India is flourishing in the beauty and personal care industry, and starting a cosmetics import business can be highly profitable. With increasing consumer demand for global cosmetics products, entrepreneurs want to import cosmetics. However, the process involves several legal obligations, licenses, and structure approaches.
Starting an import business can be complicated, so we will take you through the step-by-step process for starting a cosmetics import business in India, covering legal formalities, licensing, documentation, and business plans.
Step-By-Step Process To Start Cosmetic Import Business In India
Below we have simplified the steps to start an import business for cosmetics:
- Understand the Indian cosmetics market.
- Legal requirements & registration for cosmetics import business
- Comply with BIS standards & labeling norms.
- Find international suppliers & negotiate terms.
- Customs clearance & import duties.
For a better understanding, here we have explained each step below:
Step 1: Understand The Indian Cosmetics Market
Before getting into an import business, conduct market research such as:
What are the best cosmetics-selling brand
Who is your target audience
Analyze the market competition
Search for distribution platforms( online, offline, social media, etc.)
Step 2: Legal Requirements & Registration For Cosmetics Import Business
To start an import business of cosmetics registration of the beauty business and fulfillment of legal requirements also become mandatory:
Obtain Import Export Code (IEC): To import cosmetics legally into India, you must obtain an Import Export Code from the Directorate General of Foreign Trade (DGFT). This 10-digit code is mandatory for all import-export businesses in India.
Register Your Business: Register your business with the authorized department to conduct business activities smoothly without facing any issues. The Ministry of Corporate Affairs (MCA) is concerned with registering businesses as sole proprietors, LLP partnerships, or private limited companies.
Obtain CDSCO Registration (Cosmetic Import Registration Certificate): You must obtain a cosmetic import Registration certificate to import cosmetics products from outside the country. The Central Drugs Standard Control Organisation issues this certificate under the Drugs and Cosmetics Act, of 1940.
Step 3: Comply With BIS Standards & Labeling Norms
Imported beauty products must comply with the BIS regulatory standards and labeling norms. It must include the product name, ingredients list, manufacturer’s details, batch number, manufacturing date, expiry date, and importer’s details. Products can be rejected if the products fail to comply with the labeling requirements established by the customs department.
Step 4: Find International Suppliers & Negotiate Terms
To source quality beauty products for the cosmetics import business connect with the best international suppliers, manufacturers, & distributors. Multiple online platforms can help find reliable suppliers. Apart from that, there are a few key factors to consider, listed below:
1. Product quality certifications (ISO, GMP, FDA-approved).
2. Minimum Order Quantity (MOQ) should be mentioned in the form to import cosmetics products.
3. Import duties & taxes should be paid while importing products legally.
Once you become a regular buyer of a particular supplier you can negotiate the pricing of products to buy products at a cheaper rate. Also, sign a contract with them to ensure smooth business transactions.
Step 5: Customs Clearance & Import Duties
Once the products arrive at the Indian ports, you must comply with customs clearance protocol. You may require the following documents:
1) Bill of Entry
2) CDSCO Import Registration Certificate
3) IEC Code
4) BIS compliance certificate
5) Packing list & invoice
At the time of customs clearance, you have to pay the Import duties such as basic customs duty 10-20% (varies by product), GST 18%, and Additional charges (if applicable).
Step 6: Establish Distribution Channels
Establishing distribution channels for your cosmetics import business is a crucial step. It defines the platform where you are promoting the products, it can either be an E-commerce platform, social media, or offline medium.
Step 7: Post-Sale Compliance & Customer Support
After-sale services are important to ensure customer satisfaction, so make sure you provide proper return policies, comply with BIS safety standards, & give customer support for queries & complaints.
Documents Required To Import Cosmetics In India
Here we have provided a list of documents that you may require to import cosmetics in India, to start your own cosmetics import business:
- Cover letter
- Form 42
- Treasury Challan
- Manufacturer’s Power of Attorney
- Schedule D (III)
- Original or copied product label.
- Free Sale Certificate (FSC), Marketing Authorization letter, or Manufacturing License for all variants must be submitted.
- Product specifications and testing protocols.
- List of countries with granted Market Authorization, import permission, or registration.
- Product package inserts.
- Digital copies of information regarding brands, products, and the manufacturer’s product.
Registration Guidelines For Cosmetics Import Business
- To start a cosmetics import business, all the beauty products imported for sale in India must be registered with the licensing authority according to the Drugs & Cosmetics Rules, 1945. To apply for registration, an applicant must submit Form-42 along with all required documents to the Drugs Controller General.
- In this context, a “Brand” refers to each category of cosmetic products listed in Column 3 of the attached Annexure. It encompasses all product variants, such as colors, shades, pack sizes, etc. However, a “Brand” does not refer to the trade name of any specific product or the manufacturer itself.
- A “Manufacturer” is defined as a person or entity outside India that owns the trade name of the cosmetic product brand and manufactures the product either at its site or at a location owned by another manufacturer under its brand name.
- An “Authorized Agent” is an individual or entity in India designated by the manufacturer to manage the manufacturer’s business activities in India, ensuring compliance with the Act’s provisions.
- A “Subsidiary” refers to a company in India that is owned by the manufacturer.
- The term “Any other importer” encompasses any person or entity seeking to import cosmetic products aside from the manufacturer, its authorized agent, or its subsidiary.
- An application for a registration certificate must be submitted along with the required fee and information as outlined in Schedule D-III. A single Form 42 application can cover multiple brands produced at one or more locations by the same manufacturer. Subsequently, a single registration certificate in Form 43 may be issued to the applicant for importing any number of brands manufactured at these locations single
Who Is Eligible To Apply For Import Registration Of Cosmetics:
As per the Central Drugs Standard Control Organisation (CDSCO), the following people are eligible to apply for an import registration certificate for cosmetics. Such as:
- The Manufacturer with a registered office in India.
- The Manufacturer’s Authorized Agent.
- The Manufacturer’s Subsidiary.
- Any other importer.
How Do I Import Cosmetic Products?
For importing cosmetics products there are several regulatory compliance that have to be taken into consideration. To start a cosmetics import business in India you must research regulations, obtain an import license, comply with labeling & safety standards, & ensure proper documentation.
How Profitable Is The Cosmetics Import Business?
Importing goods can be highly profitable, as it is considered a beneficial business. Success in the import business depends on various key factors such as potential, brand value, regulatory expenses, & online market growth.
Which Country Imports The Most Cosmetics?
As per the current trade data, China ($10.4B) is the world’s largest importer of beauty products followed by the United States($6.58B), Hong Kong ($5.64B), Germany($3.04B), & Singapore($2.82B).
