You found a product on Alibaba at ₹90 that sells in India for ₹699. The margin looks unreal. So the plan writes itself: import a container, undercut everyone, print money. That is where most first-time importers get hurt.
The ₹90 price is the factory gate price in China. By the time that product sits in your warehouse in India, ready to ship, it has picked up freight, customs duty, a clearing agent's fee, sometimes mandatory certification, and a currency spread. That real number is your landed cost, and it is the only number that matters. This guide shows you how to compute it before you wire a single dollar, so you know whether China is actually cheaper or just looks cheaper.
This is written for a D2C founder importing their first batch, not a full-time importer. The process is the same. The stakes are just higher when it's your own cash.
To import from China legally you need an IEC (Import Export Code) from DGFT, a ₹500 one-time fee. You source on Alibaba, 1688 or Made-in-China, order samples first, and vet the supplier before any bulk order. You ship by sea (cheap, 3 to 5 weeks) or air (fast, costly). At the Indian port a customs agent clears your goods, and you pay duty: Basic Customs Duty plus a 10% surcharge on it, plus IGST. Regulated goods like electronics and toys need BIS certification or they get stuck at customs. Add every cost, divide by units, and that landed cost, not the factory price, decides if the deal is real.
First: is China even the right call?
Before the how, settle the whether. Importing makes sense when the product genuinely doesn't exist at a good price in India, or when Chinese factories are years ahead on tooling and finish (gadgets, phone accessories, small electronics, certain home and kitchen items). It's a poor call when a domestic supplier can match the quality at a landed cost that's close, because local sourcing means no customs risk, no 5-week lead time, smaller minimum orders, and you can reorder in a week.
Plenty of founders assume China first and never price the Indian option. Do both. Read how to find manufacturers and suppliers in India and get a real domestic quote before you commit to importing. Then compare landed costs, not sticker prices.
Step 1 · Get your IEC (you cannot import without it)
The IEC (Import Export Code) is a 10-digit code from the DGFT (Directorate General of Foreign Trade). It's your licence to import. Without it, customs simply will not release your goods.
Getting it is easy and cheap. You apply online on the DGFT portal using Form ANF-2A, upload your PAN, Aadhaar, address proof and a cancelled cheque, and pay a one-time government fee of ₹500. The code usually arrives in 1 to 3 working days and has lifetime validity. One catch to remember: you must file a free annual IEC update on the portal between April and June each year, or the code gets deactivated and you're stuck at the port. Source: Vakilsearch, 2026.
Step 2 · Source and vet the supplier
Three places most Indian founders buy from:
- Alibaba.com: the international wholesale marketplace. English, escrow protection through Trade Assurance, suppliers used to exporting. Prices are higher because these factories court foreign buyers.
- 1688.com: Alibaba's domestic Chinese site. Much cheaper, MOQs often as low as 50 to 200 units, but it's in Mandarin and doesn't ship abroad. You need a sourcing agent to buy and consolidate for you. Source: Alibaba, 2026.
- Made-in-China.com: a third option, strong for industrial and hardware goods.
The single biggest protection against getting burned is the sample first rule. Never place a bulk order off a photo. Pay for 2 or 3 samples, hold the actual product, check the quality, the finish, the packaging. A ₹3,000 sampling cost is the cheapest insurance you'll ever buy.
Vet the supplier the same way every experienced buyer does: prefer a Verified or Gold supplier with real trading history, ask for a factory audit report or a live video walk of the production line, and confirm they can meet your specs in writing. For regulated goods, a third-party pre-shipment inspection from an agency like SGS or TUV, a few hundred dollars, catches a bad batch before it ships. Our supplier sourcing guide covers the full vetting method.
Supplier Scorecard™: before any bulk order, score the supplier on five things, sample quality, response speed and clarity, verified trading history, willingness to do a video factory tour, and written spec agreement. If a supplier fails two of these five, walk away. A great price from a supplier who ghosts you after the deposit is the most expensive price there is.
Step 3 · Understand incoterms (FOB vs CIF)
An incoterm is a standard code that says exactly where the supplier's responsibility ends and yours begins. Two you'll actually use:
- FOB (Free On Board): the supplier gets the goods onto the ship at the Chinese port. From there, sea freight, insurance and Indian clearing are yours. Best for control, because you (or your freight agent) choose the shipping line and see every cost.
- CIF (Cost, Insurance, Freight): the supplier arranges and pays sea freight and insurance to the Indian port. Simpler for a first-timer, but the supplier can pad the freight, and the destination charges at the Indian port are still yours.
For a first order, CIF is easier. Once you've done a few and have a freight agent you trust, FOB usually costs less overall because you control the freight leg.
Step 4 · Choose freight: sea or air
This choice moves your landed cost more than almost anything else.
| Factor | Sea freight (LCL) | Air freight |
|---|---|---|
| Typical cost | ~$45 to $120 per CBM (cubic metre) | ~$4 to $8 per kg |
| Transit time | 3 to 5 weeks door to door | 3 to 7 days door to door |
| Best for | Bulk, heavy, non-urgent stock | Small, light, high-value or urgent goods |
| Catch | Consolidation and destination handling fees | Cost kills margin on cheap/heavy items |
Source: Sino Shipping, 2026. For a first D2C batch that isn't a full container, you'll ship LCL (Less than Container Load), meaning your goods share a container with other importers. It's the sensible default. Air only makes sense for light, high-value products where speed matters more than freight cost.
Step 5 · Customs clearance and the CHA
When your shipment lands at an Indian port (Nhava Sheva, Chennai, Mundra), it has to clear customs before you can touch it. You do not do this yourself. You hire a CHA (Customs House Agent), a licensed broker who files the bill of entry, coordinates inspection, pays duty on your behalf and gets your goods released.
A CHA typically charges around ₹4,000 to ₹5,000 for a small, regular shipment, sometimes structured as roughly 1% of cargo value for larger or more complex ones. Worth every rupee, because a shipment stuck in customs racks up demurrage (port storage) charges of ₹5,000 to ₹10,000 a day. Source: Pazago, 2026.
Step 6 · The part everyone underestimates: duty
India charges import duty in three stacked layers. Getting this wrong is what turns a "cheap" import into a loss.
- BCD (Basic Customs Duty): the main duty, set by your product's HS code. For consumer goods it commonly runs 10% to 20%, with finished electronics around 20%. Check your exact HS code, rates vary a lot.
- SWS (Social Welfare Surcharge): a flat 10% of the BCD amount, not of the product value.
- IGST: the GST equivalent, charged on the total of value plus BCD plus SWS. Usually 18% for most goods.
The one bit of good news: if you're GST-registered, the IGST is claimable as input tax credit. It's a cash-flow hit at the port, not a permanent cost. But BCD and SWS are a true, unrecoverable cost. They go straight into your landed cost per unit. Source: Skydo, 2026. If you're not yet GST-registered, read GST for ecommerce sellers first, because without registration you can't claim that IGST back.
Notice what happened. A ₹100 CIF cost became roughly ₹124.50 of real, unrecoverable landed cost per unit once you strip the creditable IGST back out. That's a 24% jump before you've spent a rupee on marketing. Run this on your actual numbers before you assume China wins.
Step 7 · BIS and mandatory certification (the customs trap)
Many product categories cannot be imported without certification, and this is where founders lose entire shipments. Electronics, IT products (chargers, power banks, LED lamps, speakers) and toys fall under BIS CRS (Compulsory Registration Scheme). A foreign factory can't get this itself. It has to appoint an Authorised Indian Representative, and the process takes weeks and real money. Goods without valid BIS certification are detained or rejected at customs. Source: IndiaFilings, 2026.
The practical takeaway: if your product is a regulated category, either source only from a factory that already holds BIS registration for it, or budget the time and cost to get it, or pick a different product. Do not ship BIS-required goods and hope. You'll lose the lot.
A founder imported 1,000 LED desk lamps at a beautiful ₹140 landed cost. No BIS registration, because nobody told him lamps need CRS. The shipment was detained at Nhava Sheva. Between demurrage, legal back-and-forth and eventual re-export, he lost roughly ₹1.8 lakh and the entire order. The factory price was never the risk. The certification he skipped was.
The real timeline: 6 to 8 weeks, not 6 days
Set expectations. From "I found the product" to "stock in my warehouse" is realistically 6 to 8 weeks: 1 week to sample and vet, 2 to 4 weeks for the factory to produce your order, 3 to 5 weeks for sea freight and clearing. These overlap somewhat, but plan for two months. This is why you can't treat imported stock like a local reorder. Run out, and you're dark for weeks.
If your landed cost is more than 30% below the best Indian quote AND the product isn't a BIS/regulated category → import, the gap covers the lead-time and cash-lock risk. If landed cost is within 15% of a local supplier → source in India, the speed, smaller MOQ and zero customs risk win. If it's a regulated category and you're on your first ever order → either buy from a BIS-registered factory or start local. Don't make your first import a compliance gamble.
The number that ends most import dreams isn't duty. It's working capital. An import order locks your cash for 6 to 8 weeks before you can sell a single unit, and MOQs push you to buy more than you can move. I've watched founders sink ₹4 lakh into inventory that took nine months to sell. Order small on your first import even if the per-unit cost is worse. Prove it sells, then scale the order.
- Apply for your IEC on the DGFT portal (₹500, keep the annual update in your calendar).
- Get a real Indian supplier quote for the same product before committing to China.
- Order paid samples and vet the supplier on the Supplier Scorecard before any bulk order.
- Confirm the HS code and its exact BCD rate for your product.
- Check whether your category needs BIS, and confirm the factory holds it if so.
- Build the full landed-cost sheet: product + freight + BCD + SWS + non-creditable share + clearing.
- Pick a CHA and freight agent before the goods ship, not after.
- Start with the smallest viable order to prove sell-through before scaling.
- Register for GST so you can claim the IGST back.
Your next action today
Don't wire any money yet. Open a spreadsheet and build one honest landed-cost line for the product you're eyeing: factory price, freight per unit, BCD, SWS, clearing, and the non-recoverable duty. Put the best Indian supplier quote right next to it. If the imported landed cost isn't clearly and comfortably lower, your answer is India. Then feed that number straight into your pricing, using how to price a product in India, and check it survives in your D2C unit economics once RTO and CAC are in. Founders who do this one sheet before importing almost never lose a shipment. The ones who skip it fund the lesson.
If you'd like the complete execution system, calculators, SOPs, templates and operating frameworks behind this process, continue inside D2C Acquisition.Lab.
