As businesses in Sri Lanka look to expand their horizons and diversify their product offerings, one country that import business owners are beginning to look towards is China. According to Trading Economics, China is one of Sri Lanka’s largest trading partners, with Chinese exports to the country valued at US$334 million in September 2023. This presents Sri Lankan businesses with ample opportunities to connect local buyers with the most profitable overseas goods and products at competitive prices.
Some of the most popular types of products imported into Sri Lanka from China include broadcasting equipment and other electronics, fabric and textiles, vaccines, and other biomedical products. This reflects the wide demand for Chinese goods from both the commercial and consumer sectors in Sri Lanka, with the potential to expand this array even further.
However, to ensure the best possible import process to Sri Lanka from China, it’s crucial to understand the import and export requirements and regulations in both countries. In this guide, we'll walk you through the key steps and considerations for importing goods and items from China to Sri Lanka so that you can guarantee a smooth and uninterrupted shipping process from start to finish.
Customs regulations when importing goods from China to Sri Lanka
1. Timely and accurate payment of export duties, taxes, and other fees.
China has a complex system of export duties, taxes, and fees that vary depending on the nature of the goods being shipped, their destination, and other factors. Some goods may be subject to value-added tax (VAT) or consumption tax, whereas others may have export duties imposed accordingly.
Additionally, while Sri Lanka and China do not have a bilateral free trade agreement (FTA) at the moment, both countries are parties to the existing Asia-Pacific Trade Agreement (APTA). Certain goods covered within the APTA may thus qualify for reduced or eliminated export duties, and businesses should familiarise themselves with these categories to optimise their import costs and trade outcomes.
Businesses should also keep in mind that Sri Lanka and China have been discussing a potential bilateral FTA for years, and should this FTA come to pass, there may be even more trade opportunities between the two countries. Learn more about Sri Lanka’s free trade agreements and how to use them to your advantage.
2. Precise and accurate submission of all required export documentation.
Accurate and comprehensive documentation is the foundation of a successful import procedure from China to Sri Lanka. Some of the key documents you'll need when exporting from China include:
- Commercial invoice: A detailed invoice that provides information about the goods, their value, and the terms of sale. Certain types of goods, such as food items, medical supplies, and other perishables, may require specific labelling to meet industry-wide safety standards.
- Packing list: An itemised list of the contents of each package or container, including weights and dimensions.
- Customs declaration: A comprehensive declaration of the goods being exported, including their classification and value.
- Bill of lading (B/L): A B/L is a legal document issued by your carrier of choice that acknowledges the receipt of goods for shipment.
Understanding the specific requirements and how to apply them when importing goods from China to Sri Lanka is vital, as this will ensure the shipping and import process remains smooth and uninterrupted. Inaccurate or incomplete documentation can lead to customs delays, increased costs, and even the risk of goods being held or returned – disrupting your entire supply chain.
3. No de minimis threshold for imports into Sri Lanka.
Sri Lanka does not provide de minimis treatments for inbound shipments. As such, all categories of imports from China are not subjected to exemptions of customs duties, taxes, or VATs. However, it's essential to be aware of any potential changes in regulations in order to make informed decisions about your imports.
4. Strict adherence to restricted and prohibited item regulations.
Both China and Sri Lanka have their own lists of items that are restricted and/or prohibited from exports and imports, respectively. Importers must be vigilant about the nature of the goods they plan to import in order to avoid violating these terms by inadvertently shipping restricted or prohibited items. This can result in severe consequences, including delays, costly fines, or even legal action – all of which will severely impact your business.
In China’s case, items that are restricted or banned from export include:
- Gold, silver, and other precious metals
- Chinese cultural artefacts, antiques, and relics
- Items made from endangered animals or plants (strictly prohibited from export without the necessary permits)
- Goods with potential military or dual-use applications
- Metal ores, such as gallium and germanium
- Selected vaccine technologies
- Technology related to mining, engineering, meat processing, and other sectors
- Technology related to agriculture, chemical processing/manufacturing, and electrical machinery manufacturing
- Research and development materials related to cell cloning or gene editing
Meanwhile, on Sri Lanka’s end, the State Minister of Finance stated as recently as October 2023 that the country would be removing import restrictions on all items except vehicles effectively immediately.
As an import business, it’s crucial to familiarise yourself with the list of restricted or prohibited goods at all times. This will ensure your products aren’t just allowed to be imported but comply with the most current customs regulation standards.
5. Proper packaging and labelling of all goods for import and export.
When exporting goods from China to Sri Lanka, meticulous attention to packaging and labelling is paramount to ensure seamless shipping and customs clearance procedures. Proper packaging safeguards your products from damage during transit, while compliant labelling ensures that your shipments adhere to Sri Lanka's import regulatory standards.
Some considerations to keep in mind include:
- Product-specific packaging: Tailor your packaging to the nature of your products to ensure they arrive intact. Fragile items, for instance, might necessitate cushioning materials or sturdy crates, while wholesale bulk products could require palletisation.
- Sufficiency and durability: Invest in high-quality materials that can endure handling, stacking, and potential exposure to the elements to ensure your packaging can withstand the rigours of international shipping and transit.
- Customs compliance: Your packaging should comply with both Chinese and Sri Lankan customs regulations, which may include using standardised packaging materials and clearly marking packages with essential information like country of origin, weight, and contents.
- Sustainability: Consider embracing eco-friendly packaging solutions when possible. This not only aligns with global environmental trends but can also enhance your brand's reputation.
- Language compliance: Sri Lanka's official languages are Sinhala and Tamil. While English is widely understood, consider including translations in one or both of these languages to smoothen the process of importing goods from China.
- Industry-specific regulatory compliance: Sri Lanka's labelling regulations may vary depending on the type of product you are exporting. For example, food and perishable items may require their nutritional information, expiration dates, and safety warnings to be printed, among others.
