Quick Answer: Importing a handmade rug into Canada involves duty rates that vary by construction type. Hand-knotted wool rugs (HS code 5701.10.90) are subject to a 6.5% duty rate, while flatweave and other woven-pile rugs (HS code 5702) incur a 12.5% duty. These rates are under Canada's standard tariff, with no additional reciprocal tariffs.
Understanding these costs upfront can prevent unexpected charges. This guide explains the actual duty structure for rugs shipped into Canada, directly referencing Canada's customs tariff.
Duty by Construction Type
The duty rate for a rug imported into Canada depends significantly on its construction. This is a crucial detail to know before you fall in love with a specific piece, as it can genuinely change the total landed cost.
| Rug Construction | HS Code | Duty Rate |
|---|---|---|
| Hand-knotted wool | 5701.10.90 | 6.5% |
| Flatweave / other woven pile | 5702 | 12.5% |
For example, a hand-knotted rug and a flatweave kilim of similar size and price point will land at different total costs once the respective duty is applied.
DDP vs. DDU: Understanding Your Final Cost
While knowing the duty rate is important, the most practical question is whether the price you're quoted already includes all import costs. This depends on whether the seller uses DDP or DDU shipping terms:
- DDP (Delivered Duty Paid): This means all duty and brokerage fees are built into the price you see at checkout. You pay nothing extra upon delivery.
- DDU (Delivered Duty Unpaid): With DDU, duty and often a separate brokerage handling fee are billed to you separately when the rug arrives. This can sometimes happen weeks after you've already paid for the rug itself.
Always ask any seller directly which model they use before you buy. A transparent seller will answer this plainly, helping you avoid unexpected charges.
Why Duty Rates Could Change
Canada and India are currently negotiating a Comprehensive Economic Partnership Agreement (CEPA), with a goal of reaching US$50 billion in bilateral trade by 2030. If this agreement is finalized, duty on goods like handmade rugs would likely trend towards zero over time. This is worth considering if you're weighing whether to buy now or wait, though there is no confirmed timeline yet.
How This Compares to Buying from the US
The United States currently applies an additional reciprocal tariff layer on top of standard duty for goods from India, and this added rate has changed multiple times within a single year. Canada's flat, unstacked duty structure offers a comparatively simpler and more predictable number to plan around.
Frequently Asked Questions
How much import duty applies to a rug shipped from India to Canada?
For hand-knotted wool rugs (HS 5701.10.90), the duty is 6.5%. For flatweave and other woven-pile constructions (HS 5702), the duty is 12.5%. These rates are under Canada's standard Most Favoured Nation (MFN) tariff.
What's the difference between DDP and DDU when buying a rug online?
DDP (Delivered Duty Paid) means the duty is already included in the price you pay at checkout. DDU (Delivered Duty Unpaid) means you will be billed separately for duty and potentially a brokerage fee when the rug arrives. It's always advisable to confirm which applies before placing an order.
Will the Canada-India CEPA reduce rug import costs?
If the Canada-India Comprehensive Economic Partnership Agreement (CEPA) is finalized, duty on goods such as handmade rugs would likely decrease over time, potentially reaching zero. However, there is no confirmed date for the agreement's completion.
Do I have to pay customs separately when a rug ships to Canada?
You only have to pay customs separately if the seller ships using DDU (Delivered Duty Unpaid) terms. Always ask the seller before ordering to understand their shipping terms; a transparent seller will provide a clear answer.
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About Monolith & Heart: We make rugs by hand in Jaipur, India, working directly with weaving artisans in and around the city. Read our story.