There are several restrictions on the import of used equipment in India, prescribed by India’s import-export policy, in force 1997-2002. Second hand capital goods with a minimum residual life of 5 years can be imported by actual users of such equipment without a license. The importer is required to furnish a declaration to the Customs Department specifying the residual life of the second hand capital goods in a prescribed format. (In August 1999 the Directorate General of Foreign Trade said that second hand equipment not older than five years would be allowed automatically.)

The importer is also required to furnish a certificate from an internationally reputable inspection and certification agency that the purchase price of the equipment is reasonable. This certificate is required at the time of clearing the goods through customs, where the CIF value of the goods exceeds Indian rupees 10 million (dols 238,000). Where the second hand equipment has a CIF value of up to rs. 1 million (US$23,800), customs authorities will not insist upon such a certificate.

The second hand equipment shall not be transferred, sold or otherwise disposed of within a period of 5 years from the date of import, except with prior permission of the Director General of Foreign Trade. While selling, U.S. firms should remember that valuation of used or second-hand equipment is a very technical area with frequent disputes between customs and the importer.

U.S. exporters can contact

Ministry of Commerce
Udyog Bhavan, Maulana Azad Road
New Delhi 110001, India
Tel: 91-11-301-1777
Fax:91-11-301-1779

Spares, including accessories and tools for the maintenance and operation of such equipment can be imported to the extent of 15 percent of the value of the equipment. Airlines and domestic private carriers, private and public sector companies and state governments that operate aircraft, and charter service operators are eligible to import reconditioned/second hand aircraft spares on the recommendation of the Directorate General of Civil Aviation. No license is required for such imports.

The import of second hand or used motor cars is restricted, which means that they cannot be imported except against a license or in accordance with a public notice issued in this behalf. Such licenses are available from the Director General of Foreign Trade; in normal circumstances, these are issued as a matter of routine. Second hand refrigerated lorries and trucks are freely importable.

Reconditioned components of computers are classified as consumer goods and are similarly restricted. They can be imported only against a special import license (SIL). SIL’s are earned by exporters against the value of exports, and are freely transferable. Importers that need these licenses for imports against SIL’s can easily obtain them from brokers for such licenses, but at a premium (currently 12-15 percent) on the value of the license. The market for SIL’s is a legitimate one, and there is a large number of brokers that put buyers and sellers together.

India is a high-cost economy for capital equipment, and Indian manufacturers and investors constantly seek to reduce their capital costs. For this reason, demand for used and reconditioned equipment is high across a range of industry sectors. The best opportunities for U.S. firms to pursue are in the industry sectors of construction, mining, medical, machine tools, plastics, steel, oil refining, computers, printing, packaging and dairy equipment.

While rates of customs duty vary from product to product, they are, generally speaking, lower for used equipment as compared with new equipment.

Can we buy and sell used equipment in India with the manufacturers name on the machine? Will it invoke legal litigation? The equipments will not carry manufacturers warranty, but an extended warranty.