Importing From Japan to India: CEPA, Duties and the Documents You Need

Before you place the order: the India side

• Importer Exporter Code (IEC). Issued by the DGFT and needed to clear imports into India. Most established companies already have one; if you’re importing for the first time, get it before the first shipment rather than after.
• The HS code for each item. The classification decides your basic customs duty, IGST, any surcharge, and whether a preferential rate under the India–Japan agreement is available. Agree it with your customs broker early — a different classification at the port changes your landed cost.
• BIS and other product requirements. A growing list of products is covered by Quality Control Orders that require BIS certification before import, including many steel, chemical, electrical and machinery items. Check your HS code against the current list before the supplier starts production, because certification can take months and the Japanese supplier usually has to take part in it.

Claiming the India–Japan CEPA rate

India and Japan have had a Comprehensive Economic Partnership Agreement (CEPA) in force since 2011, and many industrial goods qualify for a reduced or zero basic customs duty under it. The reduction is not automatic. To claim it you generally need:

• A certificate of origin under the CEPA, issued in Japan for the specific shipment. In Japan these are issued by the Japan Chamber of Commerce and Industry on the exporter’s application, so the supplier (or their trading company) has to request it — ask for it in the RFQ, not after shipment.
• Goods that actually meet the rules of origin. A product assembled in Japan from mostly imported parts may not qualify. The supplier has to confirm this, and it is a fair question to ask in writing before you rely on the lower rate in your costing.
• Origin information on your side. Indian customs rules (CAROTAR) put the responsibility on the importer to hold enough information to support the origin claim. Keep the supplier’s origin confirmation with your import records.

Duty rates and the rules change. Treat this as a checklist of what to ask, and confirm the current rate for your HS code with your broker before you finalize a price.

What to ask the Japanese supplier for

• A quote on a stated Incoterm — FOB at a named Japanese port is usually the easiest to compare (see Incoterms and export documents)
• Commercial invoice and packing list, with descriptions that match your HS classification
• The CEPA certificate of origin, if you intend to claim the preferential rate
• Any test reports, material certificates or BIS-related documents your product needs
• Confirmation of whether the goods are subject to Japanese export control — some machine tools, electronics and materials need an export license from Japan, which the supplier applies for

Payment terms to expect

Japanese manufacturers are cautious with new overseas customers. For a first order, expect a request for advance payment by telegraphic transfer, or a letter of credit for larger amounts. Open-account terms usually come only after a track record of orders. Some suppliers prefer to sell through a Japanese trading company that handles export and payment for them; that is not a bad sign, but it adds a margin and a party to the paperwork.

Landed cost, not unit price

Before comparing a Japanese quote with a domestic or other Asian one, add freight, insurance, basic customs duty (or the CEPA rate), surcharges, IGST, port and handling charges, broker fees and inland transport. IGST is generally creditable for a GST-registered buyer, but it still affects cash flow. A Japanese part often looks expensive on the quote and much closer once landed cost and reject rates are counted — see what to source from Japan for the categories where that tends to hold.