Import Duties for Ecommerce in India

The basics: what actually gets charged at the border

When inventory enters India, two main charges apply before goods clear customs. Basic customs duty (BCD) is calculated on the assessed value of the goods and varies significantly by product category and HS code classification. On top of BCD, IGST (integrated GST) is charged on the sum of the goods value, freight, insurance, and the BCD itself, meaning IGST is calculated on a base that already includes the duty, not just the product price.

The combined effect is that landed cost is rarely just "product cost plus a flat percentage." It compounds. A product with a modest BCD rate can still end up with a noticeably higher total import cost once IGST is layered on top of the duty-inclusive value. This is one of the more common miscalculations foreign brands make when first pricing for the Indian market.

How landed cost actually gets calculated

Landed cost is the true cost of getting a unit of inventory into a sellable state in India: product cost, international freight, insurance, basic customs duty, IGST on the duty-inclusive value, and any customs clearance or handling fees. Brands that price off their home-market cost of goods and simply add a rough markup for "India costs" tend to either overprice themselves out of the market or underprice and quietly erode margin.

The HS code classification matters more than most first-time importers expect. The same general product category can carry different duty rates depending on material composition, intended use, or specific classification, so getting the classification right at the outset avoids both overpaying and the compliance risk of underpaying.

Why pricing strategy has to build this in from day one

A brand that sets its India retail price before understanding landed cost is essentially guessing at its own margin. This matters more in India than in some markets because Indian consumers are price sensitive and comparison shop actively, so there is limited room to quietly raise prices later to fix a margin that was never calculated correctly in the first place.

The practical approach is to model landed cost per unit before committing to a retail price, not after the first shipment has already cleared customs. This also affects decisions like which SKUs to launch with. A product with a high duty rate might not be viable at a price point that works for the category in India, even if it sells well elsewhere.

Where brands get tripped up at the border

Incomplete or inconsistent documentation is the most common cause of customs delays, not the duty rate itself. Mismatched invoice values, unclear product descriptions, or incorrect HS codes can hold a shipment at port for days or weeks, which is expensive both directly and in lost selling time, especially around peak season when timing matters most.

Brands new to Indian customs also sometimes underestimate how much documentation and process consistency matters across repeated shipments, not just the first one. A single clean shipment does not guarantee the next one clears smoothly if the paperwork process is not standardized.

Where a fulfillment partner reduces friction

This is one of the areas where experience compounds. A partner that has cleared shipments through Indian customs repeatedly knows which documentation gets flagged, which HS code classifications hold up to scrutiny, and how to keep landed cost calculations accurate rather than approximate. CPKfulfill handles GST and customs compliance as part of its core service, which takes this off a brand's plate entirely rather than leaving it as a one-off problem to solve before every shipment.