Import Trade Regulations in India

Import trade in India is governed by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry. Here are the key regulations and guidelines regarding import payments and procedures.

Time Limit for Settlement of Import Payments Normal Imports

1. Payment Completion: All remittances against imports must be completed within six months from the date of shipment. Exceptions apply for amounts withheld for guarantees, etc.
2. Delayed Payments: Authorized Dealer (AD) Category – I banks may allow settlement delays due to disputes or financial issues. However, any interest on these delayed payments is applicable only for up to three years from the shipment date.

Deferred Payment Arrangements
1. For Import of capital goods, deferred payment arrangements can last for up to

three years.

2. For Import of non-capital goods, the limit is up to one year or the operating cycle, whichever is less.

Import of Books

1. Remittances for the import of books can be made without any restrictions.

Extension of Time for Payments

1. AD Category – I banks can extend the time for settling import dues for up to six months at a time, with a maximum extension of three years in cases of disputes or financial difficulties.
2. Extensions beyond one year require that the total outstanding amount does not exceed USD one million or 10% of the average import remittances from the previous two financial years, whichever is lower.

Import of Foreign Exchange into India

1. Individuals may send foreign exchange into India without limit (excluding currency notes, bank notes and travellers’ cheques).
2. Individuals may bring any amount of foreign exchange into India (except for unissued notes) as long as you declare it to Customs at the airport using the Currency Declaration Form (CDF). However, if you’re carrying less than USD 10,000 (or its equivalent) in total currency notes, bank notes, or travellers’ cheques, you don’t need to make a declaration. Additionally, if you’re bringing in cash alone, the limit is USD 5,000 (or its equivalent).

Import of Indian Currency and Notes

1. From Other Countries: If you are a resident of India returning from a temporary visit abroad (excluding Nepal and Bhutan), you can bring back up to Rs. 25,000 (twenty-five thousand rupees) in Indian currency notes.

2. From Nepal or Bhutan: When returning from Nepal or Bhutan, you may bring any amount of Indian currency notes, but only in denominations of Rs. 100 or lower.

Evidence of Import For Physical Imports

For all imports into India, regardless of the payment amount, it is mandatory for the Authorized Dealer (AD) Category – I bank to ensure that the importer submits the following documents:

1. Bill of Entry (BoE): The importer must provide the BoE number, port code, and date to mark evidence of import in the Import Data Processing and Monitoring System (IDPMS).
2. Customs Documentation: If the goods are imported by post, the importer must submit a Customs Assessment Certificate or Postal Appraisal Form. For courier imports, a Courier Bill of Entry is required to confirm that the goods have been imported.
3. Storage in Special Zones: For goods stored in a Free Trade Warehousing Zone (FTWZ), Special Economic Zone (SEZ), or other customs bonded warehouses, the importer must provide the Exchange Control Copy of the Ex-Bond Bill of Entry or equivalent documentation. This must include the applicable BoE number, port code, and date for IDPMS marking.

Verification and Document Preservation for Import Processes

1. Verification and Audits: Internal inspectors and Information Systems (IS) auditors— along with any external auditors appointed by the Authorized Dealer (AD) Category – I bank—are responsible for verifying and auditing the Bill of Entry (BOE) Settlement process in the Import Data Processing and Monitoring System (IDPMS).
2. Document Checks: Internal inspectors or auditors, including external auditors, must verify all documents that prove imports, which are not available in IDPMS. This includes Exchange Control copies of Postal Appraisal Forms, Customs Assessment Certificates, and other relevant documents.
3. Document Retention: The AD Category – I bank must preserve all import evidence documents for one year from the date of verification. In cases under investigation by law enforcement agencies, these documents may only be destroyed after obtaining clearance from the relevant investigating agency.