Importing from China & selling online In India – Deal, no deal?

Thanks to the affordability of Chinese products, importing and selling them in India, US and other countries is considered a very profitable business. One can read many success stories of people across the world that make their living by importing from China and selling in their own country.
So if you are an Indian Online Seller thinking about importing in bulk from China and selling in India, read below to understand the nitty-gritty.

Basic requirements

The basic legal requirements for importing goods are:

• Registered Company

• Active Bank Account

• Import-Export Code (IEC)

• TIN number

Additional certificates are required if you are importing certain goods. For example, for product categories that fall under automobile tires, cement, dry cell batteries, electrical household appliances, food products, LED lights & fixtures, medical equipments, steel tubes, wire & cables, and few electronic products, BIS (Bureau of Indian Standard) Product Certificate is mandatory.
An importer has to file a Bill of Entry, which is basically declaring all possible details of the trade, i.e. nature of the product, exact quantity and value of goods.
Failure to adhere to it will result in delay during customs’ clearance process.

Taxes

Number/types of taxes applicable on imports will differ from product to product. Some general applicable taxes are listed below:

• Basic custom duty

• Import duties and other taxes calculated based on the CIF (Cost, Freight and Insurance) price

• Landing charges

• Countervailing duty (CVD)

• CESS

Hire a professional customs clearing agent who will take care of all the documents and/or electronic submissions. He/she also takes over the responsibility of calculating and payment of taxes, duties, excises, handling charges, transportation cost and communicating with authorities.

Restrictions

You must have heard about the ban on Chinese firecrackers. But it is not the only product that one can’t import.

Certain items are prohibited and restricted for import in India from any country. Some of the prohibited items include articles of apparel and clothing accessories of wild animals covered under Wild Life Protection Act -1972, mobile handsets without International Mobile Equipment Identity (IMEI) number or with all zeroes IMEI, narcotic drugs, counterfeit and pirated goods.

As for restricted ones, it includes fire arms, a host of animals/parts, ivory, waste & scrap. View the complete list of restricted & prohibited import items on Directorate General of Foreign Trade website.

There is no restriction for selling products imported from China on Indian ecommerce sites, as long as you stay away from selling prohibited/restricted items and follow the legal route.

Dos and Don’ts

Besides manufacturing affordable products, China also has a reputation of churning out knockoffs. Therefore, while importing from China, risk of getting knockoffs and not getting what you ordered is high, if one is not careful.
Below is the list of some tips, tricks, advice and friendly warnings we accumulated from various sources such as Quora and particularly this very insightful blog by Will Mitchell.

• If travelling to China in the search of a supplier is not an option, then Alibaba appears to be the most trusted portal to import Chinese products online

• Even on Alibaba, opt only for the suppliers with ‘Gold Supplier’ tag

• Go through the search filters of the online portal carefully and narrow your search to zero down only on the best & safe offers

• Always ask for samples first before placing bulk order

• Don’t pay with any other method but PayPal, at least for the first 6 months

• A company that won’t accept Paypal, stay away from it

• Stay away from trading in counterfeit/fake products no matter how tempting it is or how harmless it looks

• Conduct stress test on your sample product to get a fair idea about its quality and strength

• Negotiate hard

• Get all the terms, product details and other conditions in writing

Buy from China or Made in India?

There’s no straight answer to this as we are talking from a business perspective. China’s sheer ability to manufacture high volume products & scale up while maintaining the quality and affordability factor gives it an edge over India. Indian manufacturing plants don’t have the capacity to handle sudden surge in demand. No wonder China is called the ‘manufacturing hub’ of the world.
Many ‘Made in India’ products are just assembled in India whereas components are sourced from China. India also ranks lower than China in terms of ‘ease of doing business’, courtesy better infrastructure, labour and technology.
Of course things are changing. India’s ‘Make in India’ campaign is working towards making our country a favourable place to manufacture products. Loads of FDI is flowing in our country. Devaluation of Yuan opened a window for India.
But until concrete results are seen, Chinese products it is for online sellers. Keep your hands clean though. Buy only affordable & profitable products, not substandard & illegal ones and dump in India because it will come back to bite you later.