Import Duty in India: Types, Rates & Calculation
TL;DR - Summary
- What is import duty? - - Import duty is a government tax charged by Indian Customs on goods entering India from foreign countries.
- What are the main types of import duty? - - India applies Basic Customs Duty, IGST, Social Welfare Surcharge, Anti-Dumping Duty, and Countervailing Duty on imports.
- Are there exemptions on import duty? - - Certain life-saving medicines, medical devices, critical minerals, and selected industrial chemicals receive partial or full exemptions.
- How is import duty calculated? - - Import duty is calculated using product value, insurance charges, freight cost, and applicable customs taxes together.
- Where to check import duty rates? - - Importers can use ICEGATE and official customs portals to estimate import duties and applicable taxes accurately.
What Is Import Duty?
Import duty is the tax Indian Customs charges on all goods entering India from foreign countries. It is governed by the Customs Act, 1962 and administered by the Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance.
In most cases, import duty is applied to all goods unless they qualify for a specific exemption, and is calculated on the product's CIF value, which stands for Cost, Insurance, and Freight.
For example, if a product costs Rs. 1,000 with Rs. 100 in transportation (Freight) and Rs. 50 in insurance, the assessable value becomes Rs. 1,150, and import duty is charged on this total amount.
💡 KEY UPDATE
On 1 April 2026, CBIC announced that the Basic Custom Duty on more than 40 chemicals and plastic raw materials would be lowered to zero until June 30, 2026. It is expected to reduce import costs for businesses in the manufacturing and petrochemical sectors.
What Are the Types of Import Duties in India?
There are different types of import duties, such as BCD, IGST, Social Welfare Surcharge (SWS), Anti-Dumping Duty, Safeguard Duty, and Countervailing Duty. The purpose and applicability of each duty are explained below:
- Basic Customs Duty (BCD): BCD is the primary import duty levied on all imported products unless specifically exempted by the government. BCD rates vary depending on the product classification under the Customs Tariff Act, 1975. The rate may be reduced or waived in certain cases through government notifications.
- Integrated Goods and Services Tax (IGST): IGST is a tax on imported goods and services under India’s GST system. It ensures imports are taxed at the same rate as similar products made in India. IGST applies to most imports unless the government grants an exemption. GST-registered importers can generally claim the tax paid as Input Tax Credit (ITC).
- Social Welfare Surcharge: SWS is a customs duty levied to support social welfare initiatives like education or healthcare. It applies to all imports that pay BCD and are levied at 10% of BCD.
- Anti-Dumping Duty: This duty is levied on the import of products that are sold below fair market value. This conditional duty is charged only after confirming dumping to make sure all products are sold at a fair price.
- Safeguard Duty: A special duty imposed on imported products when there is a sudden and significant increase in imports that could harm domestic industries. Its purpose is to protect local manufacturers from unfair competition during such import surges.
- Countervailing Duty (CVD): A special duty that may be imposed on imported goods when the exporting country's government provides subsidies to its manufacturers. The duty helps create a level playing field for domestic producers.
Let’s summarise as follows:
| Duty Type | Applicable Rate Range | Who Pays | When It Applies |
|---|---|---|---|
| Basic Customs Duty (BCD) | Varies depending on the product classification under the Customs Tariff Act, 1975. | Importer | Applies at the time of customs clearance unless specifically exempted. |
| Integrated Goods and Services Tax (IGST) | Same rate as GST on similar domestic goods. | Importer (businesses can claim ITC) | Charged on all goods and services imported as part of the GST regime. |
| Social Welfare Surcharge | 10% of Basic Customs Duty (BCD) | Importer | Applies when BCD is levied on imported goods. |
| Anti-Dumping Duty | Depends on how much cheaper the imported products are compared to their normal value. | Importer | Applies when goods are imported at an unfairly low price, causing injury to the domestic market. |
| Safeguard Duty | The rate is set at the level needed to stop import-related injury to the domestic industry after investigation. | Importer | Applied temporarily when a sudden import surge threatens domestic industry. |
| Countervailing Duty | Usually equal to the estimated subsidy benefit of the exporting country. | Importer | Imposed when imported goods are found to benefit from subsidies in the exporting country |
Note: Anti-Dumping and Safeguard duties apply only to some products and specific countries. These are temporary duties that happen only when certain conditions are met.
What Determines Import Duty Rates in India?
Import duty rate in India is determined based on factors such as government notifications issued by the CBIC, applicable trade agreements, the importing country’s origin, and product classification under the Customs Tariff system.
- HSN Classification: HSN (Harmonised System of Nomenclature) classifies goods into internationally recognised product categories, each assigned a specific code. Import duty is determined based on this HSN code, as different codes attract different tariff rates. Incorrect classification can lead to penalties, reassessment of duty, and delays in customs clearance.
- Country of Origin: The duty rate may vary depending on the country from which the goods are imported. India has Free Trade Agreements (FTAs) with countries such as Japan, South Korea, and ASEAN nations, where reduced or zero duty rates may apply for eligible goods.
- Assessable Value (CIF Value): Import duty is determined on the assessable value, not just the product price. Therefore, the duty rate varies based on the type of goods purchased, including insurance charges and shipping expenses applied as applicable herein.
- CBIC Notification: The government regularly updates import duty rates through CBIC notifications and Union Budget announcements. These updates may change rates, introduce exemptions, or revise existing duty structures.
- De Minimis Threshold: Imports with value less than ₹5,000 are exempted from import duty. This threshold does not apply to commercial shipments and is only applicable to gift or personal shipments. Compared to countries like the United States, where the de minimis threshold is $800, India’s limit is relatively low.
💡 QUICK INSIGHT
MFN (Most Favoured Nation) rate is the standard import duty rate applied by a country to imports from all World Trade Organisation (WTO) countries. India’s average MFN tariff rate stands at 15.8%, significantly higher than that of global peers such as the EU at 5.1% and the USA at 3.4%.
How to Calculate Import Duty?
Import duty is calculated by applying the applicable duties, such as BCD, IGST, and other duty rates, to the CIF value of imported goods. Assume you are importing a personal computer from China with the HSN code 84713010 and a CIF value of $500.
You can calculate the import duty by following the manual calculation steps provided below:
- Step 1: The applicable duty rates for the computer are: BCD at 0%, SWS at 10% on BCD, and IGST at 18%. You can also look up HSN codes from the official GST website and check out the duty rate from CBIC.
- Step 2: The next step is to convert the CIF value into Indian Rupees (INR). Assuming an exchange rate of $1 = ₹83, the total CIF value becomes ₹41,500. For import duty calculations, the applicable exchange rate is not the current market rate but the official rate notified by customs based on the Reserve Bank of India (RBI) reference rate on the date the Bill of Entry is filed.
- Step 3: Next, calculate the BCD. Since the BCD rate is 0%, the duty amount is ₹0. The SWS is then calculated as 10% of ₹0 (BCD), which in this case also amounts to ₹0. After this, IGST is applied to the cumulative value (CIF+BCD+SWS). Since both BCD and SWS are zero, IGST is calculated on ₹41,500. At 18%, the IGST amounts to ₹7,470.
- Step 4: Finally, to determine the total landed cost, all applicable duties are added to the CIF value. In this case, the total cost comes to ₹48,970.
How to Pay Import Duty Online via ICEGATE?
Import duty can be paid online through the ICEGATE portal by logging in and making an e-payment against the Bill of Entry.
Step 1: Go to the ICEGATE website and click on services, then e-payment and select the top-up payment option.
ICEAGATE LoginStep 2: Now, enter your credentials and log in to the website.
ICEAGATE credentials pageStep 3: This will take you to your dashboard. From there, select Services, then e-Payment, and finally click on Duty Payment to proceed with the payment process.
ICEAGATE ServicesStep 4: Enter the required details, including the document type and any other requested information, then review the entries and click “Proceed” to continue.
ICEAGATE DocumentsStep 5: This will take you to the Unpaid Challan page, where you can select the challan you want to pay and proceed with the payment.
ICEAGATE ChallansStep 6: You can choose to pay through net banking, NEFT/RTGS, or ECL Wallet, as per your convenience.
ICEAGATE payment options- Net Banking: If you choose net banking, banks eligible to make this payment will be shown. You can choose your bank, then go to retail banking and enter your bank details. Preview the details and make the payment.
ICEAGATE banks- NEFT/RTGS: For this option, you can either choose NEFT or RTGS and click on the mandate form. Then save or print the form, after which you can make the payment at your bank.
ICEAGATE Print- ECL Wallet: If you choose Electronic Cash Ledger (ECL), you will be sent an OTP to your registered contact details. You can enter the OTP and submit. After verification, a transaction ID confirming your payment will be generated.
ICEAGATE OTPStep 7: Once payment is completed, you will promptly receive a receipt. Imported goods will be released after the duty clearance process is done. However, if payment is delayed, a 15% yearly penalty rate will apply to the outstanding balance due.
Note: As of March 2026, under CBIC Circular No. 13/2026 (dated 24 March 2026), ICEGATE now lets you pay customs duty via UPI, debit card, and credit card through its new Payment Aggregator mode, in addition to net banking and NEFT/RTGS.
Which Import Duty Exemptions Apply Today?
Exemptions from import duty in India have strict compliance requirements. All needed documents and criteria must be met to avail this exemption. In case of failure to provide valid documentation, full duty is charged, and clearance may be delayed.
- Goods Under FTA: Import duty in India depends on the trade agreements India has with other countries. It becomes zero or is reduced, depending on the trade relations of India and the country you import from. You need a Certificate of Origin (CoO) to claim this benefit.
- Advance Authorisations and DFIA (Duty Free Import Schemes): Both schemes enable importers to import inputs for export at zero duty. There must be a valid licence, proper documentation, proof that all imported inputs are used for exports, and that the export obligation is met.
- EPCG (Export Promotion Capital Goods) Scheme: Under this scheme, capital goods can be imported at zero import duty. Importers need a proper licence, and capital goods must be used to produce export goods and should not be sold domestically.
- Nil-Duty Notification: CBIC has announced a nil-duty notification for 40+ chemicals and plastics. This zero-duty exemption will be valid until 30 June 2026
- 2025-2026 Budget: The Union Budget of 2025-2026 introduces relief from duty for sectors such as critical minerals, EV components, and medical equipment.
Import Duty vs Tariff vs Import Tax: What's the Difference?
The terms import duty, tariff, and import tax are often used interchangeably because they all refer to charges imposed on imported goods. However, there are subtle differences between them. Let's define each term to better understand what they mean and how they are used.
Tariff
A tariff is the schedule of rates prescribed by the government under the Customs Tariff Act, 1975. It specifies the rate of duty applicable to each category of goods according to its classification. A tariff therefore establishes the rate but does not itself represent the sum payable. A reference to a 20% tariff on a product denotes the rate set out in this schedule.
Import Duty
Import duty is the amount payable to customs when goods enter India. It represents the tariff rate as applied to a specific consignment and collected at the point of import. Where the applicable tariff is 20% and the goods are valued at ₹1,00,000, the import duty payable is ₹20,000.
Import Tax
Import tax is a collective term encompassing all charges levied on imported goods. In addition to basic customs duty, this includes the Integrated Goods and Services Tax (IGST), the Social Welfare Surcharge, and any applicable cess. It does not denote a single levy with a fixed rate, but rather the aggregate of charges imposed on an import.
In summary
The three terms describe the same framework at different stages: the tariff is the prescribed rate, the import duty is the amount levied on a given consignment, and import tax is the collective term for the full range of charges applied to imported goods.
How Can Skydo Help?
Many businesses that import inputs, raw materials, or components also export their finished products. If your business does both, the exchange rate costs you manage on the import side apply in reverse when your overseas clients pay you. Traditional banks often apply high exchange rate markups on these incoming payments, increasing overall transaction costs. Skydo can help address this through the following features:
- Real-Time FX Rate: Skydo offers mid-market exchange rates, with no hidden charges, making cross-border payments more cost-efficient.
- Fast Payout: It enables fast international payout to more than 30 countries, with all compliance handled.
- Transparency: All fees on international payments are shown transparently so that customers can have control of their payments.
Through Skydo, businesses that export as well as import can reduce currency losses, improve transparency, and gain greater control over their international payments.
What is India's basic customs duty rate for most goods?
Basic customs duty for many goods in India falls under the slabs of 5%, 15%, 25%, and 35%. Currently, the peak customs duty rate is applied at 35%. These are generalised figures, and each product have their own set rate.
How do I find the correct HSN code for my imported product?
Can I pay customs duty online instead of at the port?
Are there any products exempt from import duty in 2026?
Does the exchange rate on the date of duty payment affect how much I owe?
