The first step for an importer is to do a market survey to decide on the goods or commodities that he wants to import. He needs to study the domestic market for items that are in demand, or for which a demand is likely to arise. These could include finished goods for the consumer or secondary market, or ancillaries for other industries. He should also study the present competition and future prospects. The following are some sources of data/information can be tapped for carrying out such studies:-
Familiarisation with Policies, Procedures and Agreements
It is very important to be familiar with all the policies, regulations and procedures governing foreign trade, as well as foreign trade agreements between India and other countries and international trade organisations, before embarking on a venture.
Before commencing business, you need to register with the Directorate General of Foreign Trade (DGFT) and obtain Importer Exporter Code Number. IEC Code is unique 10 digit code issued by DGFT to Indian Companies. This is a mandatory requirement to carry out import from or export to India.
Identification of Source
Having identified the possible items to import, the source has to be identified. It is imperative to ascertain the legal implications of trading in the selected items in both the countries as well as the credibility of the overseas suppliers. Assistance for this is provided by the Indian Commercial Missions abroad and the International Trade Promotion Organisation (ITPO) through various exhibitions and trade fairs organised in India and abroad. It is important to keep abreast with Important Notifications by DGFT related to imports. Care must also be taken to remain updated on applicability of standards laid down by Bureau of Indian Standards for specific items to be imported.
Categories of Items
Items that can be imported fall under four categories:
- Freely importable: Majority of the goods come under this category. These do not require import licenses.
- Licensed Items: There are number of goods, which can only be importer under an import license. These include some consumer goods; precious and semi-precious stones; products related to safety and security; seeds, plants and animals; some insecticides, pharmaceuticals and chemicals; some electronically items; several items reserved for production by the small-scale sector. Licence for import of these items is issued by the Directorate General of Foreign Trade.
- Canalised Items: These can only be imported by specified channels or government agencies such as the State Trading Corporation (STC).
- Prohibited items: Tallow fat, animal rennet, wild animals and unprocessed ivory-are prohibited to be imported.
Import of Samples
Commercial samples are specimens of goods that may be imported by the traders in India, to know its characteristics and usage and to assess its marketability in India. The bona fide trade samples can be imported provided the said goods have been supplied free of charge. Samples in respect of Prohibited items mentioned above cannot be imported. Further details about importing samples can be found here.