A Complete Guide to Import Electrical Goods from China
Here is a complete guide on how to import electrical goods from China.
COMMON REQUIREMENTS TO ACT AS AN ELECTRICAL IMPORTER IN INDIA
Registration to act as an Importer:
Government registration is required to become an electrical goods importer in India or to act as an importer. Foreign Trade government office of India 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 in India. Registration procedures to act as an importer are a onetime process, but renewal may be required as per the terms and conditions of such foreign trade office of a country. In India, the information on registration for importer – exporter is linked with customs location and reserve bank, as the process of imports and exports are online digitalized. So the importer of Electrical goods is also required to contact concerned government agencies of their importing country to verify whether such onetime registration is necessary or not.
Procedures to Import
As per the mutual agreement between buyers in India and seller in China, the import shipment is taken place. Pricing, quality specifications, terms of payment, terms delivery, mode of transport and other terms and conditions are agreed and mentioned in the purchase order and import shipment of Electrical goods is affected accordingly.
Under importation of electrical goods, essential import documentation, and customs clearance procedures at importing country i.e. India have to be completed either through importer’s customs broker or importer directly as per foreign trade policy of India. For import Electrical goods from China also, 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 under Electrical goods. Nowadays, necessary information is filed online and produces required documents at the time of inspection, assessment, or delivery of import of goods at destination customs location.
Certificate of Origin to Import Electrical Goods from China to India
The source of origin of imported Electrical goods is required in India. So a certificate of origin issued by necessary approved authorities in China is required to import Electrical goods. Certificate of origin helps to determine the origin of imported goods to avail exemption on import duties and taxes. Different unilateral, multilateral, and the bilateral agreement between India and China also allows imports and exports with the exemption of import duties wherein Certificate of Origin is the primary proof on country of origin of imported goods under Electrical Goods.
Bilateral and Unilateral Agreements Under Importation of Electrical Goods
India and China may have bilateral, multilateral, and unilateral agreements which exempt documentation and rates of import tax and duties on some electrical products. The importers have to collect accurate information from necessary government agencies before the import of Electrical Goods.
Prohibition to Import
Some of the electrical goods and materials are prohibited to import in India based on their foreign trade policy on imports. So importer needs to cross check the requirements of import of their products before placing an order with the Chinese supplier.
THE STEPS OF IMPORTING ELECTRICAL GOODS FROM CHINA TO INDIA
Step1. Establish a Partnership with Chinese Supplier
Initiate and establish contact with Chinese electrical products suppliers. Inform them about your company. Most of the major producers in China already have importing partners so better select renowned corporations. For supplier qualification schemes importer should determine how long they have been in the manufacturing sector and additionally the number trade shows they have attended.
Step2. Mutual Agreements
An electrical products buyer should examine the quality of the items and discuss all the provisions concerning shipping and pricing of the goods. The importer must try to place a trial order so that it will confirm their collaterals, packaging, insurance terms, and other guidelines regarding the electrical products.
Step3. Learn Trade Terms
The most frequently used terms are FOB (Free on Board meaning the cost for the products include freight cost to the destination country) and CIF (Cost, Insurance, and Freight meaning the price of the products include insurance as well as freight costs towards the destination). The importer must verify all details with Chinese distributor or supplier so they can execute risk assessment and additionally confirm approximate landing costs. Also, seek assistance from an Import Management Company and a freight forwarder for a detailed cost breakdown and for other documentation.
Step4. Payment Schemes and Negotiation
Most frequently, Chinese suppliers will collect a fraction of the total cost of the products during the ordering stage and the other half when the merchandise is shipped. Importers can further negotiate these payment schemes.
Step5. Meet the Regulatory Requirements
Importers are required to verify his/her shipment meets all the safety and regulatory standards. The importer should at least need to be compliant with basic regulations.
Step6. Opt for a Reputable Customs Broker/Agent and Forwarder
India has local trade organization/association having a list of trustworthy forwarders. It is advisable to import through such agents and forwarder as they can be readily contacted in case of an emergency or if there is any dispute regarding quality or quantity of electrical products, receipt of payment, documentation formalities, etc. of imported goods.
Step7. Place a Trial Order/ Order a sample
This trial order is a test run that any importer can make to ensure everything goes well for the bulk importation of the electrical goods. In the trial purchase order, it is needed to write specifications about all goods you are importing i.e. electrical products specifications, packaging requirements, as well as trade information.
Step8. Hire a Product Inspector
The importer must employ quality assurance agents to scrutinize the electrical products during the fabrication stage. The importer can also ask his/her individual QA personnel if it is possible to examine the assembly area as well.
Step9. Transportation and Customs Clearance Process
The transportation of ordered electrical goods will be handled by your chosen forwarder, while the customs broker will manage with customs certificate.
Step10. Keep the Records
As soon as importer receives the electrical goods, make sure to keep the records pertaining to the transactions.
Step11. Check the Authenticity of Your Products
If the importer buys the electrical products through a reseller in China, call up their main manufacturer to verify the authenticity of their items.
Stipulations to Import Electrical Goods from China
CVD on RSP Based Valuation for Import of Some Items Under Electrical Goods
Some of the items under electrical fall under RSP based valuation to estimate import tax. CVD is calculated on the basis of RSP based valuation to determine import duty. RSP means retail sale price, the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is the sole consideration for such sale.
Air Emission Standard
Import of some of the items under Electrical goods is subjected to emission standard of the environment protection rules of India. The importer of such product has to contact the necessary government agency to collect accurate information.
Quality Standard of Importing Country
Import of some of the items under Electrical goods needs the quality standard approval of government agencies in India. Importation of such items is subject to their compliance with said quality approval certificate from the quality approval authorities of India.
Anti-dumping Duty to Import Electrical Goods
Some of the importing items under Electrical goods importing from China attract anti-dumping duty. The reason for imposing anti-dumping duty is for rectification of trade distortive effect of dumping and reestablishes fair trade. World Trade Organization WTO members as per GATT (General Agreement on Tariff and Trade) allow their member countries to take an individual decision on imposing such anti-dumping duty to ensure fair trade rather than protecting domestic industry.
MOEF Permission from Environment Department
In India, environment department regulates importation, consumption, and usage of materials affecting the environment. Permission from such environment department of importing country is necessary to import some of the items under Electrical. In India, Ministry of Environment, and Forest (MOEF) is the authorized government agency to regulate such materials including importation.
Foreign Trade License
As a part of importing norms, India insists Foreign Trade License issued by foreign trade office of importing country to import some of the specific items under Electrical. The importer may kindly contact whether their product intended to buy may fall under the said category of Electrical Goods.
Test Report of Analysis from Laboratory
For the purpose of importing Electrical products, the importer must obtain a test report from laboratory authorized or governed by China is required. The necessary sample of imported Electrical products is drawn as per the procedures and rules of India and submits to such authorized laboratory and obtains analysis report. Normally three sets of samples of importing Electrical goods are drawn and forwarded to laboratory notified by environment and forest department. Test report retains for minimum two years to confirm on obligation fulfillment by the importer on the importation of Electrical articles. Such certificate is submitted with customs location of India to process importation of Electrical Goods. If non-fulfillment of obligation by the importation of Electrical products, the importer should re-export the hazardous waste within 90 days from the date of arrival into India as per hazardous waste management, handling, and transboundary rules.
Electrical Product Development and Customization
Chinese manufacturers don’t offer free product development services. The buyer is always expected to provide all relevant technical specifications, regarding electrical products, including the following:
- Cable shielding
- PVC cable
- Other (woven, bare, metallic, etc.)
What you Need to Know Before Import Electrical Products from China to India
The electronics industry is highly concentrated in three regions are Guangdong province, Inner Mongolia Autonomous Region and Shanghai. Electrical manufacturers, regardless of product, are not all equals. The industry is crowded with everything from minor traders and agents to large-scale manufacturers. Many factories don’t consist of much more than two to three assembly lines, staffed by 50 to 100 workers. When you select an electrical manufacturer, regardless of whether you buy ODM or OEM, you must consider the following:
Regulatory Compliance: Compliance with applicable safety standards and directives (e.g. FCC Part 15, RoHS and the WEEE) is mandatory when importing electronics to India. Most Chinese manufacturers cannot ensure compliance, and therefore previous compliance (e.g. Test reports and technical documents) must be verified before selection. Making compliant products’ requires more costly components as compared to those electrical products that are not made according to comply with strict safety standards and regulations.
Production Capabilities: Some suppliers put together assembled PVC cables, casing, and other components, purchased directly from subcontractors. Other manufacturers, however, design and assemble in-house and some may even refine and cut cables, silicon, and other materials used in their products. Working with the latter type of electrical manufacturer makes it easier to develop new products, and customize existing designs. It also makes it easier to resolve design and functional flaws, which is to be expected when developing new products.
Quality Management System (QMS): A QMS (e.g. ISO 9001:2008) is applied to all electrical goods to track quality and prevent quality issues throughout the production process. Quality issues can multiply rapidly, and ruin an entire product unless testing is carried out continuously on the assembly lines. Most electrical manufacturers have at least one or two testing stations, but few comply with comprehensive Quality Management Systems, such as ISO 9001:2008. Spending more time on quality management on electrical products comes at a cost, therefore resulting in such suppliers quoting slightly higher prices. Yet, a reduced defect rate often makes it a wise investment.
Safety Standards & Labeling Requirements to Import Electrical Products from China to India
As already said, previous compliance is critical when selecting an electrical manufacturer. Most Chinese suppliers lack the technical capability, knowledge, experience and subcontractor network required to ensure compliance with India’s safety standards and regulations. The ‘compliance rate’ differs between industries, but less than 5% of the suppliers can ensure compliance, in most Chinese industries. Suppliers with the capability and experience to ensure compliance often share the following characteristics:
Main markets: Many suppliers focus on the domestic Chinese market, while others are geared towards Asian countries like India, therefore not giving them an incentive to comply.
Large registered capital: Chinese Suppliers with a large registered capital (> RMB 4,000,000) tend to be more sophisticated than smaller suppliers. Machinery and equipment may also be included in the registered capital.
Price: Ensuring compliance with electrical safety standards regulations comes at a cost. Electromagnetic shielding, RoHS compliant components, and lead-free paint cost more money to procure.
When import electrical products from China, you may need to ensure compliance with more than just one regulation or directive. There are primarily four types of regulations to consider:
- Electrical safety standards/directives
- EMC standards/directives
- Substance regulations (applies to plastic cases and components)
- Labeling requirements (e.g. WEEEand ‘Made in China’ markings)
Neglecting electrical safety regulations, or hoping for the best, are not an option. Importing non-compliant products is illegal. Cheap and substandard, therefore non-compliant, electrical products can cause electrical and fire hazards.
Compliance and safety of electrical products come at a cost and is not a matter of negotiation. Some importers assume that the manufacturer is ultimately held responsible, but that is not the case. It’s up to you to ensure that the electrical items are compliant, and provide the necessary documentation (e.g. Declaration of Conformity and Test Reports) to prove so.
STANDARDS AND REGULATIONS TO IMPORT ELECTRICAL PRODUCTS FROM CHINA TO INDIA
India is not only a rapidly developing country but also the fastest growing market. However, its product regulations and labeling requirements are fairly well established. There’s the bureaucracy that makes confirming applicable electrical product safety standards, and labeling requirements.
BIS (Bureau of Indian Standards)
BIS have developed different product standards, applicable to a wide range of products. Electronics, Electricals, and machinery are all covered by the BIS Product Certification Scheme.
While BIS certification is not mandatory for all products, buyers of the following products need to ensure compliance with at least one applicable standard:
- Electrical Goods
- Food & related products
- Diesel Engines
- Oil Pressure Stoves
- Automobiles Accessories
- Steel Cylinders and Regulators
- Medical Equipment
- Steel Products
Indian importers must confirm if their electrical product is applicable to mandatory BIS certification before ordering from a Chinese supplier.
IS (INDIAN STANDARD)
In India, BIS certification is not a uniform standard or directive that applies to all electrical products. Instead, electrical products are regulated by a specific IS (Indian Standard).
As of today, there are 18,773 IS standards, some of which are under revision. Also, there are both mandatory and non-mandatory Indian Standards (IS). The Importer may still decide to ensure compliance with applicable Indian Standards (IS), even if it’s not legally required.
IS standard regulates various aspects of different products, including substances, heavy metals, electrical safety, currents, voltage, and metallurgy. The specific Indian Standard (IS) requirements for your electrical product can be purchased from the BIS website.
In India, the ISI mark is printed on electrical products compliant with the applicable IS standard. Thus, it’s part of the scope of IS regulations and not a separate product directive.
Many IS regulated items may carry the ISI mark, but non-compliant items (even those where IS compliance is not mandatory) shall not carry the ISI mark. Thus, importer need to secure IS compliance before sending their ISI logo files to your Chinese manufacturer.
How BIS Regulations Apply to Indian Importers of Electrical Goods
BIS was initially intended to regulate products that manufactured in India. Thus, many government websites in India tend to refer to the manufacturer as the party responsible to ensure IS compliance. However, that doesn’t apply to foreign manufacturers (e.g. Chinese).
When an Indian electrical importer, bring in items from China, he is responsible to ensure compliance with the applicable IS standard – not the Chinese supplier.
In order to obtain BIS certification, the importer must submit product’s component and material samples for pre-production certification to a BIS accredited laboratory. In many cases, the sample testing is also followed up by an inspection, executed by BIS offers, in the Chinese manufacturer’s production facility. All expenses shall be covered by the importer.
If your electrical product and the manufacturer pass the tests, you’ll obtain a BIS certificate. If the product testing and inspection fail then additional testing and factory inspections may be required, if requested by BIS.
Securing Compliance When Import Electrical Goods from China to India
Chinese manufacturers may never hear of BIS, Indian Standards (IS) or the ISI mark. Compliance with a certain standard requires that the Chinese supplier has access to relevant IS files, outlining the technical specifications the product must meet in order to obtain certification.
But not all suppliers are capable, or even willing, to comply with IS technical specifications. If Indian Standard (IS) compliance is mandatory for all electrical products, importer better source suppliers that can show previous compliance. Otherwise, the importer might end up in an endless product development process leading nowhere. That said, Chinese manufacturer’s advertising IS compliance are few and far in between.
In case you cannot find IS compliant suppliers, the importer should at least look for suppliers, advertising EU or US compliance, as these suppliers are more likely to possess the technical skills required to ensure IS compliance.
India RoHS and WEEE
In 2012, India adopted regulations modeled on the European Union RoHS (Restriction of Hazardous Substances) and WEEE (Waste Electrical and Electronic Equipment) directives. RoHS regulates heavy metals in electricals, including lead and cadmium, while the WEEE directive requires manufacturers and importers of electrical to pay a yearly fee covering the collection and recycling of electric waste.
These regulations are aimed at electrical manufacturers in India but many of which are already compliant with the European Union versions of these directives, importers are also required to ensure compliance. In 2012, electrical suppliers were given two years to comply. Thus, the directives are supposed to be fully implemented by manufacturers in China and importers in India.
These regulations are among the most sophisticated product directives implemented by India and are certain to have a major impact on the electrical industry.
Indian electrical importers must comply with rather a stringent marking and labeling requirements. Indian importers failing to comply may have their cargo seized by customs authorities, and relabeling exporting cartons and product packages is only possible if such a request is granted. So, let’s look into these labeling requirements. Below follows a list of items that you must include:
- Product name and description
- Net weight
- Date of Manufacture
- Your address
- Maximum retail price (MRT), including taxes
- Batch ID
- Month and year the product was imported
- Country of Origin
- Certain types of products must be labeled with the sizes and Country of Origin (e.g. Made in China) on the items themselves.
Electrical companies/ manufacturers are required to label their products with a certification tag before being allowed to import in India. Earlier, labeling requirements had allowed manufacturers to simply label their products through stickers. According to the new requirements, some electrical goods may require the Chinese manufacturers to “screen print, emboss or engrave” the certification statement onto the product and printed on the packaging material.
WHAT IS MOQ WHEN IMPORT ELECTRICAL GOODS FROM CHINA
If you are successful in quoting in China, you should receive a quotation sheet with MOQ requirement or term from Chinese supplier or manufacturer. MOQ or Minimum Order Quantity means that supplier is unwilling to sell the electrical product to the buyer if he or she places a purchase order but can’t reach the requirement of the lowest quantity of each electrical product.
MOQ is a rule from real manufacturers due to they think they may get a loss if they sell the products to you less than the certain quantity. No matter where you purchase electrical goods/products in China, import from manufacturing company directly, or hire a sourcing services company and sourcing agent to help you, there is still minimum order quantity requirement. MOQ depends on the type of electrical product, but normally around 50 to 100 pcs, per product. While many wholesalers may offer MOQs as low as 15 to 20 pcs per product, such products are non-compliant and even be dangerous.
VALUE OF IMPORTING ELECTRICAL PRODUCTS FROM CHINA TO INDIA
China has been experiencing tremendous growth in GDP, manufacturing, exports, and other economic sectors. More than ever, importing electrical products from China can produce both immediate and long-term profit to Indians importer.
Benefits of Importing from China
As long as, importer follows customs regulations, can often buy bulk electrical goods from China at the cheaper price and lower taxes. This is because importer is essentially acting as an independent retailer, buying products directly from the manufacturer and importing them to his own country. Moreover, China requires no special licenses or permits to purchase electrical goods, as long as importer follow national and international trade regulations are free to import electrical goods in any quantity.
Importing from China allows having direct control over business’s distribution model. You might consider selling your products online. This gives importer a level of flexibility that a major retailer does not have.
Because China’s manufacturing sector has experienced a prolonged, dramatic boom, directly importing electrical products from China can prove to be an effective business solution. If importer research and plan his/her business around hot markets, the potential for profit can be very significant.
LIST OF SOME CHINESE ELECTRICAL PRODUCTS SUPPLIER
- Soben Electric Appliances Co Ltd. Guangdong
- Xing Yuan Electronics Co. Ltd
- Ningbo Jiangdong TEQ Fastener Co. Ltd
- Dongguan Fuxin Electronics Co Ltd
- Signcomplex Limited
- Huntkey Enterprise Group
- General Lighting Electronics Co. Ltd
- Zhejiang Shuangyang Group Co. Ltd
CUSTOMS AND TAXES WHEN IMPORTING ELECTRICAL PRODUCTS FROM CHINA TO INDIA
Importing electrical products from China involves various taxes. All the applied taxes are calculated, depending on India’s customs and taxes of that product.
Customs duty is a variant of Indirect Tax which is applicable on all imported electrical goods and a few goods exported out of the country. Duties levied on import of goods are termed as import duty. Many countries levy customs duties on import/export of goods as a means to raise revenue and/or shield domestic institutions from predatory or efficient competitors from other countries. Customs duty is levied as per the value of goods, weight, and other such criteria according to the electronic goods.
Customs Duty in India
Customs duty in India is defined under the Customs Act, 1962 and enables the government to levy duty on exports and imports, prohibit export and import of goods, procedures for importing/exporting, penalties etc. All matters related to customs duty fall under the Central Board of Excise & Customs (CBEC). The CBEC is a division of the Department of Revenue of the Ministry of Finance. CBEC formulates policies that concern collection or levying of customs duties, customs duty evasion, smuggling prevention, and administrative decisions.
Types of Customs Duty:
Customs duties are levied almost on all electrical goods imported into India. Import duties are not applicable to items including lifesaving drugs/equipment, fertilizers, food grains etc. Import duties are further divided into basic duty, additional customs duty, true countervailing duty, protective duty, education cess and anti-dumping duty or safeguard duty.
Basic Custom Duty
Basic customs duty is levied on imported items that fall under the ambit of Section 12 of the Customs Act, 1962. These duties are levied at the rates prescribed in First Schedule to Customs Tariff Act, 1975, under the terms specified in Section 2 of the act. The levied rates may be standard or preferential as per the country of import. In India, basic customs duty levied on import of electrical goods is depends on the HSN codes of the goods. The electrical products mostly imported under chapter 85. Basic customs duty on import of electrical products in India is 10% in chapter 85.
Additional Customs Duty (Countervailing Duty (CVD)):
This duty is applied to imported items under Section 3 of Customs Tariff Act, 1975. It is equal to the Central Excise Duty that is levied on goods produced within India. This duty is calculated on the aggregate value of goods including BDC and landing charges. The CVD on the import of electrical products is 12% but special CVD is 4%.
Protective duty is imposed to shield the domestic industry against imports at a rate recommended by the Tariff Commissioner. It is nil on electronic items.
This duty on electrical products is levied at 2% and higher education cess at another 1% of the aggregate of other customs duties.
Anti-dumping duty may be imposed if the imported electrical goods are at below fair market price; however, the Chinese government has provided certain industries and/or domestic manufacturers with subsidies. This means that the relevant Chinese manufacturers are allowed to sell products below the market price.
An Anti-Dumping Duty must take seriously since these are often in the range of 40 – 60% (as a comparison, the average duty rate is around 5% in most western countries).
Safeguard duty may apply if the government feels that a sudden increase in exports can potentially damage the domestic industry.
Customs Duty Rates:
Customs duty rates can be specific. In general, duty varies anywhere from 0% to 150%, with the average rate lying around 11.90%. Other fees related to customs duties include:
- Landing Charge (LC) – 1% CIF
- Countervailing Duty (CVD) – (0%, 6% or 12% (CIFD + LC))
- CEX (Education and Higher Education Cess) – 3% CVD
- CESS (Education + Higher Education) – 3% (Duty + CEX (Education and Higher Education Cess) + CVD)
- Additional CVD – 4% (CIFD + LC + CVD + CESS + CEX)
GST rates for products under the HSN Code 8544 (such as winding wires, coaxial cable, and optical fibers ) and HSN Code 8536 (such as electronic components like switches, connectors, and relays) from the proposed 28 percent to 18 percent.
Why can’t Indian importer rely on the Chinese supplier to manage the compliance process on the import of electrical goods from China?
The supplier is not at all responsible. At best, they can provide test reports from previous orders, but it’s always the importer that is responsible for ensuring that all imported electrical products comply with all applicable standards and regulations.
The supplier that does manage compliance on their own, or hire a consultant to do it for them, will definitely not satisfied with selling their products at a factory price. Instead, he will launch the product overseas on their own, rather than selling to importers, who take most of the profits
Do Indian importers need to pay any taxes in China for the import of electrical goods from China?
No, electrical importer doesn’t need to pay any “export tax” when importing from China. However, they need to pay for transportation to the port of loading in China and the cost for export clearance papers. Both of these costs are included in the importer order shipping according to the following terms: FOB, CIF, DAT, and DAP.
CIF (Cost, Insurance, and Freight)
CIF or Cost, Insurance, and Freight are the trade term that requires the supplier to arrange for the transportation of the goods by sea to a port of destination and also provide the buyer with the necessary documents. CIF value is used for calculating the duty that must be paid on an import.
FOB (Free on Board)
FOB is an agreement that demonstrates whether the buyer or the seller has liability for electrical goods that are damaged in transit. “FOB shipping point” refers to that the buyer will bear the risk if the goods are shipped while “FOB destination” implies that the seller will bear the risk of any loss until the buyer gets the goods.
DAT (Deliver at Terminal)
This term means that the seller covers all the costs of transport (export fees, carriage, insurance, and destination port charges) and assumes all risk until after the electrical goods are unloaded at the terminal. “Terminal” can be any place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The buyer covers the cost of transporting the goods from the terminal or port to final destination and pays the import duty/taxes/customs costs.
DAP (Deliver at Place)
This term means that the seller pays all the costs of transportation (export fees, carriage, insurance, and destination port charges) including the delivery of the goods to the final destination. The buyer is responsible to pay only the import duty/taxes/customs cost and to unload the goods from the vehicle at the final destination.
Shipping costs are a substantial percentage of your total product cost, so it’s important to keep them as low as possible. As a general rule of thumb, the bigger your order, the lower ‘per item’ shipping costs you will have. Following are the 4 most popular shipping methods you can use to import electrical goods from China:
Regular Post: This refers to normal, regular China Post which can take approximately 6 weeks to arrive. No online tracking is provided and can be used for parcels under 2kg. Usually, importer uses the regular post for samples and again only if time is not that important and you can wait a few weeks for a package to arrive. It is not the most reliable system.
Courier: Shipping with a courier company is the most suitable method for most importers starting out if it involves small, lightweight electrical items. With courier companies such as TNT, DHL, UPS or FedEx importer have to pay a premium price for each kilo but importer gets fast delivery times and an online tracking facility. These days most courier shipments take normally 3-5 business days to arrive.
Air Freight: This shipping method lies between courier shipping and sea freight. Shipping times vary from company to company, but in general, it takes 5 to 10 days which is not bad at all! Air Freight costs will be significantly lower than with courier companies, but extra work is involved when the electrical goods arrive in your destination country. With Air Freight importer usually have to handle documentation and customs clearance on their own (unlike with courier companies), which for many newbies may seem impractical. The importer can always outsource these tasks to a freight forwarding company at an additional cost.
Sea Freight: This is the most popular shipping method used by big companies/firms to import electrical goods from China. The cost per kilo (£100-£150 per pallet, even less if importer can order full, or half-container loads) is very low but the downside is their lengthy delivery time. Depending on where the importer is located it will be in the vicinity of 30 to 40 days in most cases.
Just like with Air Freight, the importer has to take care of the documentation, customs clearance, and delivery of goods from the port to home or office. So it always recommended using a freight forwarding company that will take care of all the procedures and deliver goods right to the door.
Also, with Sea Freight it’s very important to calculate all the EXTRA COSTS involved. The supplier will usually give the FOB price, which means that the goods are loaded onto the ship. But that’s not the end. Once your shipment arrives at the port there are all kinds of extra charges, such as: Unloading charge; Port fees; docking fees; Storage fees; Clearance fees, etc. In general, Sea Freight is better for bulky items. Sea freight shipping from China is perceived as a major hassle when importing products.
PAYMENT MODES WHILE IMPORT ELECTRICAL GOODS FROM CHINA TO INDIA
Mail Transfer (MT): In this method of payment, in order to pay cash to a third party who has an account with the bank is made, in writing, which is sent by email. This is similar to a telegraphic transfer but the difference is that it is sent through the post. Issuing bank issues Mail transfer and is dispatched on the same day of receipt of payment.
Bank Drafts and Cheques: A bank draft is a payment order issued by any bank on its own branch. The bank draft is handed over to the buyer who sends it to the beneficiary. The beneficiary obtains payment on presentation to the bank on which the bank draft is drawn. The beneficiary is indicated in the draft. Bank drafts are the most popular methods of remittances.
Bill of Exchange: it is an order drawn by a person upon another person asking the latter to make payment to a third party. Bill of exchange is an important method of payment which is made by the exporter and sent to the place of importer through a commercial bank along with the documents.
Telegraphic Transfer (TT) This is a method of foreign payments through the telegraphic transfer of funds to persons in China. The money is deposited with the banks in India and the Indian banker sends a telegram or fax to the foreign branch to make certain payments to the specific party, on that very date. Then, the foreign branch makes necessary payments in foreign exchange to the specific party. Telegraphic transfer is the quicker method of transmitting funds, involving no risk.
Cargo of electrical products must be sufficiently protected, from the dusty factory floor to a damp warehouse, and finally stacked in a container for up to a month.
A lot can happen in this time, an importer needs to be sure that his export packaging is up to the task. To ensure that cargo is protected during transportation, the importer can use the following checklist:
- Inner cartons layers – 5
- Outer cartons layers – 5
- Plastic wrapping (on Outer carton)
- Pallets (ISPM 15 EU Standard)
- Freight remark (Printed on outer carton)
Be sure to provide the supplier with explicit and clear export packaging specifications and do not leave anything to their interpretation.
But there is more to export packaging. There are various export packaging regulations to take into consideration, such as ISPM 15 and Lithium battery restrictions.
Before shipping from China, the importer needs to confirm which shipping regulations apply in India, and to the product.
Should importer need to get a Freight Forwarder?
The importer has basically two options, either the supplier itself administers the shipping process, or importer itself do it via a freight forwarder.
Letting the supplier administer the shipping process gives less transparency. However, then importer is far better off working directly with a reputable freight forwarder.
Freight forwarders are normally part of international trade, but many have their own offices in major Chinese port cities, such as Shanghai and Hong Kong.
A freight forwarder generally offers a wide range of shipping services, including FCL, LCL, and air freight. They also provide a designated contact person that keeps informed importer and answers his questions.
CUSTOM CLEARANCE PROCEDURES IN INDIA TO IMPORT ELECTRICAL GOODS FROM CHINA
All electrical goods imported in India have to pass through the customs clearance after they cross the Indian border. The imported electronics goods are examined, appraised, assessed, evaluated, and then allowed to be taken out of customs charge for use by the importer. The procedure for Customs clearance for goods imported in India is as follows:
Import Manifest: As per the section 30 of the Customs Act, 1962, the persons in charge of carrying imported electrical goods should hand over, within 24 hours of the arrival of the conveyance, an import manifest to the customs. The import manifest is a complete list of all electrical items the conveyance carries on board, including those to be transshipped and those to be carried to the subsequent ports of call.
Entry in the Import Department of Customs House: On receipt of information regarding the arrival of the electrical goods, the importer itself or their customs agents 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 should obtain the duplicate copy of Bill of Entry on which order for examination of the electrical goods is given by Customs and get the goods examined. If the descriptions of all electronic items are found to be correct, on the basis of declared particulars, clearance of goods is allowed by the appraiser.
Warehousing the Goods: The imported electrical goods can be warehoused at the port of shipment without the payment of duty but by presenting a “Bill of Entry for Warehousing” to the Bonds Department. The warehoused goods can be cleared in one or more installments.
Foreign Exchange: Once an importer is allowed to remit foreign exchange out of the country he has an obligation to import the permitted electrical goods. If no goods or goods of lesser values are imported then it would lead to leakage of foreign exchange.
Arrange your cargo transport of Import Electrical Goods from China to India
There are other costs related to shipping electrical goods are container fees, packaging, terminal handling, and broker fees. And to get a complete picture of shipping costs, each of these prices should be taken into account. Now once importer satisfied with the freight quote then he will need to send supplier’s contact details. They will take electrical goods from there and also make your transportation quick and safe.
Track your cargo: Shipping goods from China takes time. So, during that time, the importer must check his commercial invoice, packaging list, the bill of lading, and other freight documents. If the problem arises, then he should know the steps from which the goods go through when being cleared by customs of his country.
Obtain your shipment: When the imported electrical goods arrive, the importer needs to make arrangements for custom clearance agents to clear the goods and services through custom. And if everything goes then, then it’s right to pick up the shipment.