Importing goods into India.

Every week   I get letters   either  asking how much  I paid for ATV in China or  how much import duty was charged by Indian customs.

Many of these enquiries happens to be just for creating nuisance and nothing is going to be achieved by those people. Still I politely used to reply every one of them.

The total amount I paid as cost to ATV manufacturer in China and to Indian customs do not give whole picture. About sixty five percent have been spent under above two headings whereas one third money have been spent to facilitate the transfer. In earlier posting have made a list where you have to spend money.

Here is an example. As I mentioned earlier procedure involved for customs clearance of very small consignment and very big are basically same, the charges may appear to be expensive for small consignment. The agency charges for me was INR 6500 which will be same even for a small consignment.

So importing small consignment hoping to get it bit cheaper is very foolish thinking. We have to import the things if and only if the goods are not available locally or monopoly dealers quote exorbitant prices for that.

Talking to Chinese about ATV Tow hook

Chinese comprehension of English is very poor. They are very polite and try to help you but many times will not able to grasp exactly what you mean. Here is a example of what I expected and what I got.

  I knew that my Chinese manufacturer fabricate the frame shown in a earlier blog post   and get most components from outside and assemble ATV. So it was possible for them to reinforce the appropriate parts to make frame stronger. I had made it clear to them that I need a tow hook if possible in the backside and given certain parameters like strong support at lowest possible point so that traction is not compromised. I had sent a marked photograph to emphasis my point. I did not know exactly how much this ATV can pull but needed a strong hitching point.

When I got the ATVs delivered I found there was nothing in the back but a  hook strapped to high position in the frame in the front   It was pretty useless accessory that I got as a compliment. They simply failed to understand my explanation.

I had numerous confusion about faulty import papers too. Many Emails were exchanged. The crucial document - Bill of Lading they sent did not mention Container number. This document  should be perfect in all respects.   So searching right container in vast Mumbai port was like looking for a needle in haystack. Luckily I was able to overcome all of those hurdles and get those ATVs home.

A T V manufacture in China

Chinese products are not junk. The quality is improving and they are successfully competing in world market. The manufacturers are numerous and quality is not uniform. In generic ATV market around the world, China is the leading producer. The China's production of ATVs, which consists mainly of 50 to 250cc models already accounts for about 50 percent of the world's total ATV output.

If you are thinking of importing from China, you have to do your homework first. To start with, no one over there makes an entire vehicle from the ground up. A manufacturer of frames will collect all the other needed items and 'assemble' them in their warehouses and put their name on it. So there is no dedicated assembly line but flexible facility to assemble the machines according to the orders. Many of them are capable of supplying more than 50 different kind of ATVs, Dirt Bikes and such products at short notice. We have to make sure machine we import are from a frame manufacturer that uses high quality 10 and 12 gauge steel - not very thin sections.

China manufactures much more than 50000 ATV of this most popular size, 110 cc ATV &  orders are distributed among more than 30 assemblers in Chongquing and Yongkang. More like making pump in Rajkot and cycles in Ludhiana. Most of the engine and gear box assemblies are sourced from two three engine manufacturers.  

The operating manual and parts lists usually supplied are not exclusive of the manufacturer but something procured off shelf. The sales executive who handled my order is working with a different ATV manufacturer now and so I do not have current picture of the situation at my supplier. The photos featured here are of my ATVs getting packed in a factory in Yongkang.

Most of the Chinese ATV sold in America are for kids and occasional riders, who are numerically in large numbers. Chinese ATVs are not as high quality as American or Japanese. They only cost a fraction of the cost though. You can be very safe if you do your homework well. I am very happy with the machine I have which I am using past twenty months. Both engine and frame work quality is very much  satisfactory.

Farmers monthly published my ATV story

A leading Kannada farmers monthly magazine Adike Patrike published my story of bringing ATV from China in its October 2007 issue.  Adike Patrike is   unique  monthly magazine   published   by  farmers  association.   Here is a copy  of  the  article.

 

 

Import procedure for my ATV

Finally  I  decided to get my  ATV  from  China.    It becomes more difficult to  finalize   as manufacture is scattered. Though limited to two cities, Chongquing and Yongkang, there are numerous manufacturers over there. It is better to call them fabricators as many of them procure the main components and mainly do the assembly. There is no regular assembly line with most of them and they assemble in batches as per the orders.

Pricing depends upon the order quantity. Normally container load order is expected and pricing given out. If we ask for fewer sample pieces, they expect premium on that depending on order size. Only after they receive your money, factories procure the components and start assembly. Normally they dispatch in ten days or two weeks.

The quotation and billing is done either as CIF or FOB. The CIF cost insurance freight billing means everything has been paid. The invoice should be very clear about freight &  insurance. Otherwise Indian  Customs will add 20 % as freight and 1.125 % as insurance to the Cost of the goods &  do the tax assessment.

This web page gives the fair idea of lengthy procedure involved in customs clearance.

http://jeena.com/cimp.htm

The IEC code is issued by DGFT and the Bank may insist on it while doing remittance for import purpose and the customs may ask while clearing the goods. Though it is not required for import of goods for personal use, we may have to do some convincing at the goods clearance time. It involves a fee of INR 1000 plus a approx brokerage of INR 3500. The procedure takes a week or two. It is always better to be on safer side.

I spent about 1200 INR for money remittance and the party got money found that USD 35 deducted. So we pay for transfer to New York and they are charged for getting it from New York. There is no direct fund transfer from here to China.

I paid some amount as freight to my supplier in China but again had to pay almost twice that amount as THC to the delivery agent in Mumbai.

So it is like money remittance and the freight is charged at both ends.

Export document mean they have to make the invoice and Packing list. On handing over to the shipper, they will get Bill of Lading which is like Lorry Receipt when we send parcels here. All the three has to be with the importer for presenting to the customs for clearing the goods.

The container number should be invariably mentioned in Bill of Lading. Otherwise it is difficult to locate the right container. The bill of lading we got from China had this crucial information missing &  we had to lot of e-mailing to get the information.

Certificate Of Origin (COO) is one useful important document in Import-Export Trade. This certificate indicates that the goods, which are being exported, are actually manufactured in a specific country mentioned therein. This certificate is sent by the exporter to the importer and in my case the company failed to send the certificate in time that created many headaches.

The clearing &  forwarding agency charges for movement of goods within &   outside the port plus for interacting with the customs. Since the procedure involved for customs clearance of very small consignment and very big are basically same, the charges may appear to be expensive for small consignment.

The following check list gives fair idea about expenses involved in importing a ATV or similar goods from abroad. We have to make sure beforehand, if the goods come under restricted list from the Customs Department.


1. IEC code expenses
2. Cost of Goods
3. Freight
4. Insurance
5. Bank Remittance Charges
6. Freight component at Indian port.
7. Handling expenses at port
8. Clearing &   Forwarding Agency Bill
9. Customs duty


Item number 6 and 9 cannot be precisely known beforehand. It is not possible to get exact estimation of the shipping agency charges as we come across the agency involved only when the goods are in their hands.


Customs department follow same set of rules all over India but the procedure ; interpretation could vary. So it is always better to approach appropriate customs office &   get the clarifications. Many customs offices have independent web sites .


Normally to get a consignment from China you have to wait for sixty days. Mine took longer, eighty days from sending money to delivery in our farm. There was unanticipated delay at factory, port and in the sea.


Importing is not a easy job. You will need plenty of patience &  perseverance to make it happen. Anyway, GOOD LUCK. .