Import Trade Procedure and Documents

Import trade procedure mirrors export procedure from the other side of the transaction, but the sequence of steps and the documents examined most closely are different, because it is now the Indian buyer's customs authorities that must be satisfied before the goods are released.

Trade enquiry and order — The prospective importer first makes a trade enquiry with foreign suppliers, compares quotations, and places an import order (indent) specifying the goods, quantity, price, packing and delivery terms. As with exports, the importer must hold a valid Importer-Exporter Code (IEC), and for certain restricted or canalised goods, an import licence.

Arranging finance and shipment — The importer usually arranges for a Letter of Credit to be opened through its bank in the exporter's favour, so the exporter is assured of payment once the required documents are presented. Once the exporter ships the goods, a shipment advice is sent, and the set of shipping documents reaches the importer through the banking channel.

Receipt of goods and customs clearance — On the ship's or aircraft's arrival, the carrying agent files an Import General Manifest. The importer, through a clearing agent, files a Bill of Entry with customs — the principal document for import clearance, historically issued in three colour-coded forms (white for home consumption, yellow for warehousing, green for ex-bond clearance), now largely processed through the electronic ICEGATE system. Customs examines the goods, assesses the applicable duty (basic customs duty, IGST, and cess where applicable), and releases the goods once duty is paid.

Final settlement — The importer takes delivery, inspects the goods against the invoice and packing list, settles any claim for shortage or damage with the insurer or carrier, and completes payment to the exporter as agreed under the Letter of Credit or other payment terms.