Indian Customs Duties on Consumer Goods Imported into India

Aug 10, 2010
Daniel Workman

Imported Shaving Cream Charged 35% Duty in India - dominikgolenia (Flickr)

How much are India's tariff duties charged on popular consumer goods including bottled water, cheese and flu medicine? Read this article to find out.

With a population of 1.17 billion, India is a compelling import market for exporters looking for volume sales.

This analysis examines tariff duty rates on 10 popular consumer products imported into India. Indian custom rates are then compared with customs duties in effect in Canada and the United States for those same goods.

In general, India imposes much higher customs tariff rates on imported goods.

India Customs Tariff Rates for Sample Consumer Products

The harmonized tariff schedule (HTS) codes shown below are based on India’s Customs Tariff, which may be slightly different from harmonized codes used in Canada and the United States. While the first 6 digits are usually the same from country to country, each nation assigns different seventh and eighth digits for their own statistical reporting purposes.

Seven of the following 10 imported consumer products are subject to customs duty rates of 35% or higher.

Bottled water (HTS code 2201.90.10) … 35% of imports’ declared value
Cell phones (8517.19.90) … 25%
Computer parts and accessories (8473.30.10) … 15%
Flu medicine (3002.20.00) …35%
Hard cheese (0406.90.00) …40%
iPad (8471.30.00) … 15%
Perfume … (3303.00.00) … 35%
Running shoes (6404.11.00) … 35%
Shaving cream (3307.10.00) … 35%
Sunglasses (9004.10.00) … 35%.

The lowest tariff duty rate among these 10 products is 15% on computer technology products, specifically computer parts and accessories. The Apple iPad also qualifies for the 15% customs rate.

Canada’s Customs Rates Compared with India’s Tariff Rates

For all 10 consumer products, Canada’s Most Favoured Nation (MFN) tariff rates are much lower than those charged in India.

Bottled water … 6.5% of imports’ declared value (538% lower than India’s tariff rate)
Cell phones … duty free
Computer parts and accessories … duty free
Flu medicine … duty free
Hard cheese … 2.84 cents per kilogram
iPad … duty free
Perfume … 6.5% (538% lower than India’s rate)
Running shoes … 16% (219% lower)
Shaving cream … 6.5% (538% lower)
Sunglasses … 5% (700% lower).

The highest Canadian tariff rate is 16% on running shoes, but even that is less than half of the 35% customs duty charged on athletic shoes imported into the Republic of India.

US Customs Rates Compared with India’s Duties

U.S. general tariff rates for these 10 imported items are also much lower than Indian customs duties. In fact, 6 of the 10 consumer products are duty free goods at the American border.

Bottled water … duty free
Cell phones … duty free
Computer parts and accessories … duty free
Flu medicine … duty free
Hard cheese … 12% of imports’ declared value (333% lower than India’s rate)
iPad … duty free
Perfume … duty free
Running shoes … 10.5% (333% lower)
Shaving cream … 4.9% (714% lower)
Sunglasses … 2% (1,750% lower).

Among those consumer goods that are subject to American customs duties, the lowest ad valorem rate is 2% for sunglasses. The Indian tariff duty rate for sunglasses is over 17 times higher.

Italian exporters sending a commercial shipment of sunglasses worth US$100,000 to the United States would pay $2,000 in customs duties.

That same shipment imported into India would be charged $35,000 in tariffs.

International Trade Leads Must Factor in India’s Higher Tariffs

India has a large population with increasing discretionary income for spending on imported consumer goods. However, international traders looking to sell their goods to Indian consumers must carefully assess the impact of India’s higher customs duty rates.

For the 10 consumer products in this brief review, the average tariff duty rate is 5% when imported into Canada. The average customs duty is an even lower 3% if imported into the United States. If those same consumer products are imported into India, the importer has to pay an average 31% in tariff duty charges.

Importers then pass on that expense to the ultimate consumer by factoring in the customs duties in the final price. The key question then becomes whether Indian consumers are still willing to pay for the imported products after prices have been raised by 30 to 40% or more.