India-UK FTA

[evenbeat]

My understanding is there was a 10% basic duty that was applied. This basic duty will go away after FTA. The saving would be around 12%. Apart from basic duty there is social welfare and igst that is applied. Social welfare would become zero as basic duty is zero now. So only igst of 18% should be applied, that too would reduce by 10% as it was applied on price after basic duty.

 

[murali_n]

Yes one can do that for sure, but here are a few points to consider.
1) Will a manufacturer ship direct while circumventing his distributor (if he has that model). Usually in the West distribution agreements are sacrosanct, unlike India where everything goes. So one cannot deal direct with mfr.
2) Then we have to deal with a local distributor (not sure if they will deal with a overseas customer if there is an India distributor in place). If they do so then at what price? Local srp minus local gst I would assume.
3) If an item costs $100 and in UK with local tax say $120, they can ship to India at $100. So let us assume they do that, one has to has add shipping costs, which can be high. Let us assume shipping is $15 (actually for speakers and other large items it can be much higher). So now landed cost in India is $115. Now we have to add 28% gst, plus a bunch of cesses. Say approx 40%, which is $46, so total is now $161.
4) Meanwhile, however the distributor in India doesn't buy at $100 from the mfr. He probably buys at $50-$60. Plus he doesn't buy 1 unit, he buys a larger qty, regularly, so his shipping cost will be lower say $10. So for him his landed cost is $70 plus 40% of which he gets 28% back when he sells the unit (I am still assuming 12% non refundable cesses). So distributor effective cost is $78.4 vs our cost which is $161.
5) I think if we approach the local distributor, we will get a similar price after some negotiation.
All of the above assumes that the distributor has a rational pricing structure, however some brands in India (I won't name the distributors but you can guess) are marked up so high (where the D&D wants to cover his entire year overhead in 1 sale to you), this option of importing yourself might work, provided the UK Distributor agrees to cut out the Indian distributor and sell direct to you.
If there are no distributors in India, then importing from a UK distributor may work, but the cost is going to be high regardless.
Above is my understanding, I may be wrong.
Cheers,
Sid

What about Foreign Exchange price variations and commissions.

 

[sidvee]

What about Foreign Exchange price variations and commissions.

Are you referring to the case where we import ourselves? If importing from UK then payment will have to be in pounds based on that days FX rate, to the local dealer, and duty payment in India will be in INR.
Cheers,
Sid

 

[rwnano]

What about buying from eBay.co.uk ..?

 

[sidvee]

I think we all are jumping ahead of ourselves. Whatever I have read so far does not show electronic items as duty free from UK. So one has to get the total FTA details before we get to know if Audio related items will be duty free. If that is the case, then there is a case for self import, provided other conditions like a GST no. etc. can be met.
Cheers,
Sid