The Indian e-commerce landscape has been thriving at a rapid rate in recent years. Consequently, various web-based sellers & manufacturers have started shipping Goods from China. China has a vast pool of manufacturers of various goods, thus, importing from China seems to be a viable option for Indian entrepreneurs. But, there are various legal implications and conditions that businesses have to fulfill for importing goods from China.
Legal Implications for importing Goods from China
The first step in knowing the importing procedure is to understand the legal implications and documentation needed for importing. This will help entrepreneurs omit unnecessary delays in the importing process. Let us walk you through different licenses and documentation that are mandatory for shipping products from China.
Business Registration
Before shipping or exporting to China, you need to legalize your company in India via proper registration. Any company that engaged with EXIM business must have a legit registration with MCA. Following are the business structures available to the new business at present.
- Sole Proprietorship Firm
- Partnership Firm
- Limited Liability Partnership
- Private Limited Company
- One Person Company
Business registration seeks filing of multiple forms & drafting of legal documents. Consequently, most entrepreneurs rely on reputed service providers to address their registration formalities. Small errors occurred while form filing or uploading documents can incur unnecessary delays and hassles. Hence, it is wise to hire a trusted legal avenue to serve such delicate formalities.
Read our article:How to obtain IEC Code in India
Tax Registration
Once you addressed the registration formalities, the next step is to get registered under
Income tax department. Doing so let you pay your mandatory taxes and file return in a
timely manner on the annual basis. From the Indian law standpoint, eligible entities
must register under the GST regime by applying on the GST portal.
Once it is done, you will get a TIN which lets you pay taxes on the imported goods. Certain states need a Security Deposit from you to make sure that the business will operate in the way mentioned.
Avail Import Export Code Registration
Once you avail of the GST registration, you must proceed to the official portal of the Director-General of Foreign Trade to apply for the IEC code. This code cum license is mandatory for importing goods from China or any other nation. To avail of such a code, your establishment will need to open a current account in a designated bank.
The entire process of availing of the Import-Export code is now online. Therefore, you will need a DSC, i.e. Digital Signature Certificates for your active directors. IEC is a 10 Digit code granted by the DGFT that enables the entities to engage with EXIM business.
You will require arranging the following document to apply for IEC registration:
- Company PAN card
- Identity as well as the address proof of all partners/ directors
- Bank account statement
- Banker certificate reflecting the applicant’s credibility
Trending products to Ship from China
Selecting the right products is the key to success for any business. Hence, make sure you opt for products that are high in demand and have optimal competition. Some of the trending products to ship from China are as follows:
- Apparel & textiles
- Auto spare parts
- Smartphone components
- Electronics
- Pharmaceutical products
- Smart TVs
- Heavy machinery
- Organic fertilizers
- Plastics
- Consumer products
Key Tips for Shipping Goods from China
- Always anticipate delays and schedule the timeline accordingly to maximize overall efficacy. The key here is to avert inherent and unexpected delays as much as possible.
- Make sure you opt for a reputed freight forwarder partner who has a proven track record in the shipping line. Avoid selecting the cheapest counterpart for the sake of increased ROI. Prefer a service provider who assures seamless operations at economical prices.
- Constantly monitor your shipment and make the relevant arrangement for its arrival well before to avert delays and mishaps.
Typical Documents required for importing goods from China
Businesses engaged with Exim business need to have several documents in place to stay in the complaint. Most entities prefer connecting with legal service providers and third-party accounting to address the paperwork. The list below reflects the common documents that you must arrange for importing products from China[1]
Steps to Import Goods from China
The viable way to ship goods from China would be connecting with reputed Shipping companies like AliExpress. Here’s what you need to do for shipping goods from China via an electronic mode
- First, identify the demandable products after thorough research
- Once you select an apt product category, discover the market to identify trustable and credible manufacture or suppliers for it. You can access the services of Alibaba KKTDC and Made-in-China to identify the right suppliers.
- Next, get in touch with the supplier and draw a deal with them by fixing price, quantity, & shipping frequency.
- Since you will be pouring in considerable money in importing, start with ordering a few samples rather than a big lot to ensure the product quality. These samples will let you measure shipment time, custom requisites, and possible delays.
- Once you tie-up with a supplier, get accustomed to prevailing laws and regulations to ensure you have the right set of documents at your disposal. Moreover, visit the DGFT portal to check the legitimacy of importable products that you intended to ship from China. Knowing the list of restricted items will keep you isolated from severe penalties imposed by the customs and other governmental authorities
- Next, get in touch with a freight forwarder or NVOCC to administer your shipments. Also, do not forget to coordinate with custom agents to manage the legal documents linked to the importation of goods.
- Once you secure a list of products and suppliers, get the pinpoint estimation on the landing cost of the product. Make sure to take shipping charges and customs duty into account while doing the same. If your landed cost surpasses the projected expenses, identify other suppliers or carries who offers affordable services
Conclusion
The liberalization of trade has allowed many businesses to conduct seamless cross-border trade and earn more revenue. For years China has remained a center stage of global trade for many businesses across the globe. Importing goods from China would be a good choice for anyone who seeks to secure a good profit margin under immense competition.
Read our article:Advantages of Obtaining IEC (Import Export Code) Registration in India
