A Bonded Warehouse (BWH) is a Customs-licensed storage facility where imported or export-bound goods can be stored under Customs control without immediate payment of duty or taxes. It allows traders to defer duties, manage inventory efficiently, and complete regulatory compliances before final clearance. Bonded warehouses play a crucial role in facilitating international trade by reducing working capital pressure and improving supply chain flexibility.
How Can a Merchant Exporter Use a Bonded Warehouse?
As a merchant exporter, you typically:
- Source goods from multiple manufacturers
- Do not have factory premises
- Need time for aggregation, packing, inspection, and compliance
Note: Manufacturing is NOT allowed, only handling & packing.
A bonded warehouse legally becomes your temporary “export base” under Customs control.
A merchant exporter can:
- Store export goods under Customs bond
- Aggregate goods from multiple suppliers
- Do packing, repacking, labeling
- Get Export Inspection / Health / Plant Quarantine
- Stuff containers (warehouse stuffing)
- Self-seal (if eligible) or Customs seal
- Export without paying any duty
How to use Bonded Warehouse – Step-by-by process
How can a Merchant Exporter use the bonded warehouse. Here we give a step by step process of usage of a bonded warehouse
- Get a CFS or ICD attached Customs-Bonded Warehouse
- Procure Goods from the Indian Supplier (with necessary bills)
- Move the goods to Bonded Warehouse
- Warehouse Operator will execute the bond with Customs
- Operations inside bonded warehouse. You can now:
- Sort & aggregate
- Pack / repack
- Label with buyer details
- Palletize & barcode
- Call Export Inspection / Health Inspector if required
All activities are recorded & permitted by Customs.
6. Shipping Bill Filing
- File Export Shipping Bill
- Mention Warehouse Code
- Declare Warehouse Stuffing
7. Customs Examination – Customs opens cartons inside the BWH.
8. Stuffing Container and Sealing (inside the warehouse)
9 Let Export Order (LEO)
- After compliance → LEO issued
- Container moves to port / ICD / vessel
For a merchant exporter, a bonded warehouse acts as a Customs-approved export factory without owning a factory.