When you are planning or thinking to import goods from China, there are few things that you should keep in mind.

Check whether you have the right to import.

Register your Legal Entity in India

To start any type of business you must register a Legal Entity in India. Legal Entity is Mandatory for all types of business whether you are doing Import & Export or Just Trading within India. In India, there are 5 types of legal entity which you can register with the government of India

a) Sole Proprietorship Firm
b) Partnership Firm
c) Limited Liability Partnership
d) Private Limited Company
e) One Person Company

Applying for GST registration

Once you have applied for Legal Entity you would be required to apply for GST registration. It is Mandatory for all Legal entities (Trader, Importer, Exporter or Service Provider). You will get 15 digits Registration Number known as GST number.

Apply for the IEC Code Registration

For All Import or Export of Goods in India, you need to apply for a License also known as IEC Code. IEC is registered with DGFT Department and also required you to open a bank account which is linked to this Code along with Mobile number.

The first thing is that when you have a plan to import the goods from china to your doorstep, you should have an IEC on your company with GST Registration or If you do not have an IEC or Company with GST Registration,  then you have to hire an import agent. They will import your goods on your behalf along with their company’s documents and they will invoice you once the goods arrive in India.

Tip: If you are importing on the personal name or in an entity without GST  you can cannot be claimed Input.

• Know the goods you want to import

Know about the goods which you are planning to import, remember that import tariffs are vary depending on the different types of products. as some products are restricted to import and some products require special certificates while goods arriving at an Indian port. So, you need to research the rules and regulations of the products.

When you want to import a particular product, first keep in mind that it will be profitable for your business if you want to make your business profitable while reselling the goods then select the kind of product which you can sell well and that will provide you with a wider profit margin even after covering all import tariffs.

• Are the goods you want to import allowed your country?

India has prohibited few items that cannot be imported into under any circumstance. For the List Please Click here. The Indian Trade Classification (ITC)-Harmonized System (HS) classifies goods into three categories:

• • Restricted: Restricted items can be imported only after obtaining an import license from the relevant regional licensing authority.
  • Canalized: Canalized goods are items that may only be imported using specific procedures or methods of transport.
  • Prohibited: Prohibited items cannot be imported into under any circumstance

Few Items Would require special certificates

• • BIS
  • ISI
  • Labeling Requirements
  • Textile committee
  • WPC Certificate
  • Drug License
  • Indian Customs have also Implement Special Duty as Follows:
  • Anti-Dumping Duty – This is levied on specific goods imported from specified countries
  • Safeguard Duty – tariff designed to provide protection to domestic goods

There are few methods to finding a Chinese supplier. You can go through (Offline) Trade Shows or wholesale market in China, or you can use search engines (Online). You can find out many suppliers, but the problem is that how do you trust them that they are reliable suppliers? Here are a few ways to find out a reliable supplier.

1. Offline: Trade Shows and Exhibitions
2. Online: B2B market Place
3. Sourcing agents (Hire us to do the sourcing)

1. FINDING SUPPLIERS OFFLINE: TRADE SHOWS AND YIWU MARKET

TRADE SHOWS

Trade shows are exhibitions where the manufacturers showcase their products to attract new customers and will helps you to meet a wide range of suppliers face-to-face and build a successful business relationship.

BENEFITS OF TRADE SHOWS

• • • Direct Interaction with supplier or Manufacturer which builds trust
    • Find new and trendy products in the exhibition
    • Great way to learn more about your competitors.
    • To check the quality of the products and company values

 There are some trade shows of China which is highly populated

1. 1. 1. Canton Fair

The Canton Fair is the most famous trade fair in China which has been running since 1957 and held twice a year in Guangzhou (near Hong Kong in southern China). This fair attracts thousands of attendees with a large variety of products.

The East China Fair is the largest regional trade fair in China and is held once a year in Shanghai New International Expo Center in Shanghai, China.

Highlights:

• • • A zone of 130,000 sqm with more than 6,580 corners.
    • Themed Exhibition – Textile, Garments, Home Products, Gift, and Modern Lifestyle.
    • East China Fair has been held for 27 successive years.

2.Yiwu Fair

The Yiwu Fair Exhibitor showcase their latest and advanced technology products. They will cover a wide range of products like

• • • Toys
    • Electronic and electrical equipment (including intelligent products)
    • Daily necessities
    • Crafts and stationery
    • Necessities for pets
    • Jewelry and accessories, etc.,

2. FINDING SUPPLIER ONLINE: B2B SITES, SEARCH ENGINE, ETC

Google Search engine will be the quickest way to find out online suppliers, however, this is not the best way for China as Google is Banned in China and there are few online platforms such as

ALIBABA Alibaba is a Chinese Online B2B Market place founded in 1999. It has a wide variety of products. In Alibaba, there are large professional suppliers as well as trade companies. The Minimum Order is between $500-$5000. In Alibaba, you can communicate with suppliers in various means of communication like connecting through email, phone, WeChat, online messages, etc.

MADE IN CHINA is a B2B Market Place established in 1998 and it has headquarters in the state of Nanjing. It business model splits into the registration fees, SEO techniques, and the value-added services, advertisement and certification charges which are often incurred upon earning an ISO certification for the suppliers and has more than 10 million views every day, of which more than 85% contributes from the international business owners, discovering unmatched international trading opportunities.

GLOBAL SOURCE has large factories and trading companies. Its main focus is on the electronic and gifts industry Global Source is Work out for Bulk orders because they accept bulk orders only. The minimum order should be $1000-$5000. And the delivery time is between 15-25 days.

 ALI EXPRESS has a lot of collections of products with discounts and low prices but logistics remains a problem, many orders will get delay and some packages will get stuck in customs for long duration. if the seller has an overseas warehouse in your country then the shipping time is faster.

DH GATE is B2B Market Place which is founded in 2004. On DH gate there are factories and small-medium trading companies have a variety of goods which is work out in both retail and wholesale. Here MOQ is not necessary you can buy one or two items also. The best way of communication here is online chat in this way they will reply to you fast.

Expect these other websites are also there they are 1688.com, eworldtrade.com

IS ONLINE SAFE?

Yes, However, relying only on the online marketplace to find out reliable suppliers or manufacturers can be risky.

Please Remember all these websites are only Marketplace they do not make or sell any product directly. People who list their products can be genuine or not depends on your own research and you cannot claim any losses from these online Marketplaces is the case of any mishappening.

Now that we know where to Look for potential Suppliers, let us understand how to make sure they are Reliable before you do any business with them. So how do we do that:

1. 1. Are they a Trading Company or Manufacturer? If a company is displaying too many different product categories
   2. Are they in the right location where other competitors? Sourcing Raw material can be expensive if you find a supplier in one corner. Hence the location of most suppliers must be within 300 to 500 Kms area.
   3. Check their city and address and try sourcing other suppliers nearby or ask their competitors if they are a trading company or factory.
   4. Check their Business license copy which usually is in Chinese has mentioned them to be a trading company or not.
   5. Are they welcoming your request to visit their factory?
   6. Are they replying to your inquiries quickly? Non-manufacturer might need time to reply as they need to double-check every time with an actual factory.
   7. Use a Sourcing company to do the due diligence (wedoimport.com can help you do all the background Checks)
   8. Compare their pricing to other suppliers. If their price is mouth-wateringly low, then it could be alarming (beware of scam, fraud or fake)
   9. Ask for a live video call and request them to show you their manufacturing premises.
   10. Bosses/owners in china usually do not speak English they hire sales staff to take care of the overseas market. Try contacting their Sales Manager and find out more about their company.
   11. Ask them several questions about your product in detail (manufacturing process, packaging, production time, pricing, MOQ) and see if they have a deeper knowledge of their products.

Tip: Is it always recommended to buy from a factory? (obviously we know fewer hands changed means lower price), However, in many situations were your qty is not big enough or you want many products you would be advised to buy from a trading company.

China is the world’s largest marketplace. It has a wide variety of goods with different patterns and designs which you can get of good quality at the lowest- margin price. If you want to import goods from China, then it will be helpful to grow your business. As an Importer, you are well known about the risk. There are few risks, you may be face unexpectedly while importing goods from China to India. They are

Goods received to you may not be the same as what you ordered

In certain cases, while importing the goods from China to India, something can go wrong with your consignment, you may not get the goods that you might have an order for. This type of error happens at the dispatch level where managers others stock to you. Goods men for you might have gone 1000’s of kms away in some Continent.

Now there is the only option is to send back the wrong goods and request the supplier to sends what you ordered for. Many manufacturers won’t be kind to your request. But some manufacturers will more likely comply with your request for the sake of future business.

Product is Being Copied (IP or Trademark)

When you want the goods based upon your designs and patterns and you send your designs to the manufacturer, and even if you have a patent or trademark for that design, the manufacturer in china can still copy your design and they will produce it for other customers.

Products get damaged in transit

When you are importing goods from China to India, whether the goods are getting shipped by air or sea there is a chance of products getting damaged or even lost in transit

In such cases you must have insurance for your imported products will help you to cover such losses that may arise.

Received low-Quality Products

There is a possibility of getting goods with lesser quality than you expect, If the quality issues are less for your goods and it would be sellable with fewer rates then your business won’t run successfully.

To Avoid such quality issues, you should be getting your consignment inspected before shipment.

Not getting a profit margin for goods which you received due to a competitive market.

Not all goods imported from China are profitable for your business. Sometimes you think to import products to sell and make more profit, but at the end of the day because of a highly competitive market you don’t make the profit that you expect, and sometimes you also can even incur a loss.

 Lack of a relationship with your manufacturer or supplier

 If you are developing a close working relationship with your supplier, then your orders get at risk and your business won’t run without stock.

Chinese business culture follows a tradition Known as “guanxi” which means “relationship”. They should friendly in business work with their customers, they trust that building a business relationship with customers will implement the business.

If you build a great relationship with your supplier, they will help you in Production, quality control, price negotiation as well as they give discounts also based upon your relationship with your supplier.

Due Diligence

When importing goods from China to India, Due diligence means making sure to check the background of a company before entering a formal business relationship. The factory that’s right for your needs and can help achieve your business objectives.

The Internet provides a perfect tool to identify a long list of self-claimed Chinese manufacturers with decent websites.

​​​​​​Here are a few steps that will guide you on how to establish and use a due diligence system

Due diligence needs to be conducted with your supplier. Your audit should include the following criteria, plus others that may be specific to your business.

• • • Legitimacy Is the supplier genuine? Do they really exist?
    • Regulatory requirements

Do they comply with all relevant laws and regulations?

• • • Social and environmental responsibility Do they treat their employees equitably? And Do they meet their environmental responsibilities?
    • Duration in Business How long are they in business? or are they just started 3 years ago?
    • International experience Do they only sell the domestic market? have they ever exported to your country?
    • Track records Do they keep their promises?
    • Owners and employees With whom you are dealing and what type of people are they?
    • Price Can they compete on price? Will they give you the cheapest price with good quality?
    • Capability Do they can fulfil your orders as your business grows?

By this investigation you can know about your supplier and their capabilities, you can aware of the risk.

Before you order the goods, it is important to classify the goods and calculate the approximate total cost from china port to till the Indian port. The landed cost will include the total order value, Shipping, CFS charges, customs duty, currency conversion, and other expenses.

Purchase price in USD x Exchange Rate ;[a]
Freight Charges (USD 80 to 120 Per Cubic Meter by Sea/By air $3 to $12) ; [b]
Customs Duty on cost of goods [a+b] x % Tariff Rate = [c]
Commission: 5% on [a + b + c] = [d]
Applying Local Taxes CST/VAT (% as per tariff x d) = [e]
Local Transport from port till your warehouse; [f]
Total Amount payable in INR; [e + f]

• Placing the order and Following up

Before placing an order, you should follow a few things to get the quality goods and packaging of the product. And follow up with the supplier that how long shipping will take for your consignment. Here I discuss a few steps on how to place the order?

• Ask the supplier for sample or Make an order for sample

Before placing an order with your supplier, you should order for a sample first. So, that you can get an idea of the quality of product and packaging. After receiving the sample first check the quality and packaging of the product, if the product is good then you can place the order.

If you do not satisfy with the sample or some changes will be there like color or size difference then you can ask the supplier to makes that changes if he ready rectify the changes then you can place the order if not then you find out another supplier.

• MOQ and Negotiation

Talk to your supplier to arrange small quantity for as your first order and negotiate the price with them. Because due to competitive market sometimes you may not get higher profits also. so, if you order for small quantity and you are getting higher profits for that or size product then you can go for bulk orders.

•  Terms of Agreement

Make sure that you get the agreement on written from your supplier, the following items should be there in agreement.

• • • Price of the product.
    • Total order value
    • Shipping terms from which place the goods are loading, and at which place it will receive. They will mention in incoterms like example “FOB FOSHAN”, “EXW NIGBO”.
    • Product Specifications like, labeling and packing the goods with shipping marks on cartoons.
    • And the last thing is payment terms like 30% advance Deposit before shipment and remaining 70% after shipment.
• Formalize Agreement
• • • Now send the PO (Purchase Order) to the supplier.
    • Receive PI (Proforma Invoice) & PL (Packing List) from the supplier with Signature and stamp.
    • Send the advance payment (30%) as per the terms you agreed on.
•  Deposit the Payment

Be sure that you must deposit the payment in the company’s account only. Many suppliers request to do the payment to their personal accounts. But do not deposit the money to the personal account because there a chance of fraud So, first, confirm with your supplier for company account details then make the payment.

• Follow Up

After doing the advance payment follow-up process with your supplier like:

• • • when the production will complete?
    • Send the pictures of goods before packing,
    • When the shipment will start?
    • How much time will it take to receive the shipment on the port?
    • You should follow up on your supplier from the production process until the goods received on the port.

There are three ways to ship goods from China to India. They are

• • • Airway: Airway is the fastest mode of transport that can transport your goods from a china factory to the Indian port. Compare to seaway, the airway will be more expensive. But when your goods have light-weighted then transport cost is lesser compare to sea transport and the goods will delivery within a short period of time (7-10 days).

• • • Seaway: Seaway is benefited for you if your order is in bulk and heavy weighted and through sea transport the goods will deliver within (20-60 days) based upon the containers.
      • LCL – Less Container Load (LCL) which is useful for small orders, Cargo from multiple buyers is stored in the same container. According to research, it is only advised to do LCL shipment if the order volume is less than 12 CBM
      • FCL – Full Container Load (FCL) the most cost-effective freight method available, if counted by cost per volumetric unit and weight unit. It means that your container is yours- you aren’t sharing the container with any other parties
      • Mixed Container – This is a special service given for clients of Wedoimport.com where Cargo from multiple buyers is stored in the same container and cost is counted by cost per volumetric unit. So its LCL at the price of FCL. This Mixed container is mostly helpful for small businesses. The mixed container is best for saving the cost and it is more safety for goods. The minimum order should be started from $4000 and it delivers timings will be (40-60 days).
    • Courier Service Courier service will helpful for small orders (from $0-$2000) only, they will deliver the goods till your doorstep.
    • Intermodal transportation is a combination of two or more different shipping modes like a truck, rai

Customs clearance involves preparation and submission of documentation required to facilitate imported goods into the country, hire an import agent or clearing agent during

• • • customs examination,
    • assessment,
    • payment of customs duty and other import tariffs.
    • and taking delivery of cargo after clearing the customs along with documents.

Documentations Need for Clearing customs in India

• • • Bill of Lading or Airway Bill is a goods carrier’s document which provides full details of cargo with terms of delivery. This document is to be submitted for customs clearance.
    • Bill of Entry is a legal document to be filed by CHA. This document indicates ‘total outward remittance of the country’ regulated by the Reserve Bank and Customs department. And it must be filed within 30 days of the arrival of goods at a customs location.
    • Import License the Import is license must need for importing goods as per guidelines provided by the government. So, while clearing customs you should submit the import license.
    • Insurance Certificate helps customs authorities to verify, whether selling price includes insurance or not. This is required to find out assessable value which determines import duty amount.
    • Purchase Order from Buyer is showing the terms and conditions of sale contract which enables the customs official to confirm on value assessment.
    • Commercial Invoice of the supplier which shows the total order value with product description
    • Packing List shows the total consignment details like how many cartoons are loaded, what will be the total cubic meters and total weight.
    • other specific documents for your goods, some products required specific certificates while goods arrive at an Indian port. For example
      • Cosmetics – Drug license certificate
      • Electronics- BIS
      • Fabrics & costumes-Textile committee
      • Toys-Lab test report