How to Calculate Your Total Import Cost in India
Total import cost in India = CIF value + Basic Customs Duty (BCD) + Social Welfare Surcharge (10% of BCD) + IGST (5–18%) + local charges (CHA fees, terminal handling, inland transport). For most products, total duty adds 15–35% on top of CIF value. Use the formula: Landed Cost = FOB + Freight + Insurance + All Duties + Local Charges.
Last updated: May 2026
Table of Contents
- The Landed Cost Formula Explained
- Customs Duty Components — What Each One Means
- Worked Example — Importing a CNC Machine from China
- Worked Example — Importing Electronics (Laptops) by Air from Taiwan
- How to Find Your Product's BCD Rate
- Hidden Costs Importers Forget to Budget For
- Air Freight vs Sea Freight — Impact on Total Import Cost
- Free Tool: Calculate Your Exact Landed Cost
- FAQs
The Landed Cost Formula Explained
Landed cost is the total amount to get imported goods into your warehouse — not just the supplier's invoice.
LANDED COST = FOB + Freight + Insurance + BCD + SWS + IGST + Local Charges
- FOB: Supplier's price at origin port.
- Freight: Ocean or air freight to Indian port/airport.
- Insurance: Typically 0.5–1% of FOB.
- CIF = FOB + Freight + Insurance: Customs assessable value.
- BCD: Applied on CIF. Rate varies by HS code.
- SWS: 10% of BCD.
- IGST: Applied on (CIF + BCD + SWS). Rate: 5%, 12%, or 18%.
- Local Charges: CHA fees, THC, port storage, inland transport, warehousing.
Freight increases CIF, which compounds into higher BCD, SWS, and IGST.
Customs Duty Components — What Each One Means
| Duty/Charge | Calculated On | Typical Rate | Notes |
|---|---|---|---|
| Basic Customs Duty (BCD) | CIF value | 0–100% | Most products: 0–20%. Check CBIC tariff. |
| Social Welfare Surcharge (SWS) | BCD amount | 10% of BCD | Applies on almost all goods |
| IGST | CIF + BCD + SWS | 5%, 12%, or 18% | 5% for essentials, 18% for most goods |
| Compensation Cess | Some goods only | Varies | Tobacco, autos, luxury items |
| Antidumping Duty (ADD) | CIF value | Varies widely | Specific products from specific origins |
| Countervailing Duty | Some goods | Varies | Rare — on subsidised imports |
For 95% of imports, only BCD + SWS + IGST apply.
Worked Example — Importing a CNC Machine from China
Product: CNC machining centre (HS 8457.10), Shanghai to JNPT.
| Component | USD | INR (₹83/USD) |
|---|---|---|
| FOB value | $20,000 | ₹16,60,000 |
| Sea freight (FCL 20ft) | $900 | ₹74,700 |
| Insurance (0.5% of FOB) | $100 | ₹8,300 |
| CIF value | $21,000 | ₹17,43,000 |
Duty calculations:
- BCD at 7.5% of CIF = ₹1,30,725
- SWS at 10% of BCD = ₹13,073
- IGST base = CIF + BCD + SWS = ₹18,86,798
- IGST at 18% = ₹3,39,624
Local charges:
- CHA clearance fees: ₹15,000
- Terminal Handling Charge (THC): ₹12,000
- Port storage (3 days): ₹5,000
- Inland transport JNPT → Bengaluru: ₹45,000
- Total local charges: ₹77,000
TOTAL LANDED COST: ₹23,03,422
₹16,60,000 (FOB) + ₹74,700 (freight) + ₹8,300 (insurance) + ₹1,30,725 (BCD) + ₹13,073 (SWS) + ₹3,39,624 (IGST) + ₹77,000 (local)
Landed cost multiplier: 1.39× FOB
With EPCG scheme (0% BCD): saves ~₹1,69,798. New landed cost: ₹21,33,624 (1.29×).
Worked Example — Importing Electronics (Laptops) by Air from Taiwan
Product: 50 laptops (HS 8471.30), Taipei to Bengaluru.
| Component | USD | INR (₹83/USD) |
|---|---|---|
| FOB value ($100 × 50) | $5,000 | ₹4,15,000 |
| Air freight (TPE → BLR) | $400 | ₹33,200 |
| Insurance | $25 | ₹2,075 |
| CIF value | $5,425 | ₹4,50,275 |
Duty calculations:
- BCD on laptops: 0% (ITA-1 exemption)
- SWS: ₹0 (no BCD to surcharge)
- IGST at 18% of CIF = ₹81,050
Local charges:
- CHA fees: ₹8,000
- Airport terminal charge (BLR): ₹6,000
- Delivery to Bengaluru: ₹3,000
- Total local: ₹17,000
TOTAL LANDED COST: ₹5,48,325
₹4,50,275 (CIF) + ₹81,050 (IGST) + ₹17,000 (local)
Landed cost multiplier: 1.10× FOB
Always verify your HS code first.
How to Find Your Product's BCD Rate
A single digit HS code error can change duty by 10–20%.
- Find the 8-digit HS code using our HS Code Finder or your CHA.
- Go to CBIC Customs Tariff (cbic.gov.in).
- Note BCD rate in Column 4.
- Check antidumping duty on CBIC ADD list.
- Verify IGST rate on gst.gov.in.
Use our Import Duty Calculator for instant rates.
Air Freight vs Sea Freight — Impact on Total Import Cost
Freight mode is the biggest lever after duty rate.
| Factor | Sea Freight | Air Freight |
|---|---|---|
| Freight cost (per kg, China→India) | ₹15–40/kg | ₹200–400/kg |
| Transit time | 14–25 days | 3–5 days |
| Duty calculation base | Same CIF method | Same CIF method |
| Total landed cost premium over FOB | 30–40% typical | 40–60% typical |
| Best for | Heavy, bulky, low-margin goods | High-value, time-sensitive, light goods |
Air freight adds 10–20 points to the multiplier, but faster turnover offsets it for electronics. Sea freight wins for raw materials and machinery.
Free Tool: Calculate Your Exact Landed Cost
Our free landed cost calculator automates the formula in 2 minutes.
- Enter FOB in USD or INR
- Select from 50+ categories with auto-filled BCD and IGST
- Input freight or use lane estimates
- Get instant CIF, BCD, SWS, IGST, and total breakdown
- Live USD/INR rate
It flags ADD, EPCG, and FTA savings.
Frequently Asked Questions
What is the formula for calculating landed cost in India?
Landed Cost = FOB value + Freight + Insurance (= CIF) + Basic Customs Duty (BCD at your HS code rate) + Social Welfare Surcharge (10% of BCD) + IGST (5%, 12%, or 18% of CIF+BCD+SWS) + Local charges (CHA fees, terminal handling, inland transport). For most manufactured goods, total landed cost is 1.3× to 1.5× the FOB price.
What is CIF value and why does Indian customs use it?
CIF (Cost, Insurance, Freight) is the value of goods at the Indian port of entry — it equals FOB price plus sea/air freight plus insurance. Indian customs uses CIF as the assessable value to calculate duties, unlike some countries that use FOB. This means your freight cost directly affects how much duty you pay.
What is the IGST rate on imports in India?
IGST on imports mirrors the domestic GST rate for the product. Most goods attract IGST at 18% — electronics, machinery, chemicals, textiles. Essential goods attract 5% (basic food, medical devices listed in exemption notification) or 12% (processed food, some medicines). IGST is applied on the full CIF + BCD + SWS base, not just CIF.
Can I get a refund of IGST paid on imports?
Yes, if you are a GST-registered business and the imported goods are used in your business, you can claim credit of IGST paid as Input Tax Credit (ITC) against your GST output liability. This effectively makes IGST a cash-flow item, not a real cost, for registered businesses. You cannot claim ITC if goods are for personal use.
What is the Social Welfare Surcharge on imports?
Social Welfare Surcharge (SWS) is a 10% surcharge levied on the Basic Customs Duty (BCD) amount. It was introduced in the 2018 Union Budget to fund social welfare schemes. If your BCD is ₹10,000, SWS is ₹1,000. SWS applies on almost all dutiable imports and is calculated on BCD before IGST.
How do I calculate import duty on machinery in India?
For machinery (typically Chapter 84, BCD 7.5%): on a CIF value of ₹10,00,000 — BCD = ₹75,000, SWS = ₹7,500, IGST base = ₹10,82,500, IGST at 18% = ₹1,94,850. Total duty = ₹2,77,350 (27.7% of CIF). Under EPCG scheme, BCD drops to 0%, saving ₹75,000 + ₹7,500 + ~₹14,850 in IGST reduction = ~₹97,350 saved.
Are there any imports with zero customs duty in India?
Yes. India has zero BCD on many products under trade agreements and domestic policy: IT products under ITA-1 (laptops, desktops, routers — 0% BCD), life-saving drugs and medical devices on exemption lists (0% BCD), certain capital goods under EPCG scheme (0% BCD with export obligation), and goods from FTA partner countries meeting rules of origin (India-UAE CEPA, India-ASEAN FTA).