India is one of the largest importers of goods from China.
This growing interest in China is attributed to the popularity of electronic devices in India, which have created many opportunities for importers.
Importers should be aware of the requirements and best practices when sourcing goods from China to match this demand.
If you are an Indian business looking to import goods from China, this article is for you!
1. Register A Company in India
First, you will need to register your business or brand as a legal entity in India.
This is the first step required for any individual, brand, or organization interested in importing goods from China.
You can register your businesses as any one of the following business structures:
- A sole proprietorship
- A partnership
- A limited liability partnership
- A private limited company
- A one-person company
Suppose you are simply testing the waters by importing from China.
In that case, it may be best for you to register as a sole proprietorship.
If things get serious and importing from China is a good option for you, you can easily switch to a private limited company or a limited liability partnership.
2. Apply For Tax Registration
After choosing a business structure and incorporating your company, the next step is to apply for tax registration on your goods.
You are required to have a Taxpayer Identification Number (TIN) which is a unique identifier assigned to the account holder by the government.
You will also need a Value Added Tax (VAT)/Central Sales Tax (CST) number
This is important because it does not only apply to importing goods from China.
Regardless of where you are importing goods, you will need to provide this number to sell any important goods in India.
3. Apply For IEC Code Registration
Next up, you will need to apply for an Importer-Exporter Code (IEC).
Your license to import goods from China to India will be received as an IEC code.
This code is required by anyone who is interested in initiating an import/export business in India.
It is a 10-digit code that is valid throughout an individual's lifetime and is issued by the Director-General of Foreign Trade in India.
To apply for an IEC code, you will need to provide the following documents:
- Banking certificate
- Bank statement
- ID documents and proof of address of all company directors
- Company PAN Card
Once you have obtained your license to import goods from China, you can begin your search for the best Chinese suppliers
Finding the Best Chinese Suppliers
It's now time to start finding who to source from in China
This can be tricky, as not only are untrustworthy suppliers in China common but even if you do find a trustworthy supplier, are they ready to do business with India?
Visit Wholesale Markets
Many wholesale markets are open all year round, such as the Yiwu market with over 40,000 shops.
Other wholesale markets in Chinese trade cities include Guangzhou and Shenzhen.
Each wholesale market in its respective city gathers industry-wide suppliers.
- The Yiwu market is the largest wholesale market with five main sections with 3-4 floors each.
- The Guangzhou market is the largest for luggage and clothing in China. If your business in India involves the sale of bags, clothes, or luggage, finding a supplier in this market will be your best option.
- The Shenzhen market is the best for electronics which are facing a huge demand in India. Here, you will be able to find suppliers that have the most in-demand products at an affordable price.
Attend Import/Export Conventions
Multiple suppliers attend the many import/export conventions that take place in China each year.
Your best bet would be to attend one of these conventions, such as the Canton Fair.
The Canton Fair is one of the world's largest and foremost conventions that covers literally every channel for suppliers and their products.
When you attend such conventions, you should always keep a set of business cards on you to give out to suppliers so you can follow up later and make connections.
The type of conventions in China can be divided into two categories; professional exhibitions and comprehensive exhibitions.
Professional exhibitions showcase products from the same division, such as electronics or clothing.
All suppliers that trade in electronics or clothing will be there at professional exhibitions, which makes it very easy to find a supplier if you are sure about the type of goods you want to import.
On the other hand, comprehensive exhibitions have a wide variety of products and are not limited to a particular type.
If you are interested in sourcing different types of goods from various suppliers, attending a comprehensive exhibition will benefit you the most.
Browse Online Marketplaces
Online marketplaces, specifically business-to-business marketplaces, are digital platforms where businesses can contact other businesses to assist them in bulk buying and selling products all in one place.
The major business-to-business marketplaces include Alibaba, Made-inChina, and Global Sources
Finding an online supplier can be a stressful process as there is always a risk of getting scammed.
To avoid this, you should individually research each supplier, collect references, and have a due diligence process in place to ensure your supplier of choice is genuine and reliable.
The best advice would be to visit the factory and have a look yourself.
For a more in-depth explanation of how you can find the perfect Chinese supplier for your business, please take a look at our article here.
Shipping from China to India
The three main modes of transport for shipping imported goods from China to India are air transport, sea transport, or express delivery service.
It will only take a few days for your shipment from a factory in China to be transported to your warehouse in India through air freight.
This is the most convenient mode of transport as it is the fastest.
If time is your priority, then this is the best option for you.
However, since time is money, this method can be quite expensive compared to shipping by sea.
The most cost-effective way to transport your imports from China to India is by sea.
However, this process can be considered a bit complicated as it involves the carriage of goods by the ship and delivery at the port of discharge as opposed to getting delivered straight to your warehouse.
If you don’t mind a slightly more complicated process for a better price, this option is best for you.
By Express Delivery Service Company
If you are in immediate need of a shipment, many companies provide express shipping from China to India.
Depending on your need and urgency, you may have to pay a higher cost.
You can find a multitude of companies that offer this service by carrying out a quick google search.
Whichever company you select, make sure they have a good reputation and a proper shipment tracking service to ensure that nothing gets lost.
Choose A Logistics Partner Company
Finding a logistics company that has reasonable sea and air freight rates in China makes the entire shipment process extremely convenient and cost-effective as you benefit from the various add-on services.
Moreover, choosing a logistics partner ensures that your goods are delivered promptly and in perfect condition.
Labeling & Documentation Requirements
All Indian businesses must meet all import marketing and labeling requirements set out by the government.
If you fail to meet any requirements, your shipment may be seized by the customs authorities, which is a huge inconvenience and can cause several delays.
The information displayed on your labels needs to include the date of manufacture, product name and description, the net weight of the product, the maximum retail price, your address, the country of origin and the batch ID, and the date the product was imported.
The most important document required when importing goods from China to India is the Bill of Entry (BoE).
This document denotes the type of item being important and its value.
The importer can complete the BoE beforehand, or it can be generated when the shipment arrives.
However, to automatically generate the document before the shipment arrives, you will need to provide the following documents; the bill of lading or airway bill, health, and food safety certificate, commercial invoice, insurance policy, packing list, certificate of origin, the purchase order and the industrial license.
While the process of sourcing goods from China to India seems a bit daunting, if you follow the steps outlined in this article, you should face no issues!
All you need to focus on is preparing the right documents and obtaining the correct licenses.
As long as you do this, everything should run smoothly, and your shipment from China should successfully arrive in India.
Interested in sourcing from China to India?
You'll need a multi-currency account to make it happen. One that can handle the RMB too.
What business structure can you register for your business?
You can register your business as a sole proprietorship, a partnership, a limited liability partnership, and a private limited company.
What kind of documents do I need to apply for an IEC code?
What do I need to apply for the tax registration?