Everything You Need to Know About Import Duty on Home Decor Items From India in 2022
Indian Handicrafts Market
India has achieved a very important position in the field of international business with its handicraft products. A large number of countries are importing handicrafts products to serve the purpose of home decorations. The handcrafted decoration items are appreciated by overseas customers for their precise design and workmanship. Export of such products is of great significance for the country as it helps in generating a substantial amount of revenue from foreign countries along with getting recognition for India’s rich culture and heritage. The Indian handicraft industry is a small-scale cottage industry and has evolved significantly over years in terms of increasing its global reach. By reaching a wider range of customers and getting import orders for home décor items from international customers, the popularity of Indian handicraft products will increase further and generate more revenue and employment opportunity
Handcrafted Home Decors
There are different types of handicrafts products based on the user requirements and functionality. The two major categories of Indian handicraft items are Consumer products and Home décor products. Consumer products mainly refer to utensils, cutlery, textiles, body care products, and other consumer goods that are used regularly. The home décor products include purely decorative items and showpieces. The decoration products are a type of specialized item prepared by artisans and involve highly technical craftsmanship. As a result, such decorative pieces become more exquisite and expensive, making them a popular choice among importing countries. A huge segment of non-resident Indians living in different countries mostly prefer such Indian handicrafts for their home or commercial places. They also encourage others to have possession of such goods as a sign of India’s rich culture and tradition. The Indian handicrafts industry is fairly large, and it deals with different types of products. It has been observed that handicraft items meant for decoration purposes have a very high demand structure among international customers. So it can be said that these are some of the best categories of handicraft products that have been demanded in other countries and have the potential to earn handsome revenue in foreign exchange. Products made through bamboo weaving and cane craft especially in the northeastern part of India have wonderful design and portability. The coir products from Kerala are famous and exported worldwide. The blue pottery of Rajasthan, which had its origin in Delhi, has improved a lot through innovations. The potteries are made with powdered stone and glass, Multani mitti, borax, etc., and colored with fascinating blue dyes. These are exclusive showpieces that can be used on special occasions. Beautiful decorative items made by seashells represent unique craftsmanship. The shells are handpicked from shore and then craft into fascinating designs to make decorative boxes, photo frames, mirrors, jewelry, and door hangers. If we talk about traditional paintings, Madhubani painting is an incredible form of art that uses natural colors obtained from spices, indigo, flower extracts, and many other raw items. It depicts Indian culture and traditions exclusively.
Demand for Home Decor Items
The Indian handicraft products are acknowledged worldwide for their creative design, variety, and craftsmanship. Home decoration items have become more popular because it creates an ambiance in the home that reflects culture and style. The home décor products are the result of dedicated efforts and traditionally owned skills that make them so exclusive and unique. Many Indians living abroad feel proud to possess such items from India and also want to highlight the tradition and culture of India by showcasing these products. The natural and organic raw materials also make them a preferred choice considering the health and hygiene aspects. A large segment of handicrafts products belongs to the category that is considered for decoration purposes. These are exclusive items in terms of the raw material used, creative designs, and workmanship. The home décor items are generally manufactured in various local segments of the country involving people from rural and semi-rural areas. Each type of item is unique in its own way as it reflects the local culture, art form, and workmanship. It is now quite obvious that handicrafts products have a huge demand in the global market so manufacturers need to adopt the best strategies to promote the products that facilitate import orders.
Import Duty on Products
Import duty is a type of tax collected by the respective country’s customs authorities while importing goods from other countries. The import duty is determined by the value of goods. Depending on the context, import duty may also be named as customs duty, import tax, or import tariff. Import duty depends on how the goods are classified so the importer will need to provide a detailed description of the product to allocate them to the correct tariff slab. Different countries can have different rates of import duty for the same product. Import duty may vary depending on the trade relations status between two countries. The import duty for different countries varies from 20% to 30%. So the same item may be taxed differently in different countries. Several countries have tried to reduce import duties to promote trade. The price of a product is determined based on the import duty levied on that product and it affects the final selling price of the product in that country. In other words, the customers have to bear it while purchasing the product. With less import duty, the products will have a more affordable price. Some countries apply high import duty on certain products to make them less affordable in order to promote local products. Again, some products which have high demand and ready markets in the country are often relaxed from high import duties. This enables companies to import on large scale and cater to the market demand to make a profit. Whenever any goods are imported to a country, an HS code needs to be created that decides how much the percentage of duty to be applied on the cost of goods. Thus, you can calculate the correct import duty and VAT. Import Value-Added Tax (VAT) is a consumption tax that is applied to goods entering the country. VAT is designed to distribute the tax burden across the supply chain, but ultimately must be borne by the consumer.
To encourage handicraft product export, the government has set up certain schemes and regulations that help small-scale manufacturers to execute the import orders without much hassle. It is now possible to connect with buyers worldwide and export Indian handicrafts overseas to a global customer base. The Ministry of Commerce and Industry, Government of India provides incentives to the handicraft industry in promoting export. It takes care of the handicraft industry by establishing special export processing zones in different parts of the country to export these handicraft items. There are options available like export carnivals, trade fairs, and other virtual and online platforms which allow the manufacturers to promote their products to a global audience which can bring more import orders.
Online Trade Platforms
There are various online trade platforms that will help in listing all your handmade products in an easy yet attractive way for visibility to international customers. An e-commerce and trade platform like Craftezy helps to get import orders and start selling handicraft products in overseas countries right away without the involvement of any major expenses. It is a new form of user-friendly digital channel for sales, which gives all the necessary support to showcase your handicraft products, manage listings, control the order process and get payment through simple and convenient methods. Craftezy aims to provide necessary support in product marketing, product listing, and providing information about product details to customers to decide on import orders and duties involved. The platform takes care of logistics and delivery of products to respective countries.
Encouraging Import by Other Countries
It is very important that Indian home décor products make their own identity in the world market by highlighting the special features and premium quality. To develop the handicrafts industry through export and revenue generation, foreign countries have to be encouraged to place more import orders for such products from India. One way is to follow extensive promotion and marketing strategies. But from the business point of view, countries become more inclined to import products if the cost involved is less and profit is more. The Indian government has developed trade relations and made tie-ups with many foreign countries which leads to the reduction of import duties for Indian handcrafted home décor items in those countries and thus facilitating the export business from India. Moreover, handicraft products are mostly made up of natural sources with no artificial or harmful additives which makes them the most preferred product in overseas countries. The countries importing Indian hand décor products are aware of its premium and exclusive qualities and set import duties accordingly to provide their respective markets with the choicest products at affordable prices.