minimise any risk of misunderstanding.

Incoterms are a series of widely-used commercial terms for international trade in goods, which clarify for example:

  • where the goods will be delivered

  • who arranges transport

  • who handles customs procedures

  • who is responsible for insuring the goods, and who pays for insurance

  • who pays any duties and taxes

Incoterms do not apply to the delivery of services. Contracts for the international delivery of services should include a Service Level Agreement (SLA), focusing on desired outcomes such as what the service should achieve.

International trade rules changed in September 2019, so you should check with the International Chamber of Commerce (ICC), which publishes Incoterm rules, at: https://iccwbo.org/resources-for-business/incoterms-rules, for details of the new rules, and also with the UK Government for further general advice and details about current Incoterms at: https://www.gov.uk/guidance/international-trade-paperwork-the-basics#international-trade-contracts-and-incoterms.


UK Export Finance

The UK Government’s credit agency, UKEF, wins export contracts by providing attractive financing terms to their buyers. They can help you:

  • fulfil orders by supporting working capital loans

  • get paid by insuring against buyer default

You can find out more about UKEF’s services and products at: https://www.gov.uk/government/collections/our-products.

For new business enquiries, email UKEF at: customer.service@ukexportfinance.gov.uk or telephone: 020 7271 8010 between 9am and 5pm.

For up-to-date, country-specific information on the support available, see UKEF’s cover policy and indicators for India at: https://www.gov.uk/guidance/country-cover-policy-and-indicators#india.

[Source – ICC, UKEF, gov.uk, DIT Trade and Export guide: India]


 

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