Import Dairy Products In India
Complete Guidelines to Import Dairy Products In India
India was the largest milk producing country and consumer in the world and last year India produced close to 146.31 million tonnes of milk. Key dairy products include processed/packaged milk, milk powder, and other dairy-based, value-added products like butter, cheese, curd, buttermilk, fruit yogurts, etc. Milk and cream concentrate, whey powders, and cheese is the major products imported among dairy products. China is the largest supplier of dairy products to India. Since 2000, China has increased its milk production over 300 percent. The Chinese government continues to actively encourage expansion of its dairy industry, including foreign investment in dairy farms. Here are the procedures and regulation to Import Dairy Products from China.
Selecting the Commodity: Importers should select their goods only after considering various commercial factors as well as regulations contained in the EXIM Policy. Import of restricted goods is permitted through licensing while canalized items can be canalized only through specified State Trading Enterprises (STEs).
Selecting the Overseas Supplier: Importers can import from any country of the world and the information regarding overseas suppliers can be obtained from various, generals, international trade fairs and exhibitions and trade directories Consulate chamber of commerce.
Capability and Creditworthiness of Overseas Supplier: Successful completion of an import transaction mainly depends upon of the overseas supplier’s creditworthiness. Therefore, it is necessary to verify the creditworthiness and Capacity to fulfill the contract through confidential reports about him from the banks and Indian embassies abroad.
Role of Overseas Suppliers, Agents in India: Some reputed and renowned overseas suppliers have their indenting agents stationed in India. These agents procure orders from the Indian firms/companies and arrange for the supply of goods from their principal abroad. Therefore, it is advisable to import through such agents as they can be readily contacted in case there is any dispute regarding the quality or quantity of, receipt of payment, documentation formalities, etc. of imported goods.
The inquiry, Offer and Counteroffer: It is necessary that before finalizing the terms of import order, one should call for the samples or catalog and other specifications of the items to be imported. Then after satisfying himself with the samples, the importer should proceed to finalize the terms of the contract to be entered into.
Import Dairy Products
Process and formalities to Import Dairy Products
This post provides you basic information on how to Import Dairy Products. Apart from regular procedures and documentation, special requirements to import Milk and milk products are explained in this article. The exporters and importers may follow the specific requirements of each importing country to import live animals from a foreign country. When discussing the procedures to Import Dairy Products from another country, the basic slogan must be kept in mind – “Any import of Dairy Products does not adversely affect the human and animal health population of the country”, so all restrictions, ban, procedures, and formalities are based on this slogan.
Some of the examples of Dairy Products are Milk, Cream, Buttermilk, Curdled Milk, Yogurt, Kephir, Whey, Diary spreads, Cheese, Curd, etc. The Import Dairy Products from some of the countries is prohibited by most of the countries due to health and sanitary threat for humans and animal. However, some countries restrict the import of milk and milk products subjected to obtain various certificates from government agencies of importing countries.
In India, Director General of Foreign Trade (DGFT) is responsible and is the chief governing body for all the matters related to Import and Export Trade Policy. And to Import Dairy Products in India, the FSSAI Food Safety, and Standard Authority of India is the chief governing body that regulates the import of food and Dairy products. The FSSAI is an effective food control regulatory body to safeguard and promote a trustworthy and honest food presentation and supply culture. Importers in India who are willing to buy dairy products should be aware of the various guidelines and procedures relating to Import Dairy Products. Before starting an import business, various licenses and registrations are required in India:
- It is better to have a registered company before you start your business as it helps you to improve the transferability of business.
- The next essential thing is VAT registered for the sale of goods and products in India.
- A current bank account with a SWIFT code.
- Tax Identification Number is required.
- The necessity of IEC code, a 10 digit code, issued by DGFT, Government of India to import from China to India.
- Every importer needs to submit Bill of Entry that certifies description and values of each item coming into the country.
Import Dairy Products
The company or a firm must engage an experienced custom Clarence agent or broker who has experience dealing with dairy products in the past. Then, the agent/broker will be responsible for all documentation and for arranging shipment, insurance, custom handling, and Clarence in India. Once the product arrives in India, the custom Clarence agent would be notified and then he makes customs duty payment and clears the goods through customs. After that FSSAI department would be notified and an inspector from FSSAI dept. would then ensure the products conform to FSSAI Labeling and FSSAI standards. If approved, the dairy products will be released to the importer in India.
Orders and guidelines to Import Dairy Products in India
In India, FSSAI is food control regulatory body which ensures that consumers are protected from adulterated, spoiled, and contaminated foods. It is observed that the food law is divided into two parts: Regulations and the basic food act. The regulations pertain with detailed provisions and the Food Act lays down a broad range of principles. Here are basic food laws and principles:
- The scope and the intention of the law
- Basic concept definitions
- Capacity for legal implementation.
- Labeling and packaging
- Enforcement procedure and policies
- Procedures to be followed and amend the regulation
- Inspects facilities and analytical processes
- Guidelines and regulation of pesticides, additives, and contaminants.
A strict adherence to these principles of the food laws encourages compliance that leads to the adoption of fair trade practices. It ensures and safeguards the interest of the honest manufacturer of food products from unethical businesses that create an unfair competition.
FSSAI Food Import Regulations
The Food Safety and Standards Authority of India (FSSAI), in order to simplify the clearance process, issued a notification on import regulations. The FSSAI welcomed all the suppliers and distribution supply chain to voice their opinions and concerns, after a thorough consultation process, the Food Safety and Standards (Import) Regulations, 2017 was notified. Here are notable highlights of the Food Import regulations:
License requirement for Food Business Operators (FBOs) and Importers:
- The regulation requires the Food Business Operators/Importers to register themselves with the Directorate General of Foreign Trade (DGFT)
- And have an import license granted by the Central Licensing Authority.
- A valid Import-Export code is necessary for the Food Importer.
Regulations pertaining to Shelf-life of the products:
- Food products that declare a shelf-life of less than 60% of original shelf life, an authorized officer, would sample the food products and grant a No-Objection Certificate (NOC) to the Customs and Clearance authority, without having to wait for the laboratory analysis report.
- If the food samples are found to be in violation of the given standards, the authorized officer would inform the Customs clearance Agent /importer to recall the said food consignment and within 24 hours, furnish a compliance report to the FSSAI.
The Food Safety and Standards Authority of India (FSSAI) have adopted a mechanism that would clear the imported food product depending on a risk-based inspection and a risk-based framework. The procedure and documentation required for the clearance of food consignment are discussed below:
- An application for clearance of Import consignment must be submitted by the food importer. The application must contain details of the Food importer; namely, address, email id, Food importer’s code etc.
- The application must also contain the details given below:
- Date of packaging
- Expiry date
- Exporting country’s name
- Manufacturing place
- Dispatch date of the food product from the exporting country.
- Description and Quantity of food product
- FSS code of the food product as mandated by the FSSAI
- Food Product Consignment Invoice Value in INR
MOUs with Trade Partners:
The Ministry of Commerce and Industries (MCI) with the Food Safety and Standards Authority of India (FSSAI) try to seek entering into Memorandums of Understanding (MOU), which would work on a reciprocal basis, with agencies and allied service providers in exporting countries to accelerate the process of clearance of consignments of food products from such countries.
Guidelines for Labeling and Packaging
- The dairy products that are imported must mandatorily comply with the Labeling and Packaging.
- The Labeling and Packaging regulation accounts for special exemptions of labeling of the name and address of importing company, the importing company must attach the Veg/Non-Veg logo in a customs warehouse, after the import of the dairy product consignment.
The imported dairy product from which the sample shall be obtained must have the label information as specified below:
- Location and Date of sample collection
- Name of the dairy product
- Sample code number
- Sample quantity obtained
- If preservatives are added to the dairy product for sampling purposes, the name of the preservative.
- Official acknowledgment of signature and name of the sender.
- Signature and name of the Clear House Agent and/or the dairy product consignment importer
Process of Reviewing Application
The Food Safety and Standards Authority of India (FSSAI) have set up a mechanism so that the Importers who Import Dairy Products consignment can file a review application, addressed to the reviewing officer; should the importer have been aggrieved by any orders of the Authorized Officer mentioned below:
- An order that directed the dairy product importer to correct the product label.
- A report from the food analyst that states that the dairy product is non-compliant with the FSSAI regulations, leading to rejection.
- Any form of non-conformity with the regulations that lead to rejection of the dairy products from being cleared.
Import Duties and Taxes:
HSN Code: – In India HSN code for Dairy product is 0401
- The basic duty which is a typical tax that applied to all goods, but to Import Dairy Products is 30%.
- CVD additional duty: It is levied on imported goods in lieu of excise duty levied on goods/items manufactured in India, but it is nil on dairy products.
- Central Excise Education Cess: A tax which is designed to fund education healthcare initiatives. It is 3% of Dairy products.
- Custom Education Cess: It is levied at the rate of 3% to Import Dairy Products.
- Special CVD: It is applicable on all imported items in India and levied at the rate of 4% on import of Dairy products.
In India, GST rates have been fixed in five slabs namely NIL, 5%, 12%, 18%, and 28%.
NIL GST Rate Products
- Fresh milk and pasteurized milk, including separated milk, milk, and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk
- Chena or paneer.
5% GST rate on Import Dairy Products Like:
- Ultra High Temperature (UHT) milk
- Milk and cream concentrated or containing added sugar or other sweetening matter, including skimmed milk powder, milk food for babies, excluding condensed milk.
- Cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavored or containing added fruit, nuts or cocoa.
- Chena or paneer put up in a unit container and bearing a registered brand name.
12% GST rate on Import Dairy Products Like:
- Butter and other fats (ghee, butter, oil, etc.) and oils derived from milk; dairy spreads
18% GST rate on Import Dairy Products Like:
- Condensed milk
No milk, dairy products attracts 28% GST rate.
Now, hire a professional customs broker/ agent who will take care of all the documents and responsibilities of calculating the payment of taxes, duties, excise, handling charges, transportation cost, and communication with other authorities regarding the import of Dairy products.
Why India Import Dairy Products?
The rising income groups of consumers in India and their spending patterns of consumption related items have resulted in faster rising imports demands of the country.
- Reasonable price: International prices of Dairy products are reasonable due to a glut in the international market.
- Efficient Supply Chain: Supply chain includes the transformation of natural resources, raw materials, and components into a finished product. That is delivered to end customer. And China’s supply chain is commendable, sophisticated, and flexible to Import Dairy Products
- Availability of cheap labor: China has the world’s cheapest labor and that’s what makes the difference is the efficiency of labor. For the past four years, Chinese laborers wages has been consistently increasing and which led to increases in productivity.
Benefits to Import Dairy Products
Produced goods efficiently: In China, the technology, labor costs, government incentives, and subsidies provide bulk production of dairy products.
The increase of sale: Importing in India is a huge business. Importing from China results in an increase in sales as the market for good broadens.
Creating jobs: Importing results in the companies to expand their market, which makes them recruit candidates who are experts in the respective fields.
Higher standards of living: Importing allows the country to achieve higher standards of living by obtaining products and resources that cannot be obtained domestically. Like India import dairy products in order to maintain its standard of living, since India cannot produce a sufficient amount to satisfy consumer demand.
Rise in the profit level: Buying bulk goods from China at a cheaper price and with lower taxes provides a significant profit.
Major Chinese Suppliers
- Huatao Group
Location: Shijiazhuang, China
- Shanghai Jimei Food Machinery Co. Ltd
Location: Shanghai, China
- Jiangyin Star And Food Machinery Co. Ltd
Location: Jiangsu, China
- Beijing Sentinain Technology, Inc.
Location: Beijing, China
- Zhengzhou Kaixue Cold Chain Co. Ltd.
Location: Zhengzhou, China
Minimum Order Quantity
The MOQ for import of dairy product generally depends on what type of products you are importing and from whom. MOQ varies product to product also depends very much on the supplier. For example, if you are importing a can of infant milk powder then the MOQ sets of 8400 pieces similarly if you are importing gelatin for a yogurt, then the MOQ is 1 million tonnes, etc. In some products of Dairy, the MOQ is negotiable.
Find a Suitable Supplier and place the order
Place your order with the exporter or supplier and identify shipping terms that will be used. Once you have selected your supplier, and then request a Proforma Invoice for your purchases to include the HSN system and description and value of each good. Your P/I must also show the weight and packed dimensions and your terms of purchase.
Arrange your cargo transport
There are many costs related to shipping goods are container fees, packaging, terminal handling, and broker fees. And to get a complete picture of shipping costs, each of these prices should be taken into account. Now, once satisfied with the freight quote you will need to send supplier’s contact details. They will take goods from there and also make your transportation quick and safe.
Track your cargo: Shipping goods internationally takes time. So, during that time, you must check your commercial invoice, packaging list, the bill of lading, and other freight documents. If then a problem arises then, you should know the steps from which your goods go through when being cleared by customs of your country.
Obtain your shipment: When the goods arrive, make arrangements for your customs clearance agents to clear the goods and services through custom. And if everything goes, then, then it’s your right to pick up your shipment.
CUSTOM CLEARANCE PROCEDURES IN INDIA
All items/products imported in India have to pass through the customs clearance after they cross the Indian border. The imported goods are examined, assessed, evaluated, and then allowed to be taken out of customs charge for use by the importer. The procedures for Customs clearance of goods imported in India are as follows:
Import Manifest: As per the section 30 of the Customs Act, 1962, the persons who are in charge of carrying imported goods should hand over, within 24 hours of the arrival of the conveyance, an import manifest to the customs. The import manifest is a complete list of all goods/products the conveyance carries on board, including those to be transshipped and those to be carried to the subsequent ports of call.
Entry in the Import Department of Customs House: On receipt of information regarding the arrival of the goods, the importers or their customs agents/broker information to make an entry by filing a Bill of Entry, in the Imports Department of Customs House
Clearance of Goods: After payment of duty, the importer should give the duplicate copy of Bill of Entry on which order for examination of the goods is given by Customs and get the goods examined. If the description of goods is found to be correct, on the basis of declared particulars, clearance of goods is allowed.
Warehousing the Goods: The imported goods can be warehoused at the port of shipment, without the payment of duty by presenting a “Bill of Entry for Warehousing”. The warehoused goods can be cleared in one or more installments.
Foreign Exchange: Once the importer is allowed to remit foreign exchange out of the country, he has an obligation to import the permitted goods. If the goods of lesser values are imported then it would lead to leakage of foreign exchange.
Letter of credit: It is the well-known method of payment in International trade. Under this, importer’s bank guarantees to the supplier’s bank that the bank will pay given the amount of the agreement, once the supplier meets the terms and conditions of the letter of credit.
Bank Drafts and Cheques: A bank draft is a payment order issued by an importer’s bank on its own branch. The bank draft then is handed over to the buyer who sends it to the beneficiary. The beneficiary obtains payment on presentation to the bank on which the bank draft is drawn. Bank drafts and cheques are the most popular methods of remittances.
Bill of Exchange: A bill of exchange is an order drawn by the exporter and sent to the importer through a commercial bank. Bill of exchange is an important method of payment.
Telegraphic Transfer (TT) This is a method of foreign payments in which importer through telegraphic transfer the funds to the exporter in foreign countries. The money is deposited with the commercial banks in India and the Indian banker sends a telegram to the foreign branch to make certain payments to the exporter, on that very date. Then, the foreign branch makes the necessary payments in foreign exchange to the exporter. Telegraphic transfer is the quicker method of transmitting funds and involving no risk.
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