Export of Human Hair from India[under HS Code 05010010 and HS Code 05010020 of the Indian Tariff Act, 1975].

[YAGAY andSUN]

Human hair export from India is a significant industry, with the country being one of the largest exporters of human hair worldwide. These exports fall under specific HS codes, which categorize goods for international trade and customs purposes. In India, HS Code 05010010 and HS Code 05010020 are the relevant codes for the export of human hair.

HS Code 05010010: Human Hair (Unworked, Not Dyed)

This code is used for the export of unworked human hair that has not been dyed, bleached, or processed in any way. This could be in its natural form or may have been collected from religious places, temples, or other sources.

Unworked hair refers to hair that is in its natural state and has not undergone any cosmetic treatments like coloring, bleaching, or other chemical processing.

Exports Under HS Code 05010010:

• This category includes raw human hair and hair that has not undergone any chemical treatment.
• Indian exports under this code often go to countries where they are further processed and used for wigs, hair extensions, or other products.
• Popular destinations include countries in Asia, Europe, and the Middle East.

HS Code 05010020: Human Hair (Worked, Dyed, or Bleached)

This code applies to human hair that has been worked, dyed, or bleached. Such hair has undergone processing, making it suitable for the production of wigs, hairpieces, extensions, or other cosmetic products.

Exports Under HS Code 05010020:

• This category includes processed human hair—hair that has been dyed, bleached, or otherwise chemically treated to meet the specifications of buyers in global markets.
• The processed hair is commonly used in the beauty and fashion industries for making wigs, hair extensions, and various styling products.
• Countries like the USA, China, South Korea, and European nations are prominent importers of worked and processed human hair from India.

Export Policy: The Export Policy of raw Human hair is amended from 'Restricted' to "Prohibited'. However, export shall be 'Free' if FOB value is US Dollar 65 or above per Kilogram.

[DGFT Notification No. 59/2024-25 dtd. 10^th February, 2025]

Regulations and Export Procedures:

1. Product Classification:
   • The correct classification under HS Code 05010010 (for raw or unworked hair) or HS Code 05010020 (for processed or worked hair) must be accurately done to ensure proper tariffs and compliance with international standards.
2. Export of Human Hair from Temples (Religious Hair):
   • In India, human hair often comes from temples where devotees donate hair as part of religious offerings (known as "tonsuring"). This is a major source for the export of raw human hair.
   • The Government of India regulates the export of temple hair, and exporters must follow specific guidelines and processes for sourcing and exporting hair from these locations.
3. GST and Taxation on Exports:
   • Exports of human hair are generally zero-rated under GST (Goods and Services Tax) in India, meaning that exports are not subject to GST, and exporters can claim refunds for input taxes paid during procurement.
4. Quality Control & Certification:
   • Exporters of human hair, especially processed hair, often need to ensure that their products meet the quality standards of the importing countries. Certification and product quality are critical for maintaining international market access.
5. Export Authorization/Prohibition: Policy is prohibited w.e.f. 10-02-2025. However, Export shall be Free IF FOB value is USD 65 or above per Kilogram.

Global Market for Human Hair Exports from India:

India is the leading exporter of human hair globally. The country's human hair industry has grown significantly due to its large temple donations and widespread use of hair for wigs and extensions. Key export markets include:

• USA: A major importer, especially for processed hair used in beauty and fashion industries.
• China: Another large market for raw hair for further processing.
• Middle East: Countries like the UAE, Saudi Arabia, and Turkey import significant quantities of both raw and processed hair.
• European Union: Several countries in the EU also import processed human hair products.

Role of Authorized Dealer (AD):

• Banks and Financial Institutions (Authorized Dealers) play a significant role in facilitating the payment process for human hair exports. They assist with foreign exchange transactions, ensuring that exporters receive payment in foreign currency, and provide necessary documentation for customs and clearance purposes.

Governing Body for Export of Human Hair in India:

1. Directorate General of Foreign Trade (DGFT):
   • The DGFT is the primary body that governs India’s international trade policies and regulates the export of goods, including human hair. They issue the Export Import (EXIM) Policy, which provides guidelines for exporting goods from India.
   • DGFT ensures that the export procedures are followed, and exporters comply with all necessary legal and regulatory requirements.
   • The Foreign Trade Policy (FTP) also outlines various measures to promote exports, including the export of human hair.
2. Customs Department:
   • The Indian Customs Department plays an essential role in overseeing the export of human hair. They ensure that shipments of human hair adhere to international trade regulations, correct HS codes are used, and any duties or taxes are paid as per the requirements.
   • The Customs Department is responsible for clearance at ports and ensuring that the export is compliant with all applicable laws and procedures.
3. Ministry of Commerce and Industry:
   • The Ministry of Commerce and Industry oversees and facilitates the development of international trade policies, including those relating to the export of human hair. It works in coordination with DGFT, Customs, and other agencies to ensure smooth trade.
4. Export Promotion Councils (EPCs):
   • The Export Promotion Council for Handicrafts (EPCH) and other trade promotion bodies might assist exporters of human hair, as the sector is closely related to the cosmetic and handicraft industries. These councils provide guidance, support, and facilitate participation in international trade fairs.

Government Initiatives for Human Hair Exports:

1. Foreign Trade Policy (FTP) – Incentives for Exporters:
   • The Foreign Trade Policy (FTP) of India outlines various schemes that promote the export of goods, including human hair. Under the FTP, exporters can access a range of benefits aimed at boosting the export sector.
   • One such initiative is the RODTEP, which provides incentives to exporters for promoting the export of specific products, including human hair.
2. National Export Insurance Account (NEIA):
   • The NEIA provides insurance cover for export transactions, which helps mitigate risks for exporters of human hair who may face payment delays or defaults from international buyers.
   • This initiative encourages risk-averse entrepreneurs to engage in the export of human hair, making it easier for businesses to explore international markets.
3. Export Promotion and Marketing Initiatives:
   • The Indian government, through agencies like the DGFT, has established promotional programs to market Indian products abroad. Human hair exports, especially processed hair, are part of these promotional activities, helping exporters gain visibility in international markets.
   • Trade fairs and exhibitions related to wigs, hairpieces, and beauty products often showcase Indian human hair products to potential buyers.
4. Ease of Doing Business:
   • The Make in India and Ease of Doing Business initiatives have significantly improved trade facilitation in India, including reducing red tape, streamlining clearance processes at ports, and offering digital platforms for faster customs processing.
   • These measures help human hair exporters by reducing bureaucracy and improving overall operational efficiency.

Export Incentives for Human Hair Exporters:

1. RODTEP
   • RODTEP offers incentives to exporters of human hair and other goods. It provides duty credit scrips to exporters, which can be used to pay customs duties or be sold in the market for cash.
   • This incentive is aimed at promoting the export of products from India, including human hair, and making them more competitive in global markets.
2. Export Credit from Banks:
   • The Export-Import Bank of India (EXIM Bank) offers financial support to exporters, including those in the human hair industry. Exporters can avail themselves of credit facilities, financial products, and assistance in securing funds for the expansion of their business.
   • Export Credit Guarantee Corporation (ECGC) offers credit insurance to human hair exporters, ensuring protection against default by foreign buyers.
3. Duty Drawback Schemes:
   • Under the Duty Drawback Scheme, exporters can claim a refund of customs duties paid on raw materials used in the production of human hair products, such as wigs and extensions.
   • This helps reduce the overall cost of production and increases the competitiveness of Indian human hair in international markets.
4. Interest Subsidy Scheme:
   • The government offers interest subsidies under the Interest Equalization Scheme to exporters in certain sectors, including those involved in the export of human hair. This scheme allows exporters to avail themselves of reduced interest rates on loans taken for export-related activities.

Export Performance of Human Hair from India:

India has emerged as a global leader in the export of human hair, particularly to markets in the United States, China, Europe, and the Middle East. India accounts for a significant portion of the world’s human hair exports, particularly in raw (unprocessed) and processed (dyed and bleached) forms.

1. Export Volume & Value:
   • According to reports from the Export Promotion Council for Handicrafts (EPCH) and other trade organizations, India is the largest exporter of raw human hair, especially from the temple donation system.
   • India’s human hair exports have increased substantially due to the growing global demand for hair extensions, wigs, and beauty products. The demand is particularly strong in markets such as the USA (where human hair is used for wigs and extensions) and China (which processes and resells the hair).
2. Major Export Markets:
   • USA: The USA is a leading importer of processed hair used for wigs, hairpieces, and other beauty products.
   • China: A large portion of unprocessed human hair is exported to China for further processing.
   • Middle East: Countries like Saudi Arabia, UAE, and Turkey are key buyers of both raw and processed hair.
3. Government Support and Export Performance:
   • Government initiatives like, Export Credit Insurance, and the development of infrastructure (e.g., dedicated export zones and logistics) have further boosted the export performance of human hair from India.
   • India’s Export Performance in the human hair industry has seen growth due to the increasing demand for hair in the cosmetic and fashion industries, particularly for high-quality hair extensions and wigs.

Summary:

• India's human hair export sector is flourishing, thanks to various government initiatives, export incentives, and a streamlined regulatory framework. The DGFT, Customs Department, and other governing bodies have facilitated the export process, enabling the industry to expand its reach to global markets. The support provided through incentives like MEIS, credit insurance, and duty drawbacks has contributed significantly to the sector's growth. With India being a major player in the global human hair market, this industry is poised for continued growth and greater success in the years to come.
• The export of human hair under HS Code 05010010 (unworked hair) and HS Code 05010020 (worked hair) from India plays an important role in the country's export economy. The industry benefits from a combination of religious donations, a large domestic supply, and a well-established market for wigs and hairpieces worldwide. While the export procedures are relatively straightforward, attention must be paid to ensuring compliance with DGFT regulations, Customs clearance procedures, and international trade agreements. The ongoing global demand for human hair products suggests a promising future for India's human hair export sector.

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Annexure –I

RODTEP Incentive – DTA Export

Appendix 4R - RoDTEP Schedule for DTA Exports w.e.f. 10.10.2024 Notified vide Notification No. 32 Dated 30.09.2024
RoDTEP	Tariff Item	Description of Goods (As per CTH )	UQC	Rate as % age of	Cap (Rs. Per UQC
Entry				FOB (#)	UQC)
`(1)	`(2)	`(3)	`(4)	`(5)	`(6)
358	5010010	Human hair, unworked, whether or not washed or scoured	Kg	0.50%
359	5010020	Waste of human hair	Kg	0.50%

Annexure – 2

AIR Duty Drawback

Tariff Item	Description of goods	Unit	Drawback Rate	Drawback cap per unit in Rs. (₹)
(1)	(2)	(3)	(4)	(5)
0501	Human hair, unworked, whether or not washed or scoured; waste of human hair	Kg	0.15%

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