Top HSN codes which India imports and exports

You've probably heard about HSN codes if you've ever grappled with GST compliance or tried to streamline your supply chain. These codes, short for Harmonized System of Nomenclature, are more than just numbers—they're the backbone of global trade. 

They ensure that every product you handle, from raw materials to finished goods, is classified correctly, which is crucial for everything from tax calculation to customs clearance.

But here’s where it gets interesting: Not all HSN codes are created equal. Some are far more common in India's import and export activities. 

This article will explore the top HSN codes essential for your import and export business. Understanding these can give you a significant edge in managing logistics, ensuring compliance, and optimising your business processes.

What Are HSN Codes?

Have you ever wondered how goods are systematically classified in global trade? 

The HSN code, or Harmonized System of Nomenclature, is the answer. Developed by the World Customs Organization (WCO), this standardised system is used worldwide to classify over 5,000 products. 

In India, the HSN code is essential for organising goods into 4-, 6-, or 8-digit codes, which streamline everything from customs clearance to tax compliance. 

This uniform system ensures that goods are classified correctly across borders, making it an indispensable tool in domestic and international trade.

Example of HSN Code:

An example of an HSN code in India is for an LED Television, which falls under the code 85 28 12 11.

Here's how it breaks down:

Also Read: Software HS Code for Import, Export, and Services in India | Pazago

The Significance of HSN Codes in Global Trade

Why does the HSN code matter in global trade? 

As an internationally recognised standard, the first six digits of the HSN code are uniform across all countries, ensuring consistency in how goods are categorised. India adds additional digits for more precise classification, such as the 8-digit codes used here. 

This consistency is crucial for global supply chains and logistics as it minimises errors and ensures that goods are taxed correctly under GST and other international trade agreements.

Purpose of Identifying Top HSN Codes

Why should you focus on the top HSN codes in India? Understanding these codes helps you navigate domestic and international trade complexities more efficiently. 

For example, knowing the most commonly used HSN codes for imports and exports can help optimise your supply chain, reduce the risk of customs delays, and ensure compliance with GST and global trade standards. 

The HSN code system, regularly updated by the Directorate General of Foreign Trade (DGFT), is a living document that evolves to meet the needs of global commerce. Staying informed about these updates is crucial for any business engaged in international trade.

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Top 20 8-digit HSN Codes for Indian Exports

Here's a table with the HSN code, commodity, and 2023-24 export values in US$ million:

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Top 20 8-digit HSN Codes for Indian Imports 

Here's a table with the HSN code, commodity, and 2023-24 import values in US$ million:

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Future Outlook on India's Trade Based on Top HSN Codes 

1. Trend Analysis of India's Export Based on Top HSN Codes 

Here’s a detailed trend analysis based on the figures:

1. Energy Exports:

• Automotive Diesel Fuel (HSN Code: 27101944): Despite a significant year-over-year decline of 24.19% in overall value from 2022-23 to 2023-24, the April-May 2024-25 period saw a substantial increase of 66.27%. This suggests a strong rebound in demand, potentially driven by global economic recovery or shifts in energy markets.
• Aviation Turbine Fuels (HSN Code: 27101939): Like diesel, this sector experienced a slight overall decline of 9.74% but showed a strong resurgence in April-May 2024-25 with a 40.68% increase. This indicates a recovery in global travel and aviation post-pandemic.
• Motor Gasoline (HSN Code: 27101241): Exhibited resilience with only a 9.87% decline for the year but a notable 58.68% increase in the April-May period, reflecting fluctuating global oil prices and demand.

2. Technology and Electronics Exports:

• Smartphones (HSN Code: 85171300): This sector showed a robust growth of 42.15% from 2022-23 to 2023-24, with continued momentum in the April-May period (35.40% increase). The growth reflects India's increasing role as a global manufacturing hub for electronics.
• Turbo-Jets (HSN Code: 84111200): Another high-tech export, Turbo-Jets, saw a solid 35.54% annual growth and a 48.13% increase in the April-May period, indicative of India's growing capabilities in advanced aerospace manufacturing.

3. Precious Metals and Stones:

• Diamonds (HSN Code: 71023910): This sector saw a significant decline of 27.63% over the year, with a further 15.44% drop in the April-May period. This downturn could be attributed to market volatility, changing consumer preferences, or geopolitical tensions impacting luxury goods.
• Unstudded Gold (HSN Code: 71131911): Despite a complete lack of data in 2022-23, this category emerged strongly in 2023-24, reflecting either a new market development or a shift in reporting.

4. Agricultural Exports:

• Basmati Rice (HSN Code: 10063020): Basmati rice exports showed a healthy growth of 22.05% annually and 13.11% in the April-May period, driven by strong global demand, especially in Middle Eastern and European markets.
• Vannamei Shrimp (HSN Code: 03061720): There was a slight annual decline of 12.09%, with nearly stable performance in the April-May period. This indicates market saturation or competition from other shrimp-exporting nations.

Key Trends and Observations:

1. Recovery in Energy Exports: Despite an annual decline, the strong rebound in energy-related exports during the April-May period suggests a recovery phase, likely due to increased global demand as economies bounce back post-pandemic.
2. Growth in High-Tech Manufacturing: The robust performance in smartphone and turbo-jet exports underscores India's growing role as a major player in global technology manufacturing, driven by government initiatives like "Make in India."
3. Fluctuations in Luxury Goods: The decline in diamond exports highlights the volatility in luxury markets, possibly due to economic uncertainties or changing consumer behaviour.
4. Resilience in Agricultural Exports: Agricultural products like Basmati rice continue to perform well, indicating strong demand in traditional markets and the effectiveness of India's export strategies in this sector.

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2. Trend Analysis of India's Import Based on Top HSN Codes 

1. Energy Imports:

• Petroleum Crude (HSN Code: 27090010): Petroleum Crude remains the largest import category, valued at $139,855.61 million in 2023-24. However, this represents a 13.35% decline from the previous year. Despite this, the April-May 2024-25 period shows a strong recovery with a 26.71% increase. This trend reflects global oil price fluctuations and India's dependency on crude oil for energy needs. As India gradually shifts toward renewable energy sources, the long-term demand for crude oil might plateau or decline.
• Liquified Natural Gas (HSN Code: 27111100): LNG imports saw a 21.67% annual decline, with a modest 2.96% drop in the April-May period. This suggests a potential decrease in reliance on LNG, possibly due to increased domestic production or a shift towards renewable energy sources.

2. Precious Metals and Stones:

• Unwrought Forms of Gold (HSN Code: 71081200): This category saw a significant increase of 30.88% in 2023-24, with an even larger 37.09% increase in the April-May period. This surge indicates strong demand for gold, possibly driven by consumer investment, jewellery manufacturing, or as a safe-haven asset amidst global economic uncertainties.
• Non-Industrial Diamonds (HSN Code: 71023100): Despite being a high-value import, this category experienced a 17.45% decline over the year, with an 11.57% drop in the April-May period. This decline could be attributed to a slowdown in the luxury market or reduced demand for raw diamonds due to market saturation or geopolitical factors.

3. Industrial and Technological Imports:

• Monolithic Integrated Circuits - Digital (HSN Code: 85423100): This sector showed robust growth with a 24.16% increase in 2023-24, and a 26.04% rise in the April-May period. This reflects the ongoing digital transformation and increasing demand for electronic components in industries like telecommunications, automotive, and consumer electronics.

• Personal Computers (HSN Code: 84713010): Imports in this category slightly decreased by 7.79% annually, with a modest 3.35% increase in the April-May period. The slight decline could be due to the stabilisation of demand post-pandemic as the work-from-home trend normalises.

4. Agricultural and Food Imports:

• Crude Palm Oil (HSN Code: 15111000): The import of crude palm oil saw a sharp decline of 30.13% over the year, with a slight recovery of 38.10% in April-May 2024-25. The reduction could be due to increased domestic production or shifts in dietary preferences towards healthier alternatives.
• Soya Bean Crude Oil (HSN Code: 15071000): Similarly, soya bean crude oil imports plummeted by 43.23% annually but showed a 17.47% recovery in the early months of 2024-25. This trend might reflect changes in global supply chains or fluctuations in global oilseed markets.

Key Trends and Observations:

1. Energy Dependence with Signs of Transition: While petroleum crude remains a dominant import, the declining trend suggests India is gradually diversifying its energy sources. The increase in the import of LNG and other alternative fuels indicates a shift towards cleaner energy.
2. Rising Demand for Technology: The substantial growth in imports of digital integrated circuits and other high-tech components underscores India's growing role in the global tech supply chain. This trend will likely continue as India expands its manufacturing capabilities in electronics and related sectors.
3. Fluctuations in Precious Metals: The contrasting trends in gold and diamond imports highlight the volatility in the precious metals market. While gold imports surged, diamond imports declined, suggesting shifting consumer preferences and market dynamics.
4. Agricultural Import Volatility: The significant declines in palm oil and soya bean oil imports may reflect broader trends in global agriculture, including supply chain disruptions, changes in consumer behaviour, or increased domestic production.

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Factors Influencing Trade of These HSN Codes

1. Economic Demand and Supply

Ever wondered why certain products dominate India's import and export landscape? It’s all about economic demand and supply. 

When the global market for goods like HSN code 27090010 (Petroleum Crude) or 85171300 (Smartphones) rises, so does trade. These HSN codes represent commodities that are essential to both consumers and industries. 

A spike in demand leads to increased imports or exports, while shifts in supply—like a new oil discovery or a technological breakthrough in electronics—can disrupt existing trade patterns.

2. Trade Policies and Agreements

Trade policies and international agreements significantly influence the movement of goods under various HSN codes. 

For instance, tariffs, trade barriers, and bilateral agreements can either boost or restrict the flow of products like 71081200 (Gold) or 27011920 (Steam Coal). India’s trade agreements with other nations often dictate which HSN classification codes see more activity. 

For example, favourable terms under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) can lead to increased exports of diamonds and gold, aligning with HSN codes 71023910 and 71081200. Staying informed about these policies is crucial for businesses looking to maximise their trade opportunities.

Also Read: Unpacking India's Foreign Trade Policy 2024: Impact and Opportunities

3. Technological Advancements

Imagine the rapid evolution of technology and how it influences trade. Advancements in digital technology drive the rise of HSN codes like 85423100 (Monolithic Integrated Circuits). As tech evolves, so does the demand for cutting-edge components, pushing these HSN codes to the forefront of trade. 

Moreover, technological improvements in logistics and supply chain management streamline the import and export processes, making it easier to trade complex goods like integrated circuits and aircraft (88024000). 

Businesses must stay updated on the latest tech trends to leverage these advancements for competitive advantage.

4. Global Market Trends

Global market trends are the invisible hand guiding goods trade under specific HSN codes. For example, when the world shifts towards renewable energy, there’s a corresponding rise in the trade of goods like HSN code 27111100 (Liquified Natural Gas) as countries seek cleaner energy sources. 

Similarly, economic trends like inflation or currency fluctuations can impact the trade volumes of essential commodities, including crude oil and gold. 

Observing these trends allows businesses to predict which HSN numbers will see increased activity and adjust their strategies to stay ahead.

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Also Read: Understanding the Latest Changes in India's Foreign Trade Policy

Challenges and Opportunities in Import and Export

1. Regulatory and Compliance Issues

Navigating global trade can be complex, particularly regarding regulatory and compliance issues. Each HSN code comes with specific rules that you must follow to ensure accurate GST compliance and avoid penalties.

This is where the challenge lies—changing regulations can be overwhelming. However, this challenge presents an opportunity: by staying ahead of these regulations, you can position your business as a reliable partner in the global supply chain. 

Investing in expert consultation and digital tools can help streamline these processes, turning compliance into a competitive advantage.

Also Read: Navigating GST on Export of Services: A Practical Guide for Indian Businesses

2. Export Facilitation and Incentives

Government-backed incentives can significantly boost your export business. Many countries, including India, offer programs that reduce financial and logistical burdens. 

You can tap into these incentives by understanding the specific HSN codes associated with your products. 

For example, products classified under certain HSN codes may qualify for export promotion schemes like the Merchandise Exports from India Scheme (MEIS), which offers duty drawbacks and tax exemptions.

Also Read: Import and Export Trade: Understanding its Impact and Strategies in India

3. Import Substitution Opportunities

Global disruptions have highlighted the importance of reducing dependency on foreign goods, making import substitution a viable strategy. 

Identifying which HSN codes represent heavily imported goods can help you explore opportunities to develop or source these products domestically. 

This strategy strengthens local industries and aligns with government initiatives focused on self-reliance.

4. Impact of Geopolitical Tensions

Geopolitical tensions can disrupt trade, impacting the flow of goods under specific HSN codes. Staying informed about global events is crucial if you trade-sensitive items like gold (HSN code 71081200) or liquified natural gas (HSN code 27111100). 

However, these challenges also present opportunities. Diversifying your supply chain or exploring alternative markets can mitigate risks and maintain business continuity.

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Also Read: How To Find Export Agents For Your Business

Strategic Measures for Top HSN Codes Trade Enhancement

When considering enhancing trade in India, particularly in light of emerging trends identified through HSN codes. 

The key is maintaining current strengths and identifying and exploiting new opportunities in global markets. Here are some strategic measures to consider:

1. Invest in High-Tech Manufacturing

• Strengthen partnerships between government and private sectors to build advanced manufacturing facilities.
• Leverage PLI schemes to enhance production and reduce reliance on imported high-tech components.
• Focus on training and upskilling the workforce to meet the demands of high-tech industries.

2. Diversify Export Markets

• Conduct market research to identify emerging markets with growing demand for your products.
• Establish trade agreements and partnerships in new regions to facilitate smoother market entry.
• Develop customised marketing strategies to cater to these new markets' needs and preferences.

3. Promote Sustainable Energy and Green Technologies

• Invest in R&D for renewable energy technologies to develop competitive products for global markets.
• Encourage collaboration between government, academia, and private companies to drive innovation in green technologies.
• Implement policies incentivising the production and export of sustainable energy products, such as tax breaks or subsidies.

4. Enhance Supply Chain Resilience

• Invest in modern logistics infrastructure to improve efficiency and reduce costs.
• Adopt digital technologies to enhance supply chain visibility and responsiveness.
• Establish contingency plans to mitigate risks associated with supply chain disruptions.

Also Read: Understanding and Reducing Logistics Costs: Types and Measurement Methods

5. Leverage Digital Trade Platforms

• Adopt digital trade platforms that offer comprehensive solutions for managing HSN codes, customs, and logistics.
• Train your staff on how to use these platforms effectively to maximise efficiency.
• Explore partnerships with fintech companies to integrate secure payment solutions into your digital trade processes.

Also Read: Logistics Management Software to Use in 2024

Import and Export of Top HSN Code Products with Pazago

If your business is focused on importing and exporting high-demand products associated with top HSN codes, then choosing the right trade management platform is crucial for ensuring efficiency, accuracy, and scalability. 

Pazago stands out as the ideal solution for managing the complexities of global trade,

As a cutting-edge EXIM trade management platform, Pazago simplifies every aspect of importing and exporting. With Pazago, you gain the efficiency and control needed to scale your business globally with confidence.

Key Features and Services of Pazago: 

• Track Your Shipments in One Place: Monitor all your shipments from over 180 shipping companies worldwide within a single, easy-to-use platform.
• Get Instant Alerts: Stay informed with real-time notifications about any delays or issues, so you can act quickly to keep things on track.
• Easy Document Handling: Manage all your trade documents in one place, keeping everything organised and accessible when needed.
• Simplified Payments: Handle international payments smoothly with competitive rates and quick currency transfers, ensuring your financial transactions are hassle-free.
• Reliable Shipping Partners: Work with top shipping companies to ensure that your products are delivered safely and on time every time.
• Quick Customs Clearance: Speed up customs processes with digital clearance, reducing paperwork and getting your products through faster.
• Secure Insurance: Protect your shipments with easy-to-manage, fully digital insurance options so that you can focus on your business with peace of mind.

Why Choose Pazago

Don’t let the complexity of HSN codes slow down your import and export processes. With Pazago, you can import and export top HSN codes with ease, ensuring your goods are correctly classified and your shipments are cleared quickly and efficiently. 

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Conclusion

Understanding and using key HSN codes is crucial for the future of India's trade. To position your business for growth, focus on high-tech manufacturing, expanding export markets, and promoting green technologies. The top HSN codes drive significant economic value and show the changing dynamics of global trade. 

As India continues to expand its role in technology, energy, and luxury goods, it's important to stay ahead of these trends. 

Adopting the right strategies will help you navigate international trade complexities and take advantage of emerging opportunities, ensuring long-term success in a competitive global market.

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