India's textile industry is one of the largest in the world, contributing significantly to the country's GDP and employment. To maintain global competitiveness, textile manufacturers regularly import advanced machinery from leading producers in countries like Switzerland, Germany, Italy, Japan, and China. Whether you need high-speed looms, spinning frames, dyeing machines, or finishing equipment, understanding the import textile machinery process is crucial for cost-effective procurement.
This guide covers the complete textile machinery import India procedure, from regulatory requirements and the EPCG scheme to customs clearance and post-import compliance. Business professionals in the textile sector will find practical information to help them plan and execute their machinery imports efficiently.
Types of Textile Machinery for Import
Textile machinery covers a wide spectrum of equipment used across the production chain. This includes spinning machinery such as ring frames and rotor spinning machines, weaving machines including rapier looms, air-jet looms, and water-jet looms, knitting machines, dyeing and finishing equipment, printing machines, and garment manufacturing equipment like cutting tables and automated sewing systems.
These machines are primarily classified under HS codes 8444 to 8452 of the Customs Tariff Act. The specific classification depends on the machine's function, technology, and configuration. Accurate HS code determination is critical for duty optimization and regulatory compliance.
Regulatory Requirements
An Import Export Code from DGFT is the fundamental requirement for importing textile machinery. Apply through Patron Accounting's IEC registration service for professional assistance. You also need ICEGATE registration for electronic customs filing and AD Code registration with your bank for foreign exchange transactions.
The EPCG scheme is particularly relevant for textile machinery imports. Since a large portion of India's textile production is export-oriented, many importers qualify for this duty exemption scheme. The authorization must be obtained from the regional DGFT office before the machinery is shipped from the supplier's country.
EPCG Scheme Benefits for Textile Machinery
The Export Promotion Capital Goods scheme allows textile manufacturers to import machinery at zero customs duty in exchange for fulfilling an export obligation of six times the duty saved within six years. For the textile sector, this scheme has been widely utilized, as many manufacturers export a significant portion of their production.
The application for EPCG authorization requires details of the machinery being imported, the manufacturing facility where it will be installed, and a projected export plan. Once approved, the authorization is presented to customs at the time of clearance to avail the duty exemption. This can result in savings of 7.5% or more on the value of the machinery.
Step-by-Step Import Process
Step 1: Obtain IEC and Register on ICEGATE
Apply for your Import Export Code through the DGFT portal. Complete your ICEGATE registration for electronic customs document filing. Register your AD Code with the customs authority at your port of import.
Step 2: Classify the Machinery Under Correct HS Code
Consult with your customs broker to identify the precise HS code for your textile machinery. Spinning machines, weaving machines, and dyeing equipment each fall under different tariff headings. This classification directly impacts the duty rate and EPCG eligibility.
Step 3: Apply for EPCG Authorization
Submit your EPCG application at the regional DGFT office with details of the machinery, installation location, and export projections. Processing typically takes 2 to 4 weeks. The authorization must be obtained before the shipment leaves the supplier's country.
Step 4: Coordinate Shipment and Insurance
Finalize your purchase order and work with freight forwarders experienced in heavy machinery logistics. Textile machinery often requires specialised handling and packaging. Ensure comprehensive marine insurance coverage for the entire transit.
Step 5: Customs Clearance
Your customs broker files the Bill of Entry on ICEGATE upon arrival. Customs officers verify all documents including the EPCG authorization, assess duties, and release the consignment upon successful verification and duty payment.
Step 6: Installation and Commissioning
Transport the machinery to your factory and coordinate installation with the supplier's technical team. Most textile machinery suppliers provide installation supervision and operator training as part of the purchase agreement. Retain all commissioning reports for compliance records.
Documents Required
Essential documents include the IEC certificate, ICEGATE registration, EPCG authorization, commercial invoice, packing list, bill of lading, certificate of origin, insurance policy, technical specifications and machine catalogue, installation guide, and a declaration confirming the machinery will be used for textile manufacturing and export production.
Active GST registration is essential for claiming input tax credit on the IGST paid during customs clearance. This reduces the effective cost of your textile machinery import significantly. Ensure your GST filing is up to date before initiating the import.
Import Duties on Textile Machinery
Basic Customs Duty on textile machinery generally ranges from 0% to 7.5%. Under the EPCG scheme, BCD is reduced to zero. IGST at 18% is applied on the assessable value plus customs duty, and Social Welfare Surcharge is levied at 10% of the BCD. The effective duty rate for non-EPCG imports typically ranges from 25% to 30% of the CIF value.
Certain textile machinery categories benefit from specific duty exemptions under customs notifications aimed at promoting the textile sector. Importers should check the latest notifications to identify any additional concessions applicable to their specific machinery type.
Post-Import Compliance
For EPCG imports, the machinery must be installed at the declared premises and used for production of export goods. Annual returns must be filed with DGFT showing progress towards the export obligation. The machinery cannot be sold, transferred, or disposed of until the export obligation is fully met.
Regular maintenance records, production logs, and export documentation should be maintained systematically. DGFT may conduct physical verification of the installed machinery at any time during the obligation period. Non-compliance can result in recovery of the exempted duty with interest and penalties.
