Duty and taxes to India

Question posted by ZAKARIYA BUTT

Hi, would appreicate some help. I am in the process of promoting a confetionery brand franchise to India.

I have looked at the duty and taxes and If I am right it is over 50%...have I got this right? The products are hard boiled sweets, chocolate etc... I am trying to get my head around this as it is so high.

How are companies able to take a brand to India when the government is charging these high taxes? Can someone tell me if what I have researched is correct and also if there is some other way of lowering these charges.

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Dipankar Chakraborty, on behalf of UK Trade & Investment India in Kolkata, India.

Dear Zakariya,

To introduce myself, I work for the UK Trade & Investment (UKTI) in India and focus on food & drinks sector. As you may be aware, UKTI is part of Her Majesty's Government (HMG) that helps British businesses grow through international trade.

With reference to your question, you will first need to identify the Harmonised System (HS) code for your product in order to ascertain the exact duty structure. There is no way to reduce and/or escape the tariffs, unless you are manufacturing them locally in India.

Apart from the high duties, food labelling is cureently a barrier in India. The Food Safety and Standards Authority of India (FSSAI) has been cracking down on imported food if the consignment do not have Indian specific labelling. Huge consignments from top brands like Lindt, Mars, etc are stuck because of labelling issues.

If you want more details, please feel free to write to me at dipankar.chakraborty@fco.gov.uk

Best regards,
Dipankar

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Hello Zak,
the cost of doing business internationally varies greatly country to country and can most certainly be a barrier to business in some places. It is essential that before signing any export contracts you work out all the costs that will apply to your particular products and arrangements. There is a useful free webinar on Open to export regarding costing should you wish to view it. In addition to the costs mentioned about you may find you need to obtain / provide special certificates regarding ingredients, production methods, health and hygiene.

Also take care to include an INCOterm in your contract so that everyone knows who is paying for which part of the goods movement and who is responsible / liable for each part of the goods movement. Take care to use one that is correct for the method of transport chosen e.g. FOB is only acceptable for non containerised seafreight. The more usual term would be FCA. All INCOterms should have a named place that is specific not just a city name.

Regards,
Susan

enquiries@morley-consulting.co.uk
www.morley-consulting.co.uk

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