Framework Conditions and Barriers

Trade Barriers

Trade in India is often conditioned by inadequate infrastructure, bureaucratic delays, high tariff and technical barriers to trade. Moreover, cultural differences are often perceived as a challenge by foreign operators - although English is one of the official languages in India, local assistance is recommended for negotiation situations. It is important to keep in mind that the trade conditions may vary significantly between states. Likewise, the barriers for FDI (foreign direct investment) depend on the sector. For specific information on FDI policy, please read more on The Department of Industrial Policy & Promotion.

Tariffs and duties

Tariff barriers constitute a significant trade barrier and high import duties have been used as means for anti-dumping at several occasions in previous years. Import duties, which were previously prohibitively high at levels of 180% or more, have been rationalized to conform to international levels. However, duties are still at the high-end compared to other countries.

Tariffs in India vary from sector to sector and between product groups. Please find sector specific information on EU’s Market Access Database, which also includes information on non-tariff barriers to trade. Moreover, The Trade Council can help finding the current custom duty for specific industries and products.

Special Economic Zones (SEZ). 

Companies operating within a range of sectors can benefit from India’s arrangement with Special Economic Zones (SEZ). The purpose of SEZ is to boost Indian exports by establishing favorable framework conditions for business activities and thus attract foreign investments. SEZ units enjoy comprehensive benefits including tax relief and the possibility of evade duties on goods bought for development, operation and maintenance of SEZ units. These SEZs have given the level of foreign investment a substantial boost, but are considered less efficient compared to China and other countries. Read more on Special Economic Zones India.

Logistics

India has a number of Inland Container Depots (ICDs) which handle exported as well as imported shipments. Please find more information on these depots as well as on shipment and transport between the federal states on India’s Department of Commerce.

Technical Barriers to Trade

The liberalization of the Indian economy since the 1990s has had a very palpable impact on India’s trade policy vis-à-vis foreign trade. Import regulations have been progressively eased - both in terms of quantitative restrictions and import duties and almost all items are now allowed to be imported into India. However, some import restrictions still remain for certain sectors.

There are import prohibitions and restrictions on some goods for sanitary reasons and for other goods testing and certification is required.  Bureau for Indian Standards (BIS) demands that certain products fulfil the Indian BIS-quality standards which have gradually come closer to ISO-standards.  In particular import of foodstuff is subject to various restrictions and import conditions generally are ambiguous intransparent. It is therefore recommended to read more on Bureau for Indian Standards and/or to contact The Trade Council for specific information.

Imported goods are subject to various labelling requirements including the maximum retail price before they leave their place of origin. A limited number of products are still not allowed to be imported, or they have to be imported through an official authority or on the foundation of specific licenses. Please contact The Trade Council for specific information.

Intellectual Property Rights

India’s Trademark Act from 1999 is in compliance with international norms and standards, including the Paris Convention for Protection of Industrial Property. Please read more on The Indian Controller General of Patents Design and Trademarks (CGTDTM).

In 2005, India changed its legislation to comply with the WTO agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). However, the reinforcement of the legislations remains weak. With regard to joint ventures, Danish companies should hand in a patent application before the Indian partner can make use of the patent in order to maintain its right to the patent. Please read more on the TRIPS patent system on the WTO’s webpage.

In collaboration with the Danish Patent and Trademark Office, The Trade Council of Denmark-India has prepared an article about IPR in India. Click here to read it.

Intellectual Property (IP) is administered by a few central ministries who formulate the business rules, which differs from sector to sector. A number of other ministries and departments are also involved with regard to enforcement or commercialization of IP. For more information on obtaining patents in India, see The Indian Controller General of Patents Design and Trademarks.