Import Duty in India: Complete Guide for Beginners

Import duty plays a key role in regulating trade and generating revenue for India. Every time goods are brought into the country, customs authorities levy taxes to protect domestic industries and ensure fair trade practices.

In this guide, you will learn:

• What import duty is and how it differs from other import taxes.
• Types of import duty in India and how each affects pricing.
• Recent changes in 2025, including sector-specific updates.
• How to calculate import duty using official tools.
• Global implications, including U.S. tariffs on Indian exports.
• Practical solutions, like how WareIQ simplifies cross-border fulfillment and customs compliance.

By the end, you will have a clear understanding of import duty in India, know how to calculate it, and learn strategies to manage import costs efficiently.

What Is Import Duty?

Import duty is a tax levied by Indian customs authorities on goods imported into the country. Its main purpose is to generate government revenue, regulate foreign trade, and protect local industries from excessive competition.

Many people use the terms import duty and import tax in India interchangeably, but there’s a slight difference between the two. 

Import duty refers specifically to the customs charge on imported goods. In contrast, import tax can include additional levies such as the Integrated Goods and Services Tax (IGST) or Social Welfare Surcharge, depending on the product category.

These charges directly impact the final price of goods in the Indian market. For example, if a company imports electronic gadgets from another country, customs authorities calculate the import duty based on the product’s value, insurance, and freight costs before allowing clearance.

Types of Import Duty in India

Import duties in India serve two key purposes: regulating international trade and protecting domestic industries. Different types of customs import duties apply based on the product, value, and purpose of import.

Basic Customs Duty (BCD)

This is the primary import duty in India levied under the Customs Tariff Act, 1975. It is charged on the assessable value of imported goods and varies across product categories. The central government may exempt certain goods when required.

Countervailing Duty (CVD)

CVD is imposed to offset subsidies that exporting countries provide to their producers. It ensures a level playing field for Indian manufacturers by neutralizing the unfair price advantage enjoyed by foreign suppliers.

Anti-Dumping Duty

When imported goods are sold below their fair market value, an anti-dumping duty is applied. It prevents dumping practices that could harm local industries and helps maintain fair trade competition.

Safeguard Duty

This duty protects domestic industries from sudden surges in imports. It is imposed temporarily when rising imports threaten the financial stability of local manufacturers.

Social Welfare Surcharge

Calculated at 10% of the aggregate customs duties, this surcharge contributes to social welfare schemes. It applies to almost all imported goods.

Integrated Goods and Services Tax (IGST) on Imports

In addition to customs duty, imports also attract IGST, similar to domestic GST. The rate depends on the product type and adds to the total import duty charges in India, influencing final pricing for businesses and consumers.

Customs Duty Changes in 2025

The Finance Bill 2025, introduced on 1st February 2025, brought several updates to customs import duty in India. These changes aim to simplify tariffs, encourage exports, and reduce costs for certain imports. Most changes took effect on 2nd February 2025, while some took effect on 1st May 2025.

Some Key BCD Changes in 2025

Source: India budget, 2025

Legislative Changes in Customs Act, 1962 (2025)

1. Provisional Assessment: Section 18

• A new sub-section (1B) sets a 2-year time limit for finalizing provisional assessments.
• The Commissioner of Customs can extend it by 1 year if sufficient cause is shown.
• For pending cases, the time limit starts from the date of assent to the Finance Bill.

2. Suspension of Time-Limit: Section 18(1C)

• Certain conditions now allow suspending the 2-year limit on finalizing provisional assessments.

3. Voluntary Revision of Entries: Section 18A

• Importers and exporters can revise entries post-clearance within a prescribed period.
• Revised entries can be treated as self-assessment or as a refund claim under Section 27.

4. Refund Clarification: Section 27

• Refund claims from revised entries now have a 1-year limitation from the date of the duty or interest payment.

5. Relevant Date for Duty: Section 28

• For revised entries under Section 18A, the date of payment is considered the relevant date for duty calculations.

6. Interim Board Provisions: Sections 127A, 127B, 127C, 127D, 127F, 127G, 127H

• Defines Interim Board, its members, and pending applications.
• Grants the Interim Board the powers and functions of the Settlement Commission.
• Clarifies application deadlines and applicability of various sub-sections to the Interim Board.

Global Context: Donald Trump Imposes 27% Import Duty on India

In 2025, the U.S. government imposed a 27% import duty on certain Indian exports. This tariff is India-specific and affects a wide range of products, including auto components, electronics, and other manufactured goods, while pharmaceuticals, copper, energy products, and semiconductors remain exempt.

More on this here: Donald Trump Imposes 27% Import Duty On India; Textile, Rice Exports Won’t Be Hit, Say Experts

Sector-wise Impact

Key Insights

• Relative advantage matters: India may benefit in sectors where competitors face higher tariffs.
• Textiles and rice exports are expected to remain strong.
• Electronics and auto components may struggle due to competition from Mexico and China.
• Investor uncertainty: Fluctuating tariffs create caution in global supply chains.
• Market adjustment: Experts estimate 3–6 months for stabilization.

How to Calculate Import Duty in India

Calculating import duty in India is straightforward if you follow the right steps. The total duty is primarily based on the CIF value: that is, Cost + Insurance + Freight + applicable duty rates.

Step-by-Step Process

Step 1: Determine CIF Value

Sum the cost of goods, shipping charges, and insurance.

Example: Electronic gadget price = ₹50,000, shipping = ₹2,000, insurance = ₹500 → CIF = ₹52,500.

Step 2: Identify Applicable Duties

Check the Basic Customs Duty (BCD), Social Welfare Surcharge, and Integrated Goods and Services Tax (IGST) for your product.

Step 3: Calculate Duty Amount

Multiply the CIF value by the respective duty rate.

Example Calculation:

• Product: Electronic gadget
• CIF Value: ₹52,500
• Basic Customs Duty (BCD): 20% → ₹52,500 × 20% = ₹10,500
• Social Welfare Surcharge (10% on BCD): ₹10,500 × 10% = ₹1,050
• IGST (18% on CIF + BCD + SWS): (₹52,500 + ₹10,500 + ₹1,050) × 18% ≈ ₹11,664
• Total Import Duty: ₹10,500 + ₹1,050 + ₹11,664 ≈ ₹23,214

Step 4: Use Online Tools

• Indian Customs Import Duty Calculator and Import Duty Calculator India can simplify calculations.
• Enter product details: CTH / HS Code: Minimum 4 digits, maximum 8 digits.
• Description: Optional, up to 30 characters. You can use either CTH only, Description only, or both together.
• Country of Origin: Optional, but needed for preferential duty, anti-dumping duty, or other special notifications.
• Once you submit, the tool displays:

• Customs Duty Type (e.g., Basic Customs Duty, IGST, Social Welfare Surcharge)
• Rate of Duty (Tariff %)
• Special Duty (if applicable)
• Unit of measure (e.g., PCS, KG, Liter)
• Notification / Sl. No. for legal reference
• Effective Rate of Duty (updated as per latest notifications)
• Duty Amount based on your CIF value

How WareIQ Simplifies Cross-Border Fulfillment & Customs

Managing imports and customs can be complex, but WareIQ simplifies the process for eCommerce brands and importers. As a Y-Combinator-backed full-stack platform, WareIQ provides multi-channel fulfillment across D2C, marketplaces, quick commerce, and B2B channels.

Key Benefits for Importers

• Pan-India Network: WareIQ operates across 12+ cities, with seller-flex and FAssured-compliant warehouses. Last-mile delivery covers 27,000+ pin codes.
• Multi-Channel Integrations: Plug-and-play integrations with marketplaces like Amazon, Flipkart, Myntra, Nyka, and D2C platforms like Shopify, Magento, and WooCommerce. Supports distributors, flagship stores, and analytics-driven operations.
• Inventory LogIQ: AI-driven inventory planning minimizes stockouts and automates replenishment for imported goods.
• Tech-Enabled Returns QC: Capture and centrally store high-quality media of returned or damaged products to avoid marketplace claim rejections.
• Seller Enablement: Dedicated account managers handle APOB/PPOB registration, GST registration, NDR & COD verification, and other compliance support.

FAQs on Import Duty in India

Supercharge your fulfilment with WareIQ now, contact our team.