Guidance

Exporting to India

A guide for British businesses interested in selling goods and services in India.

Visit great.gov.uk for guidance on how to research overseas markets as well as a range of other important issues for exporters.

India in world business rankings

Ease of doing business in Indai according to the World Bank

Doing business in India

India is one of the fastest growing economies in the world. The UK exported goods worth £6.35 billion to India and services valued at £2.24 billion in 2014, and the UK is the third largest investor in India.

It’s a very large country made up of 29 different states and 7 union territories. The market varies widely across its many different regions and states.

India is a market which requires a lot of patience and a long-term strategy to be successful.

Benefits for UK businesses exporting to India

There are several reasons to choose India as an export destination:

  • English is widely spoken
  • a common legal and administrative history
  • rising personal incomes creating a new middle class consumer market
  • fast-growing economy with one of the world’s largest youth populations
  • expanding emerging cities with more than 50 cities now over a million people

Challenges and risks of doing business in India

India is a price-competitive market and price is an important consideration for consumers. You will be expected to negotiate on the price for your goods and to discount.

You must check what the import duty is for your product in India to see if your export is viable. It’s likely to be a minimum of 35% once all additional taxes are included.

You should be aware of:

  • multiple religious, ethnic and annual variations in holiday timings, requiring careful planning for business trips
  • barriers to trade and investment in some sectors because of regulatory constraints, local sourcing requirements and import tariffs
  • intellectual property protection (IP)
  • risk of delays due to administrative requirements
  • difficulty of land acquisition
  • access to the right skills in the local workforce
  • infrastructure challenges, including for distribution and logistics
  • extremely hot weather in summer and wet weather in the monsoon season can affect business
  • risk of bribery and corruption

You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.

Read the Foreign and Commonwealth Office’s (FCO) Overseas Business Risk report for India.

Industries importing into India

The top 10 industries importing into India are:

  1. mineral fuels and oils
  2. gems and precious metals
  3. electrical machinery and equipment and parts
  4. machinery, mechanical appliances, reactors and boilers
  5. organic chemicals
  6. iron and steel
  7. plastics
  8. animal or vegetable fats and oils
  9. fertilisers
  10. medical, optical, photographic, measuring, precision, medical or surgical equipment

You can read more about what India imports at World’s Top Exports.

The International Trade Centre (ITC) ranks the value of India’s top services imports.

Researching the Indian market

India is not a single national market. In India each state resembles a separate country, often with its own language, cultural practices and preferences. Different regions have different industry clusters. Therefore regional plans and good local research are needed.

You need to research market entry requirements in specific states using both desk research and market visits.

You need to determine whether:

  • there is a market for your product or service
  • your pricing is competitive
  • to localise your product
  • to adapt your business model

Visit the Department for International Trade’s (DIT) events portal to find upcoming events and missions.

Contact the DIT team in India for events and company launches at British High Commission locations.

Contact kevin.mccole@ukibc.com or richard.mccallum@ukibc.com at the UK-India Business Council (UKIBC) to use DIT’s Overseas Market Introduction Service (OMIS) to research the Indian market.

Getting started in India

Direct sales in India using local representation

Before appointing an agent or distributor you should look closely at your potential partner’s:

  • local business reputation
  • financial resources
  • regional coverage
  • marketing ability

It may be best to appoint a series of agents or distributors to cover different regions in this market.

Contact kevin.mccole@ukibc.com or richard.mccallum@ukibc.com at UKIBC to use DIT’s OMIS service to identify local representatives for your products in India.

Setting up a corporate or non-corporate entity in India

A liaison or branch office in India needs permission from the Reserve Bank of India under provisions of Foreign Exchange Management Act (FEMA) 1999.

A project office is treated as an extension of the UK company. It doesn’t need permission from the Reserve Bank of India, but is subject to some reporting requirements. It’s taxed at the rate applicable to foreign companies.

A UK company can set up a wholly owned subsidiary company in India in the form of a private company subject to Foreign Direct Investment (FDI) guidelines.

There are no separate laws for joint ventures between UK and Indian companies. Laws governing domestic companies apply.

Find more detailed information on market entry options for India.

UK institutional investors are free to invest in India’s financial markets.

Find out more about market entry options in India.

You should get legal advice on the best structure for your business.

Find out more about UKIBC’s ‘Launchpad’ service which can help you set up in India.

Establishing a franchise in India

Most franchise operations in India are through a joint venture with a local partner.

Visit the international section of the British Franchise Association for more information on franchising.

Merger or acquisition in India

Merging with or taking over an Indian company with local expertise including an established customer and supplier base will help you succeed in the Indian market. However, good ‘due diligence’ on your prospective target is essential.

Direct export to India

UK companies can consider direct export to India by contacting appropriate end users. You might consider this as a first step before appointing a partner in India.

Online selling to India

To sell online in India you need to localise your website or use an online marketplace.

You can start exporting in a few steps online. The DIT can help you find the online marketplace best suited to your product or service in India and access preferential deals negotiated by government.

Check out online marketplaces in India where DIT has negotiated listings at better than commercial rates.

Getting finance to fulfil an export contract to India

Schemes are available to UK companies selling products and services to India to make it easier to fulfil an export contract and grow your business. Contact your bank or specialist financial organisations for assistance.

UK Export Finance (UKEF) has significant risk capacity to support exports to India. Contact one of UKEF’s export finance advisers for free and impartial advice on your finance options.

Getting paid in India

You need to use secure terms of payment in India through a letter of credit or documentary collection via your bank. The other option is payment or partial payment in advance. Open account is not allowed in India.

Your contract should always clearly state the terms for delivery and payment of goods and services. Indian law does not regulate late payments, and settlement action through the courts can be expensive and take a long time.

Find out more about managing money in India.

Payment risks in India

UKEF helps UK companies get paid by insuring against buyer default.

Be confident you’ll get paid for your export contract. Speak to one of UKEF’s export finance advisers for free and impartial advice on your insurance options or contact one of UKEF’s approved export insurance brokers.

Currency risks in India

If you have not fixed your exchange rate you have not fixed your price.

You should consider whether the best option for you is to agree terms in sterling, US Dollars or Indian Rupees in any contract. You should also consider getting expert financial advice on exchange rates (sometimes called FX).

Transferring money from India

There are exchange controls in India. Foreign currency money transfers from India are subject to restrictions under the FEMA.

The legal system in India is based on English common law and the judiciary is relatively independent. However, court delays can run to many years making litigation very expensive and lengthy.

Contact the DIT team in India to help find tax and legal advisers before entering into agreements.

Contact kevin.mccole@ukibc.com or richard.mccallum@ukibc.com at UKIBC for research on IP and standards and technical regulations in India.

Controlled goods export licences for India

You must have a licence to supply anything on the UK strategic export control lists to India.

Nuclear technology licence applications are considered against the Nuclear Suppliers Group (NSG) trigger list and NSG dual-use list for nuclear transfers to India. This will be done on a case-by-case basis for all items destined for International Atomic Energy Agency (IAEA) safeguarded civil nuclear facilities in India.

Import restrictions in India

The Ministry of Commerce and Industry (MCI) in India lists goods where restrictions are imposed or import is not allowed.

Standards and technical regulations in India

Imports of some products are subject to compliance with specified Indian quality standards. Manufacturers must obtain certification from the Bureau of Indian Standards (BIS) before exporting such goods to India. BIS does offer pre-certification subject to production inspections.

Around 109 products are subject to compliance with these standards, including:

  • food preservatives and additives
  • milk powder
  • certain electrical appliances
  • some types of gas cylinders
  • cement

Find out more about the Foreign Manufacturers Certification Scheme (FMCS).

The Food Safety and Standards Authority of India maintains a Food Import Clearance System which can be accessed to understand the requirements for export of food to India.

Labelling requirements in India

All imported pre-packaged commodities intended for direct retail sale must include specific information on the label.

Declarations may be printed in English or Hindi. All imported goods as well as transport documents must show standard units of measurement and weight.

You must comply with these requirements for your consignment to be cleared by customs in India.

Slightly different arrangements apply to pre-packaged commodities such as raw materials or components that need further processing before they are sold to consumers.

Intellectual property (IP) in India

You must register your intellectual property in India to guard against potential infringement. Registration of patents and trademarks can take months and sometimes years, so you should plan well ahead.

If faced with infringement or piracy you should engage a local legal practitioner who understands the context and has experience of initiating appropriate civil or criminal proceedings.

Read guidance on how to protect and enforce your intellectual property rights in India.

Taxation in India

India has signed a Double Taxation Agreement with the UK.

If you’re registered for Value Added Tax (VAT) you can zero-rate the VAT on most goods you export to India. You will need to get evidence of the export within 3 months from the time of sale.

Corporate taxation in India

If you set up an office in India, corporate tax will apply.

Non-resident companies and branches of foreign companies are taxed at a rate of 40% plus other surcharges. Domestic companies and partnerships are charged at 30% plus surcharges.

India makes provision for advance rulings to guide investors and exporters on their tax liabilities, and on the customs and excise duty implications of transactions.

Customs and documentation for India

Complying with HMRC regulations to export to India

You must make export declarations to HMRC through the National Export System (NES) to export your goods to India.

You must classify your goods as part of the declaration, including a commodity code and a Customs Procedure Code (CPC).

Find commodity codes and other measures applying to exports in the UK Trade Tariff.

Find out how to contact the HMRC Tariff Classification Service for more help.

You must declare any goods that you take with you in your baggage to sell outside the EU.

Temporary export of goods to India

You can use an Admissions Temporaire (ATA) Carnet to simplify the customs procedures needed to take goods into India temporarily.

You need an export licence to take dual use goods to India, temporarily

Use the SPIRE system to apply for a temporary export licence.

Customs in India

The Central Board of Excise and Customs provides information on Indian customs tariffs. India’s current customs regulations are guided by the Foreign Trade Policy 2015 to 2020.

The applicable customs duty can be calculated online through the Custom Duty Calculator. In general, the value of imports is based on the transaction value.

You can find more about import tariffs in the Market Access Database.

Your goods should be appropriately packed for India. Packages may receive heavy handling and be left in the open air for longer than anticipated, so you must take into account India’s climate.

Documentation in India

Mandatory documents required for import of goods:

  • bill of lading or airway bill
  • commercial invoice cum packing list
  • bill of entry

The MCI publishes a listing of restricted and prohibited items.

Shipping your goods to India

If you are not knowledgeable about international shipping procedures you can use a freight forwarder to move your goods. A forwarder will have extensive knowledge of documentation requirements, regulations, transportation costs and banking practices in India.

Find freight forwarding companies to help you transport your goods to India via the British International Freight Association (BIFA) or the Freight Transport Association (FTA).

Posting goods to India

Find out about sending goods by post to India.

Shipping dangerous goods to India

Special rules apply if you are shipping dangerous goods to India.

Terms of delivery to India

Your contract should include agreement on terms of delivery using Incoterms.

Growth potential in India

The International Monetary Fund (IMF) has forecast 7.5% growth in Gross Domestic Product (GDP) for 2016.

India has removed the majority of its trade barriers to improve the business environment. Huge investment potential exists in sectors such as life sciences, manufacturing, energy and infrastructure.

Free trade agreements with India

A free trade agreement between the EU and India is currently being negotiated.

Opportunities for UK businesses in India

DIT provides free international export sales leads from its worldwide network. Find export opportunities in India.

Read more about emerging sectors in India.

Contact kevin.mccole@ukibc.com or richard.mccallum@ukibc.com at UKIBC to find out about sectoral opportunities in India.

India has opportunities in all sectors as it expands and develops. It is a price-sensitive market, but there’s a natural fit between the UK and Indian economies. UK companies offer goods, technology, services and expertise in the areas that India has identified as critical for rapid economic development including:

  • finance
  • infrastructure
  • energy efficiency
  • vocational skills and education
  • healthcare

Language and culture in India

India is hierarchical, even in the office situation. In meetings, small talk, particularly about the family, is highly valued as you build a relationship.

Important rules of behaviour include:

  • using your right hand in all situations
  • always having a business card to present

Business and official contacts are addressed as Mr/Mrs/Ms or Sri/Smt (Srimati) with surname. Refer to business superiors and those senior in age as ‘sir’ or ‘madam’. Do not use first names unless invited to do so.

Find more information on business culture in India.

Entry requirements for India

All visitors must have a valid passport and visa.

Business visas have a validity of 6 months to one year or more with single or multiple entries. However, the period of stay in India for each stay is limited to 6 months.

The validity of the visa begins from the date of issue by the High Commission of India and not from the date of travel on your application form.

Find out more information on how to apply for a business visa for India.

Travel advice for India

If you’re travelling to India for business, check the FCO travel advice page first.

DIT and partner contacts in India

Find a local DIT trade adviser if you are interested in finding out more about doing business in India.

Contact the DIT team in India for more information and advice on opportunities for doing business in India.

Contact kevin.mccole@ukibc.com or richard.mccallum@ukibc.com at UKIBC for business support services in India.

Published 12 November 2016
Last updated 18 November 2016 + show all updates
  1. Changed HMRC tariff code contact details
  2. First published.