Why Understanding Import Procedures is Critical?

SMEs must navigate import operations correctly. Mistakes can lead to:

• Delayed shipments

• Higher customs duties or fines

• Low product quality

• Cash flow issues

A clear stepwise process ensures smooth clearance, compliance, and timely delivery, allowing SMEs to maintain reliable supply chains.

Step 1: Confirm Supplier & Place Order

1. Finalize Supplier

   • Use the scoring and evaluation from Post 8.

2. Confirm Order Details

   • Quantity, price, delivery timeline, payment terms

   • Agree on Incoterms (EXW, FOB, CIF, DDP)

3. Proforma Invoice (PI)

   • Supplier provides PI; confirm HS code, product details, and total cost including shipping and duties

Actionable Tip: SMEs should retain PI copies for customs clearance and bank transactions.

Step 2: Arrange for Import Documentation

1. Commercial Invoice

   • Used for customs clearance

2. Packing List

   • Itemizes packages, weight, and dimensions

3. Bill of Lading / Airway Bill

   • Contract with freight forwarder

4. Certificate of Origin

   • Confirms product origin for preferential duty rates (if applicable)

5. Other Certificates

   • Quality certifications, compliance documents, insurance certificates

Step 3: Verify Import Compliance

• Ensure IEC registration (read here) is active

• Check HS code assignment (read here)

• Confirm product-specific regulations for your import category

  • Food items → FSSAI

  • Electronics → BIS certification

  • Chemicals → hazardous material compliance

Actionable Tip: Use official customs portals for product-specific compliance checklists.

Step 4: Choose Shipping & Freight Forwarding

1. Sea Freight – cost-effective for bulk imports

2. Air Freight – faster for high-value or perishable goods

3. Courier / Express Service – for small shipments

4. Confirm shipping terms per Incoterms (CIF, DDP, etc.)

5. Arrange insurance for cargo

Step 5: Customs Clearance in India

1. Filing Bill of Entry (BoE)

   • Mandatory for imports

   • Include HS code, supplier details, value, and product description

2. Customs Assessment

   • Customs may inspect goods or documents

   • Ensure accuracy in quantity, value, and documentation

3. Payment of Duties & Taxes

   • GST, basic customs duty, IGST, anti-dumping duty (if applicable)

   • Use official customs duty calculators

Pro Tip: SMEs can hire licensed customs brokers to ensure error-free clearance.

Step 6: Cargo Release & Delivery

• After duties are paid and customs clearance completed:

  • Cargo is released by port/airport authority

  • Arrange inland transportation to warehouse or factory

• Track shipments and confirm delivery timelines with suppliers and freight forwarders

Step 7: Payment Settlement

1. Payment Terms

   • LC, advance payment, DA/DP per supplier agreement

2. Foreign Exchange Conversion

   • Use authorized banks for currency conversion

Actionable Tip: SMEs should maintain a payment ledger for import transactions to avoid disputes or double payments.

Step 8: Post-Import Compliance & Record-Keeping

• Retain all import documents for 5 years

• Audit for GST and customs compliance

• Evaluate supplier performance for future orders

Tip: Regular record-keeping ensures smooth audits and future imports.

Step 9: Actionable SME Exercise

1. Confirm first import order

2. Collect all required documentation

3. Choose shipping mode and freight partner

4. File Bill of Entry and pay duties

5. Receive cargo and confirm quality & quantity

6. Record payment and update supplier scorecard

Completing these steps ensures your first import shipment is compliant, on time, and low-risk.

The next step is understanding financing options for scaling operations

Read: Export & Import Financing Options for SMEs