How to Calculate Landed Cost and Import Duty from China to India

The number on a 1688 or Alibaba listing is the price of the product. It is not the price of the product sitting in your warehouse in Delhi or Mumbai, ready to sell. Between those two numbers sit freight, insurance, three separate customs charges, and — for most sellers — a margin that turns out thinner than it looked in the spreadsheet. Here's the actual math, in the order customs applies it.

Step 1: the assessable value

Indian customs doesn't calculate duty on the product price alone. It calculates duty on the CIF value — Cost, Insurance and Freight combined. So before any duty is applied, the base number is already higher than what you paid the supplier:

Assessable value = Goods value + Freight + Insurance

Sea freight on a full or shared container is cheap per unit but slow (typically 20–35 days port to port from Chinese ports to Nhava Sheva or Mundra). Air freight is fast — often under a week — but can run 4–8x the per-kg cost of sea freight, which matters a lot for heavy or bulky products and barely matters for something like jewellery or electronics accessories.

Step 2: Basic Customs Duty (BCD)

BCD is a percentage of the assessable value, and the percentage depends entirely on the product's HS (Harmonized System) code — not a flat rate across all imports. A textile product, a piece of electronics, and a toy can carry three different BCD rates even at a similar price point. This is the step most manual margin calculators skip entirely, because looking up the correct HS bucket for every product by hand doesn't scale past a handful of SKUs.

Step 3: Social Welfare Surcharge (SWS)

SWS is a flat 10% — not of the goods value, but of the BCD amount you just calculated. It's small on its own but easy to forget, and forgetting it means every landed-cost estimate comes in slightly optimistic.

Step 4: IGST

Integrated GST is charged last, and on the largest base of all four numbers combined — assessable value plus BCD plus SWS. The IGST rate itself follows the same GST slabs that apply domestically (5%, 12%, 18% or 28% depending on the product category), so this is also category-dependent, not a flat charge.

Landed cost per unit = Goods value + Freight (per unit) + BCD + SWS + IGST + port handling and incidental charges

A worked example

Say a product costs ₹500 per unit from the supplier, with freight and insurance working out to ₹60 per unit — an assessable value of ₹560. At a 15% BCD bucket, that's ₹84 in BCD. SWS at 10% of that BCD adds ₹8.40. IGST at 18%, applied to ₹560 + ₹84 + ₹8.40 = ₹652.40, adds another ₹117.43. Landed cost before port handling: roughly ₹769.83 — about 54% above the original ₹500 goods price. That gap is the part sellers who price straight off the supplier quote tend to miss.

Why this changes the import decision, not just the price tag

A product that looks like a strong margin at the supplier price can turn thin — or negative — once the full landed cost is in, especially in duty buckets above 15–20%. The number that actually matters isn't the supplier price versus the market price; it's the landed cost versus the market price, checked against what the product is realistically selling for right now, not what it sold for when you first noticed it.

This is the calculation behind BulkFlow's Import Confidence Score — every product that comes through the pipeline gets this exact waterfall run automatically, category-matched to its duty bucket, before it's scored against live market price and demand. The goal isn't to replace judgment; it's to make sure the judgment is working from the right number.

See it on a real batch of your own products — start free, or read how the bulk listing pipeline that feeds this calculation actually works.