Dropshipping Business in India: Sourcing From China in 2026
Quick answer: There are two ways to sell Chinese-made products in India. You can ship individual parcels from China to Indian buyers, which customs treats as personal imports, now charged 10% basic duty plus surcharge and IGST, with no duty-free allowance on courier parcels. Or, as an Indian business, you can import in bulk under your own Importer-Exporter Code (IEC), pay duty once per shipment, claim back the IGST if you are GST-registered, and fulfil orders from stock inside India. For most sellers who want to run a real store on Amazon.in, Flipkart or their own site, the bulk route is the one that works, provided the goods carry Indian labels and any required BIS certification before they land.
Route 1: parcels from China straight to Indian buyers
This is classic cross-border dropshipping: your store takes the order, and the parcel flies from a warehouse in China to the customer's door. Indian customs classifies goods imported for personal use under tariff heading 9804. In the Union Budget presented on February 1, 2026, the duty on dutiable personal imports was cut from 20% to 10%, effective April 1, 2026, and the Social Welfare Surcharge (SWS) now applies to everything under that heading.
What that looks like on a typical parcel, assuming an item with 18% GST:
- Basic customs duty: 10% of the assessable value
- SWS: 10% of the duty, so 1%
- IGST: 18% of value plus duty plus SWS, so about 19.98%
- Total: roughly 31% of the item's assessable value (price plus shipping)
Items in a different GST slab pay more or less, and gifts are treated differently, so check the rate for your product. The point is that a courier parcel from China to India has no duty-free allowance, and unless your shipping line prepays the charges, your customer is asked to pay before delivery. That is a hard sell for low-ticket items. Route 1 is fine for testing a handful of products. It is not a business model for India at scale.
Route 2: import in bulk and fulfil inside India
Here an Indian company buys stock from China, clears it through customs as a commercial import, and ships orders domestically. You pay duty once per shipment, your customers get domestic delivery speed, and the IGST is usually recoverable.
What you need before the first shipment:
- An IEC. India's Directorate General of Foreign Trade (DGFT) issues a 10-digit Importer-Exporter Code based on your PAN. It is required for business imports (personal-use imports are exempt). You apply online on the DGFT portal with form ANF 2A; the government fee is ₹500 and there is no renewal, but details must be updated on the portal every year between April and June.
- GST registration, so you can claim the IGST paid at import as input tax credit.
- A customs broker (customs house agent) in India to file the Bill of Entry and handle the port or airport clearance.
- The HSN code for each product, which sets the duty rate, the GST rate and whether a BIS order applies.
How the duty is calculated: a worked example
For a commercial import, duties stack in a fixed order. Start with the assessable value (the CIF value: goods, insurance and freight, converted to rupees at the customs exchange rate), then add basic customs duty (BCD), then SWS at 10% of the BCD, then IGST on the running total. If anti-dumping duty applies to your product, it is added too.
Example: a shipment with an assessable value of ₹10,00,000, a product with 10% BCD and 18% IGST.
| Line | How it's worked out | Amount |
|---|---|---|
| Assessable value (CIF) | Goods + insurance + freight | ₹10,00,000 |
| Basic customs duty | 10% × ₹10,00,000 | ₹1,00,000 |
| Social Welfare Surcharge | 10% × ₹1,00,000 | ₹10,000 |
| IGST | 18% × ₹11,10,000 | ₹1,99,800 |
| Paid at the port | ₹3,09,800 | |
| Recoverable as input tax credit | IGST, if GST-registered | ₹1,99,800 |
| Real cost of duty | BCD + SWS | ₹1,10,000 (11% of CIF) |
Compare that 11% with the roughly 31% a single courier parcel pays under Route 1, none of which your customer can reclaim. The gap is why bulk import wins once a product sells. Your BCD rate will differ by HSN code; check it on the CBIC tariff or with your broker before you order.
On the sourcing side, our fee is a percentage of the product cost per transaction. For example, $10,000 of goods falls in the second tier at 9%, so the sourcing fee is $900. The full table is on our pricing page.
Labels must be right before the goods clear customs
India's Legal Metrology (Packaged Commodities) Rules apply to imported retail packs, and the declarations have to be on the pack before the goods are cleared for sale. For imports, the label must show:
- The importer's name and address
- The country of origin
- The common or generic name of the product
- Net quantity in standard units
- The MRP, inclusive of all taxes
- The month and year of manufacture
- A consumer care phone number and email address
The rules let the importer apply a sticker carrying these details, and online listings have to show the importer's name and address and the country of origin as well, matching what is on the pack. The practical move is to have the labels printed to your design and applied in China before export, so nothing is missing at the Indian port. Labelling at our warehouse costs $7 per hour per person.
Check BIS before you place the order
Some products need Bureau of Indian Standards (BIS) certification or registration before they can be imported and sold. India withdrew many Quality Control Orders in late 2025 and 2026, mostly on raw materials, chemicals and machinery, but consumer categories remain covered:
- Toys for children under 14 still need the ISI mark under the Toys (Quality Control) Order, 2020. A new transition route for certification took effect in June 2026, but the requirement itself did not go away.
- Electronics under the Compulsory Registration Scheme keep expanding. For example, AR, VR and mixed-reality headsets came under it from May 2026, and smartphone screen protectors are scheduled to from April 2027.
Certification is tied to the product and its manufacturer, takes time, and is the responsibility of the importer or brand. Check your HSN code against the current QCO and CRS lists before you pay a deposit, not after the container is on the water.
Which route fits you
| Route 1: parcels from China | Route 2: bulk import into India | |
|---|---|---|
| Who it suits | Testing a few products | Indian businesses with steady sales |
| Duty and tax | About 31% per parcel (18% GST item), not reclaimable | BCD + SWS as a cost; IGST usually reclaimable |
| Paperwork | Per-parcel customs handled by the carrier | IEC, GST, customs broker, Bill of Entry |
| Labels | Retail labelling rules apply to goods sold in India | Must be on the pack before clearance |
| Delivery speed | International transit | Domestic |
How PackQuay helps
We source products from Chinese factories through our sourcing service, inspect 20% of every batch free (full inspection at $7 per hour per person), apply your Indian importer labels at $7 per hour per person, and ship the batch to India by freight for your customs broker to clear. If you want to test the market first, we can ship tracked parcels to India from our Xinxiang warehouse. Message us on WhatsApp with your product list and we will quote product cost, sourcing fee and shipping to India.
FAQ
Can I dropship from China to customers in India?
Yes, but each parcel is a personal import that pays duty. Since April 1, 2026 that is 10% basic duty plus surcharge and IGST, roughly 31% of the value for an item with 18% GST, so it suits testing more than a full business.
Do I need an IEC to import products from China into India?
Yes, for business imports. The IEC is a 10-digit code issued by DGFT on the basis of your PAN, applied for online with form ANF 2A. Goods imported purely for personal use are exempt.
How is import duty calculated in India?
Customs takes the CIF value in rupees, adds basic customs duty, then a Social Welfare Surcharge of 10% of that duty, then IGST on the total. BCD and SWS are a cost; IGST can usually be claimed back as input tax credit if you are GST-registered.
What must the label say on products imported into India?
The importer's name and address, the country of origin, the product name, net quantity, MRP including taxes, month and year of manufacture, and consumer care contact details. The label must be on the pack before the goods are cleared for sale.
Do toys and electronics need BIS certification?
Toys for children under 14 still need the ISI mark, and many electronics must be registered under BIS's Compulsory Registration Scheme. Check your product's HSN code against the current lists before ordering, because certification takes time.