The cheapest time to find a problem with an import is before you place the order, and the most expensive is when the cargo is already at the port. A price and a sample are not enough to order on. This guide sets out what Indian importers should check before placing an overseas order, organised as six gates. Each gate has the questions to ask, the evidence to hold and the point at which you should stop. The rules come from India's Foreign Trade Policy and Customs Act, the Reserve Bank's import payment rules and the Embassy of India in Beijing's advisory for SMEs, and the gates are meant to be answered in writing so that the file shows what you knew when you ordered.
For the steps that follow the order, see customs clearance in India step by step.
Gate 1: Can You Import It?
India's Foreign Trade Policy 2023 says imports are free unless prohibited, restricted or reserved for State Trading Enterprises under the ITC (HS). Para 2.08 says restricted goods need an authorisation or permission. Para 2.03 applies domestic standards and safety norms to imports, and para 2.06(c) lets the regulator concerned notify extra documents for goods with product-specific compliance. Second-hand goods follow a separate regime under para 2.31, so a new-goods answer does not carry over.
- Questions: What is the classification? Is the item free, restricted or prohibited? Does any standard, permission or certificate apply?
- Evidence: the classification record and the policy entry.
- Stop if: the item is restricted and no authorisation is in hand.
Gate 2: Are You Ready to Import and Pay?
You need an active IEC. The policy requires a yearly update between April and June and de-activates an IEC that is not updated. You also need a bank willing to process the payment. The Reserve Bank's Master Direction on Import of Goods and Services says remittances against normal imports should be completed within six months from the date of shipment, and sets conditions for advance payments, including a standby letter of credit or bank guarantee above USD 200,000. If the importer cannot obtain a guarantee from the supplier and the bank is satisfied with its track record, the requirement may be waived for advances up to USD 5,000,000.
- Questions: Is the IEC active? Which bank will remit, and what will it ask for? Is an advance planned?
- Evidence: the IEC record and the bank's confirmation of its requirements.
- Stop if: the IEC is inactive, or the payment route is unclear.
Gate 3: Is the Supplier Real?
The Embassy's advisory recommends a credential check through the Embassy or a Consulate, a copy of the business licence, copies of the proprietor's identity card and passport and a check that the bank account belongs to the company. It also advises avoiding transactions with companies found on B2B platforms. Our guide to reliable suppliers in China sets out the full ladder.
- Questions: Who exactly is the seller? Do the licence, the name on the invoice and the name on the bank account agree?
- Evidence: the verification file.
- Stop if: the payee is a third party or an individual, or the supplier will not provide its documents.
Gate 4: Are the Deal Terms Clear?
Put the following in the contract or the purchase order:
- The trade term, with the port and the edition, such as FOB with a named port under Incoterms 2020. See EXW vs FOB vs CIF.
- The goods: a precise description, quantity, specification and the tariff code you have decided on.
- The documents, including the commercial invoice, the packing list, the transport document and any inspection certificate. The Embassy advises naming documents such as the original bill of lading and any pre-shipment inspection certificate in the contract.
- Quality and inspection: who inspects, when, and what happens if the goods fail.
- Packaging: if wood is used, ask for confirmation of treatment, because the international standard ISPM 15 requires approved treatment, such as heating to at least 56 °C for 30 continuous minutes, and a mark on wood packaging made from raw wood.
- Payment: the method, the timing and the account. The Embassy advises against paying an advance to an unknown company.
- Delays and disputes: the delivery date, a definition of force majeure and an arbitration clause, which the Embassy's do's and don'ts recommend.
- Stop if: the term, the documents or the payment account are left to be settled later.
Gate 5: Does the Order Make Money?
Calculate the landed cost before you commit. Customs duty follows the classification, the value includes transport and insurance as the rules provide under Section 14 of the Customs Act, 1962, and integrated tax is charged on the value plus the duty. Our guide to landed cost walks through a calculation. Then test it: what happens to your margin if the duty rate is higher than you assumed, or freight rises?
- Questions: What is the full cost per unit? What is the margin at the selling price? How sensitive is it to classification and freight?
- Evidence: the landed cost sheet.
- Stop if: the margin disappears under a modest change in duty or freight.
Gate 6: Is Your Logistics Ready?
Section 47(2) makes duty on a self-assessed entry payable when the bill of entry is presented, and Section 48 allows goods not cleared within thirty days of unloading to be sold after notice. So the logistics plan has to be in place before the goods ship.
- Questions: Who files the export declaration in China, and who files the bill of entry in India? Who funds the duty and on which day? Who receives the goods and where do they go?
- Evidence: a named forwarder and a licensed broker with a signed authorisation. See customs broker vs freight forwarder.
- Stop if: nobody owns the filing, or the duty funds are not arranged.
A Summary of the Gates
| Gate | The question | Stop if |
|---|---|---|
| 1. Policy | Can I import this? | Restricted with no authorisation |
| 2. Readiness | Can I register, remit and pay? | IEC inactive or payment route unclear |
| 3. Supplier | Is the seller real? | Third-party payee or missing documents |
| 4. Terms | Is the deal clear? | Term, documents or payment left open |
| 5. Economics | Does it make money? | Margin gone under a small change |
| 6. Logistics | Is everything ready? | Nobody owns the filing |
Two Made-Up Examples
An importer wants to order a product and finds, at Gate 1, that its entry in the ITC (HS) is marked restricted. The order is held until an authorisation is obtained, which costs some weeks but avoids a consignment that cannot be cleared (the details are made up).
A supplier asks, just before the advance is paid, that the money go to an individual's account. Gate 3 stops the payment. The Embassy advises verifying that the account belongs to the company and making no payment to a third party, and the RBI Direction allows third-party payments only on conditions, including a firm purchase order or agreement and a narration on the invoice. The importer asks for the company account in writing and confirms it by a second channel.
Keep an Order File
For each order, keep the gate answers, the verification file, the signed contract, the classification record, the landed cost sheet and the broker's authorisation. If a dispute or a customs query arises, the file shows what you checked and when.
Order With Confidence Through RR Brothers and Logistics
RR Brothers and Logistics reviews the logistics side of an order before it is placed, from the trade term and documents to customs clearance, with sea and air freight from China. Send us the draft order and we will tell you what to settle before you commit.
Frequently Asked Questions
Whether you can import the product, whether your IEC and payment route are ready, whether the supplier is real, whether the contract is clear, whether the order makes money after duty and whether the logistics are arranged.
Classify it and look up its policy in the ITC (HS). Under the Foreign Trade Policy, imports are free unless prohibited, restricted or reserved for State Trading Enterprises. DGFT publishes the lists.
The RBI Master Direction expects remittances against normal imports within six months of shipment and sets conditions on advances, such as a guarantee above USD 200,000, with a waiver up to USD 5,000,000 for importers with a satisfactory track record who cannot obtain one from the supplier.
The trade term with port and edition, a precise description and specification, the documents to be supplied, inspection, packaging, payment terms and account, delivery date, force majeure and an arbitration clause.
Duty and integrated tax are charged on the value plus freight and insurance as the rules provide, so the supplier's price understates what you will pay. Test the margin against a higher duty rate or freight.
Who files the export declaration in China, who files the bill of entry in India, who funds the duty and on which day, and who receives the goods. Section 48 allows uncleared goods to be sold after thirty days.
Sources
- DGFT: Foreign Trade Policy 2023, Chapter 2 (paras 2.01 to 2.03, 2.05, 2.06, 2.08)
- Reserve Bank of India: Master Direction, Import of Goods and Services (updated 12 January 2026)
- Embassy of India, Beijing: Updated advisory for Indian SMEs doing business with Chinese companies
- IPPC/FAO: ISPM 15, Regulation of wood packaging material in international trade (2018)
- CBIC: Customs Act, 1962 (Sections 14, 47 and 48)
This article is general information, not legal, tax or customs advice. Rules, rates and procedures change; confirm current requirements with the relevant authority or a licensed customs professional before you ship. Regulatory references were checked against the official sources listed above on 26 October 2026.
Image credits: header photo by Jakub Żerdzicki on Unsplash; photo from Pixabay. Used under the Unsplash License and the Pixabay Content License.
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