A factory quote of $2.10 a unit tells you almost nothing about what that product actually costs you in India. This is the full sum, worked through with real numbers.
Ask a first-time importer what a product costs, and you'll usually get the FOB (factory-gate) unit price from the supplier's quote. That number is real, but it's also the smallest piece of what you'll actually pay. By the time a shipment clears Indian customs, freight, duty, IGST, and clearance costs can easily add 25–60% on top of factory price, depending on category and shipping mode — and the ratio is different for every product, which is exactly why importers who don't model it properly get margin surprises after the order is already placed, not before.
| Component | Basis | Notes |
|---|---|---|
| Product cost (FOB) | Unit price × quantity | The number on the supplier's quote. |
| Freight & insurance | Per shipment, allocated per unit | Varies by sea/air, LCL/FCL, and route — see our freight comparison. |
| Basic Customs Duty (BCD) | % of (product cost + freight + insurance) = CIF value | Rate is entirely HS-code dependent. |
| IGST | % of (CIF value + BCD) | Charged on value including duty — see the trap below. |
| Clearance & handling | Flat/per-shipment fees | CHA fees, port handling, any inspection costs. |
The Harmonized System (HS) code you declare determines your Basic Customs Duty rate, whether any anti-dumping or safeguard duty applies, and which certifications (BIS, WPC, and so on) get triggered. For many products the correct code is unambiguous; for a meaningful minority, a product could reasonably sit under two or three different headings depending on material, function, or intended use — and the duty difference between them can be substantial. Misclassification, even done in good faith, creates real exposure: goods held for reassessment, penalty risk, or a shipment cleared under a code that doesn't survive a physical inspection. Get classification reviewed against your actual product spec before you finalise pricing with a supplier, not after.
Take a hypothetical consumer electronics accessory, FOB price $3.00/unit, order of 2,000 units, shipped by sea LCL:
| Line item | Calculation | Amount (illustrative) |
|---|---|---|
| Product cost | $3.00 × 2,000 | $6,000 |
| Freight + insurance | Flat estimate for LCL | $650 |
| CIF value | Product + freight + insurance | $6,650 |
| Basic Customs Duty | Illustrative rate applied to CIF | Category-dependent |
| IGST | Applied to (CIF + BCD) | Category-dependent |
| Clearance & handling | CHA + port fees | Flat, per shipment |
We've left the duty and IGST amounts as "category-dependent" deliberately — publishing a specific percentage here would be more likely to mislead than help, since it changes by HS code and is revised periodically by Indian customs authorities. This is exactly the calculation we run for clients against their actual product and current rates as part of the Logistics & Customs service, rather than something we'd want you relying on a blog post for.
IGST is charged on the CIF value plus Basic Customs Duty — not on product cost alone, and not on CIF value alone. Importers who calculate IGST only against their product cost consistently under-budget, sometimes significantly, because they've skipped the compounding step. Always calculate BCD first, add it to CIF value, then apply IGST to that combined figure.
No — Basic Customs Duty varies significantly by HS code and can range from single digits to well over 20% depending on category, with some categories carrying additional anti-dumping or safeguard duties on top. There is no single "import duty rate"; it's product-specific.
Yes — IGST is charged at the point of import regardless of your GST registration, but registered businesses can typically claim it back as input tax credit, which is why registration matters even if you're not immediately reselling with GST charged.
They shouldn't, if classified correctly — but in practice, yes, because HS classification has genuine grey areas and different importers (or their CHAs) sometimes classify similar goods differently. This is exactly why classification review matters before you commit to pricing.
It changes which line items are already included in the quoted price versus billed separately — under FOB you add freight and insurance yourself; under CIF the supplier has already included them (often at a markup you can't audit). Either way, the total landed cost should come out comparable if you're doing the math correctly.
Send us your product and target quantity — we'll model HS classification, duty, IGST, and freight against current rates before you commit to a supplier.
