Import Baby Toys from China
A Complete Guide: How to Import Toys from China?
How to Import Baby Toys from China, is the first question which arises in the mind of an Importer to start the procedure of import from China.
Today, toys are the major companion of the children. They don’t only play with them, but also learn a lot of things. The market is flooded with toys of various kinds which are designed to suit different age groups of children and also meet various requirements in different age groups. Chinese toys have taken over most of the world and it is the major source for imported toys in India with an almost 75 percent share. The Import Toys from China in India have reached to a level of approx. Rupees 2000 crores during the year 2013-14 thereby increasing @ 21 percent from 2012-13. Chinese manufacturer and suppliers have the capability to significantly undercut prices offered by a foreign competitor over a wide range of products. Today, as a result of the “China price” China has captured over 70% of the world market share for toys.
Selecting the Commodity: Importers should select their gifts and toys as goods only after considering various commercial factors as well as regulations contained in the EXIM Policy. Import of restricted products is permitted only through licensing.
Selecting the Overseas Supplier: Importers can Import Baby Toys from China and any country of the world and the information regarding the suppliers can be obtained from various, generals, international trade fairs and exhibitions and trade directories Consulate chamber of commerce.
Capability and Creditworthiness of Overseas Supplier: Successful completion of the transaction of imported goods mainly depends upon of the overseas supplier’s creditworthiness and capability. Therefore, it is necessary to verify the Capacity of the supplier to fulfill the contract through confidential reports about him from the banks and Indian embassies abroad.
Role of Overseas Suppliers, Agents in India: Some reputed and renowned overseas suppliers have their agents stationed in India. These agents take orders from the Indian firms/companies and arrange for the supply of goods from their principal abroad. Therefore, it is advisable to import through such agents as they can be readily contacted in case of an emergency or if there is any dispute regarding the quality or quantity of, receipt of payment, documentation formalities, etc. of imported goods.
The inquiry, Offer and Counteroffer: It is advisable that before finalizing the terms of import order of goods, one should call for the samples and other specifications of the items to be imported. Then after satisfying himself with the samples and specifications, the importer should proceed to finalize the terms of the contract to be entered into.
Procedures to Import Toys from China
Requirements Common to Import
Registration to act as an Importer: Government registration is required to act as an importer in India. Foreign Trade government is responsible to issue such authorization to become an importer. In India, IEC number (Import Export Code Number) is obtained from the office of Director General of Foreign Trade office to operate as an importer and exporter as well as all the matters related to import/export in India. Registration procedures to act as an importer are a one time process, but renewal may be required as per the terms and conditions of foreign trade office of India. So the importer of Baby gift items and toys is also required to contact concerned government agencies to verify whether such onetime registration is necessary or not.
Procedures to import: As per the mutual agreement between importer and exporter, the import shipment has taken place. Pricing, quality specifications, terms of payment, term delivery, documentation, and mode of transport and other terms and conditions are agreed and mentioned in the purchase order and import shipment of Baby gift and toys is affected accordingly.
As you know, importation of goods requires necessary import documentation and customs clearance procedures for importing country which has to be completed either by an importer’s customs broker or by importer directly. To Import Baby Toys from China, import entry documents along with carrier’s document (Bill of Lading /Airway bill), commercial invoice, packing list, certificate of origin, and other required documents are filed and necessary import procedures are completed to take delivery of imported goods.
Certificate of Origin: The source of origin of Import Baby Toys from China is required in almost all countries especially in India. So a certificate of origin issued by approved authorities at exporting country is required to Import Baby Toys from China. Certificate of origin helps importer to determine the origin of imported goods to avail exemption on import duties and taxes.
Restriction to import: Some of the goods are prohibited to import in some countries based on their foreign trade policy on imports. So it is necessary for the importer to check the requirements of the import of their products before placing an order with the overseas buyer.
Bilateral and Unilateral agreements: The two countries may have bilateral, multilateral, and unilateral agreements which exempt documentation and rates of import tax and duties. The importers have to collect accurate information from necessary government agencies before they Import Baby Toys from China.
Toy Safety Regulations, Labeling and Testing Requirements
Toy Safety means ensuring that toys, especially those made for children are safe, usually through the application of set safety standards. In India, commercial toys must be able to pass safety tests in order to be imported and sold. Now, we explain what importers must know about Toy Safety Regulations, Labeling, and Testing Requirements. In addition, we also explain why compliance with overseas standards and directives cannot be taken for granted when sourcing manufacturers in China.
Toy Safety Regulations
Specific safety standards and substance restrictions apply to toys, and other children’s products, in most developed countries like India. The scope of products fitting the definition of a toy, or a children’s product, is wide. That said, most applicable directives and standards can be grouped in at least one of the following categories:
- Physical / Mechanical Properties
- Substance Restrictions
- Electrical Safety Regulations
The regulations refer to ASTM and ISO standards, of which the importer is required to ensure compliance. The assessment, both on applicable standards, and a supplier capability to comply must be made before mass production begins. Never rely on the supplier to make such an assessment, as it’s always the importer that is ultimately responsible for ensuring compliance.
In addition, to product and substance regulations, importers must ensure compliance with all applicable labeling requirements.
Labeling requirements are a part of Toys and Children’s Product Standards, applicable to several product categories. Below follows an overview of what may be required, but beware that labeling requirements differ in differing countries.
- Country of Origin (e.g. ‘Made in China’)
- Warning Labels (e.g. Loose parts)
- Other marks (e.g. ISO)
As already said, importers shall never make the assumption that the supplier is already aware of a product must be labeled, according to regulations in a certain country. Instead, the buyer/importer must provide all the necessary documentation directly to the supplier/exporter.
Compliance Testing and Certification
A Certificate or a substance test report is only valid when a material sample, submitted to the testing company. Changing a material, for example, a button or fabric may render a product non-compliant. Therefore, the importer must go through the compliance procedure each a product is made.
As testing costs are multiplied by the number of materials and components, in addition to batch specific testing, compliance costs increase with variety. This practice force importer to limit the number of different materials, colors, and components.
Decide a Category to Import Baby Toys from China
Decide what to sell: There are many categories of toys manufactured in China. However, it’s hard to categorize some as toys. Here are following categories of toys:
- Remote control toys
- Diecasts & Toy Vehicles
- Toy Figures
- Doll& Stuffed Toys
- Classic Toys
- Learning & Education Toys
- Outdoor & Playground Toys
- Models & Building Toys
- Baby Toys
- Puzzles & DIY Toys
Where to Find Toy Manufacturers and Suppliers in China?
Most products made in China have their own places of origin, so does toys and gifts. No matter you are in China or not, or you are searching suppliers on the Internet, you need to pay attention to where the suppliers are located. Toys made in China are mainly produced in the following 5 places:
- Chenghai, Guangdong Province: It is the world’s capital of Toys.
- Yiwu: It is the place where Low-Value and Small Toys Are Mainly Produced.
- Yangzhou/Qingdao: It is the place where Plush and Stuffed Toys Are Mainly Produced.
- Yongjia, Zhejiang Province: It is the China’s Capital of Learning and Playground Toys for Kids.
Problems May Arise When Import Toys from China
Toy products are usually used by children; so many countries have strict rules and regulations for toys. Today, toys, products still have other problems that make it little more complicated than other products, and there are several main problems you may have when Import Baby Toys from China.
The problem of Compliance and Safety: Certificates and safety are the biggest ones among all problems, and different countries have different standards for imported toys. The Indian Standard Safety Requirements for Toys are given here- http://dgft.gov.in/exim/2000/cir/cir08/cir9508.htm
Commodity Inspection by China Custom: Toys need commodity inspection when exporting to other countries, the cost is $200-$300 for 1 container. If you ship by LCL, and the cost depends on the material and the volume of the toy, usually more than approx. $100.
The problem of Design, Infringement: Many manufacturers like to print some animation characters in their toy products, some make the shape same as these characters. For example, two same bags, one has minions printed on it, but another doesn’t have, then the former one will be sold at a higher price than the latter, and people still prefer to buy the former. So if importers want to Import Baby Toys from China with famous animation characters printed, you need to make sure whether your supplier has the authorization.
The problem of Shipping Toys from China: Sea shipping is the most economical and convenient way for toys because the weights of toys usually are light, and the product size is always big. If you import less than 3 CBM toys each shipment, then you’d better buy from the local market, instead of importing from China directly, as the average cost for each toy product will be very high, including freight, and commodity inspection.
Benefits of Import Baby Toys from China
- Flexibility: Chinese manufacturers are flexible, and this is an important skill and part of their competitive advantage in the global market.
- Potential: China is a one-stop-shop place. You find all, in one place and there is a wide choice of potential partners: many toy factories.
- Compliance: Toy importers have to respect a lot of standards and regulations, but in China, they found that toy suppliers are sensitive to it. Professional Chinese factories/industries are manufacturing good quality products, in compliance with the toy safety regulations.
- Low Labor cost and taxes: The labor cost and tax levels are too low in China. These conditions make China the leader in toy manufacturing.
- The corporate system: China’s manufacturing unit does not work in isolation. China has cultivated an ecosystem that includes low-wage laborers, skilled workers, component manufacturers, and assembly providers.
MOQ Requirement and How to Lower it?
Certain products are not meant for small volume importing. These products are electronics, toys, cosmetics, and chemical products. A major issue for small volume importers is the MOQ requirement of the product. Many Chinese suppliers require a minimum order of 500 to 1000 pieces per product. If this would’ve been for the total order, it could’ve been quite acceptable and reasonable for a small business. However, 500 pieces per product times a few different products in various shapes, size and colors equal a huge minimum order quantity. The MOQ requirement is not a matter of negotiation. The supplier will lose money if they produce less, so you need to come up with something else. This can be termed as “streamlining usage of components and materials”. That means that you should reuse materials and components on as many products as possible, and thereby create variation.
How to Ship Cargo from China When Buying Small Quantity?
Shipping is really a big problem for small quantity buyers. Sometimes small quantity buyers have to give up importing from China because express is the only way to ship, and it’s too expensive.
International Express and Air Freight
International expresses is suitable for importer whose cargoes is under 300kg, while air freight is suitable for cargoes over 300kg. But air freight needs the same import & export processes as sea freight and you also need to pick up your cargo at the airport. Hazardous goods such as liquid, power, and products with the battery cannot be shipped by air in cargo.
LCL companies are the best choice for small quantity buyers. They are specialized in certain ports or areas and offer all-in price shipping service. They handle all customs and shipping process, you just need to pick up your cargo in their warehouse, or sometimes they deliver to door service. Their price is very low, even you ship 0.5CBM, because the container is shared by 10 to 50 clients.
How to know the quality, quantity, or contents of goods before Import Baby Toys from China?
In India, a legal document called Bill of Entry has to be filed with Customs Department. After filing Bill of Entry the importer itself or customs broker requests the concerned custom appraising officer to mark open examination order. After obtaining the order, the customs broker or importer approaches the customs personnel to inspect the cargo. Then, the goods are inspected completely as per the requirements and prepare a report on examinations of goods. The samples of each product are also drawn for quality checks, once after satisfying the quality, quantity, and contents of the consignment, the importer can proceed further in completing import customs clearance procedures to take delivery of cargo.
Import Customs, Duty and Taxes
Basic duty: It is the typical tax that applied to all imported goods. The basic customs duty on imports of Baby gifts and toys is off 10%.
Countervailing Duty: In addition to basis duty, a CVD is also applied to imported goods. This duty is equal to the rates of excise applied to all goods manufactured in India. The CVD on the import of Baby gifts and toys is 12%.
Special Additional CVD: It is also known as special CVD, which is applicable on all goods/items. And it is levied at the rate of 4% on Baby gifts and toys.
Education Cess: It is a tax design to fund education and healthcare initiatives. Central Education Cess is levied 3% and Custom Education Cess is also levied 3% on Baby gifts and toys.
GST (Goods and Services Tax): When goods are imported into India, IGST (Indian Goods and Services Tax) will be applied to the value of goods. The amount of GST on imported goods depends on the HSN (Harmonized System of Nomenclature Code) of Baby gifts and toys. The GST on Baby gifts and toys HSN Code is given under chapter 95 (Tricycles, scooters, pedal cars and similar wheeled toys; doll’s carriages; dolls; other toys; reduced-size (scale) models and similar recreational models, working or not; puzzles of all kinds).
- TC95030010 Of wood
- ITC95030020 Of metal
- ITC 95030030 Of plastics
- ITC 95030090 Other
12% GST RATE on Import Baby Toys from China:
- Toys like tricycles, scooters, pedal cars, etc. (including parts and accessories thereof) [other than electronic toys] .
- Playing cards, chess board, carom board and other board games, like ludo, etc..
18% GST RATE on Import Baby Toys from China;
- Electronic Toys like tricycles, scooters, pedal cars, etc. (including parts and accessories thereof) .
28% GST RATE on Import Baby Toys from China;
- 9504 Video games consoles and Machines.
Hire a professional custom clearing agent/broker who will take care of all the documents related to import/export and also take over the responsibilities of calculating and payment of taxes, duties, excise, handling charges, transportation cost, etc.
Major Chinese Suppliers
- Wenzhou Times Co. Ltd
Location: Zhejiang, China
- Richforth Gift &Fashion Accessories Company
Location: Fujian, China
- Dongguan Rongheng Electronic Technology Co. Ltd
Location: Guangdong, China
- Jinjiang Kaifeng Co. Ltd
Location: Fujian, China
- China Changzan Import & Export Co., Ltd
Location: Zhejiang, China
- Dongguan Yi Kang Plush Toys Co., Ltd
Location: Guangdong, China
Custom Clearance Procedures in India
All goods imported into India have to pass through the customs clearance after they cross the Indian border. The imported goods are examined, assessed, evaluated, and then allowed to be taken out of customs charge for use by the importer. The procedures for Customs clearance for goods imported in India are as follows:
Import Manifest: As per the section 30 of the Customs Act, 1962, the persons who are in charge of carrying imported goods/products should hand over, within 24 hours of the arrival of the conveyance, an import manifest to the customs. The manifest is a complete list of all goods/products the conveyance carries on board, including those to be transshipped and those to be carried to the ports of call.
Entry in the Import Department of Customs House: On receipt of information regarding the arrival of the goods/products, the importers or customs agents/broker information to make an entry by filing a Bill of Entry, in the Imports Department of Customs House.
Clearance of Goods: After payment of duty, the importer gives the duplicate copy of Bill of Entry on which order for examination of the goods is given by Customs and get the goods examined. If the description of the goods is found correct, on the basis of declared particulars, then the clearance of goods is allowed.
Warehousing the Goods: The imported goods, warehoused at the port of shipment, without the payment of duty just by presenting a “Bill of Entry for Warehousing”. The warehoused goods can be cleared in one or more installments.
Foreign Exchange: Once the importer is allowed to remit foreign exchange out of the country. Then importer has an obligation to import the permitted goods. If goods/items of lesser values are imported then it would lead to leakage of foreign exchange.
Cargo handling is also required in the destination before it can be released to a consignee. In short, destination handling refers to transfer of the container from the ship to shore and from the port to the forwarder’s destination warehouse. It also includes un-stuffing of the container and preparing the cargo for the consignee to collect the goods.
Letter of credit: It is the well-known method of payment in International trade. Under this, importer’s bank guarantees to the supplier’s/exporter bank that the bank will pay given the amount in the agreement, once the supplier meats the terms and conditions given in the letter of credit.
Bank Drafts and Cheques: It is a payment order issued by an importer’s bank on its own branch. The bank draft is then handed over to the buyer who sends it to the beneficiary. The beneficiary obtains/receives payment on presentation to the bank on which the bank draft is drawn. Bank drafts and cheques are the most popular methods of remittances.
Bill of Exchange: A bill of exchange is an order issued by the exporter and sent to the importer through a commercial bank. Bill of exchange is also a known method of payment.
Telegraphic Transfer (TT) This is a method of foreign payments in which importer through telegraph transfers the funds to the overseas suppliers. The money is deposited with the commercial banks in India. The Indian banker sends a telegram to the foreign branch to make payments to the exporter/supplier, on that very date. Then, the foreign branch makes necessary payments in foreign exchange to the supplier. Telegraphic transfer is the quicker and common method of transmitting funds and involving no risk.
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