Comprehensive Guide to Ghee HS Code 0405

TL;DR

• The HS code for ghee is typically “0405,” which covers dairy products, including clarified butter.
• Correct HS code classification ensures smooth customs clearance and accurate tariff calculations for ghee.
• Ghee’s HS code may vary based on packaging, processing, and whether it’s sold as food or used for other purposes.
• Understanding the right HS code helps businesses avoid customs delays and penalties during import/export.
• Ghee falls under the broader category of dairy products, and specific country regulations may apply to its import/export.

What is HS Code 0405?

Ghee, a clarified butter commonly used in South Asian cuisine, plays a vital role in global trade, especially within food export markets. The general HS Code for dairy products like Ghee falls under 0405, which is specifically for “Butter and other fats and oils derived from milk.” 

This detailed classification is crucial for smooth customs processing, accurate tariff calculations, and adherence to international trade regulations. Ghee HSN Code Tool helps businesses efficiently manage export data, ensuring compliance and optimizing trade opportunities on a global scale.

Key Industries Using these Goods

HS Code 0405, which covers butter, ghee, and other dairy-based fats and oils, plays a crucial role in various industries worldwide. These products are not only fundamental to food processing but also have significant applications in pharmaceuticals, cosmetics, and industrial sectors. Below are the key industries that actively use products classified under this HS Code.

• Food & Beverage Industry: Butter and ghee are widely used in baking, confectionery, and traditional cuisines across different cultures. Processed foods, including ready-to-eat meals, heavily rely on butter oil and dairy spreads to enhance flavor, texture, and shelf life. Additionally, the increasing demand for natural and organic food products has boosted the global trade of pure butter and ghee.
• Pharmaceutical & Nutraceutical Industry: In pharmaceuticals, especially in Ayurvedic medicine, ghee plays a vital role as a carrier for medicinal formulations. It enhances the bioavailability of fat-soluble vitamins and active compounds in herbal remedies. 
• Cosmetics & Personal Care Industry: The personal care and cosmetics industry utilizes dairy fats for their moisturizing and nourishing properties. Ghee and butter derivatives are common in skincare products such as creams, lotions, and lip balms due to their ability to hydrate and soften the skin. The demand for natural and chemical-free beauty products has further driven the use of dairy-based fats in this sector.
• Industrial & Chemical Industry: Beyond food and cosmetics, dairy fats find applications in specialized industrial processes. Butter oil and other milk-derived fats are used in the production of lubricants, emulsifiers, and coatings for food packaging. Their natural properties make them a preferred alternative in industries looking for sustainable and biodegradable ingredients in their formulations.

The widespread use of products under HS Code 0405 highlights their importance in global trade. From traditional food applications to emerging uses in pharmaceuticals and cosmetics, dairy-based fats continue to be a key commodity in multiple industries worldwide.

Quick Reference Table for Export

What Goods are Covered Under HS Code 0405?

HS Code 0405 falls under the category of “Butter and Other Fats and Oils Derived from Milk.” It includes a range of dairy-based fats and oils used for cooking, food processing, and industrial applications. These products are crucial in international trade, as they are widely exported for culinary, medicinal, and commercial purposes. Below are the key subcategories classified under this HS Code, each with specific extensions:

HS Code 0405.10: Butter

This subcategory includes natural butter made from cow, buffalo, or other milk, used for cooking, baking, and direct consumption.

HS Code 0405.20: Dairy Spreads

Covers spreadable dairy fats with a high milk fat content, used as alternatives to traditional butter.

HS Code 0405.90: Other Fats and Oils Derived from Milk

This includes various milk-based oils and fats (other than butter or dairy spreads)

• HS Code 0405902020: Anhydrous milk fat– A highly refined milk fat made from cow or buffalo milk, widely used in South Asian and Middle Eastern cuisines, Ayurveda, and religious offerings.
• HS Code 04059010: (other than butter or dairy spreads) – A purified fat and oils derived from milk, commonly used in processed foods and confectionery.

These classifications help exporters and importers determine tariff rates, trade compliance, and documentation requirements, ensuring smooth global transactions.

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Quick Reference Table for Export

Trade and Market Statistics

The global trade of dairy-based fats under HS Code 0405, including ghee and butter, has seen consistent growth due to rising consumer demand and expanding export markets. Countries with strong dairy production capabilities play a crucial role in the international supply chain, exporting ghee to regions with high consumption, such as the Middle East, North America, and Southeast Asia. 

Trade regulations, tariff structures, and free trade agreements influence the movement of these products across borders. With the increasing demand for organic and premium dairy products, the market for ghee exports continues to expand globally.

Top Exporter of Ghee

India is the largest exporter of ghee, driven by its strong dairy industry and cultural significance of ghee in food and Ayurveda. Other major exporters include New Zealand, the Netherlands, and Germany, catering to global demand for high-quality dairy fats. Let’s look at the market share and total shipments.

Key Summary: 

• India is the largest exporter of ghee, accounting for 83% of global exports with 58,497 shipments.
• Pakistan ranks second with 2,449 shipments, holding a 3% market share.
• Malaysia is the third-largest exporter, contributing 1,901 shipments (3% market share).
• Major importers of Indian ghee include the United Arab Emirates, Singapore, and the United States.
• The UAE is the top importer, receiving approximately 25% of India’s ghee exports.

Top Importer of Ghee

Countries with high dairy consumption but limited domestic production, such as the United Arab Emirates, Qatar and Saudi Arabia, are among the top importers of ghee. The demand is driven by culinary preferences, the growing popularity of Ayurveda, and the rising health-conscious consumer base. Many importers rely on India for premium-quality ghee to meet their market needs.

Key Summary: 

• The United Arab Emirates is the leading importer of ghee, with 4,563 shipments.
• Qatar follows as the second-largest importer, with 1,236 shipments.
• Saudi Arabia ranks third, importing 1,177 shipments of ghee.
• Other notable importers include Italy, China, Belgium, and France, which are significant players in the global ghee import market.
• The average import price for ghee stood at $6,670 per ton in 2024, reflecting a 6.4% increase from the previous year.

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FAQs

1. What is HS Code 0405 and what products does it include?

A: HS Code 0405 refers to butter and other fats and oils derived from milk, including ghee. This code covers both clarified butter and anhydrous milk fat commonly used in food processing and retail packaging.

2. Are there import restrictions or certifications required for ghee?

A: Yes. Many countries require health certificates, sanitary permits, and compliance with food safety standards such as FSSAI (India), USDA (USA), or EU food laws. Ghee must be processed and packaged under hygienic conditions.

3. What kind of packaging is ideal for exporting products under HS Code 0405 internationally?

A: These products should be exported in airtight, food-grade containers, with proper labelling of ingredients, batch numbers, net weight, shelf life, and manufacturing/expiry dates. Packaging should meet the importing country’s food safety standards.

4. What are the benefits of using Intoglo for ghee exporters?

A: Intoglo handles pickup, customs clearance, freight, and last-mile delivery, making ghee exports effortless. With real-time tracking, direct US trucking, and AI-powered classification tools, exporters get speed, accuracy, and peace of mind—from India to the USA.

5. How do I know if ghee requires special documentation for specific countries?

A: Import requirements differ by destination. Always check with the destination country’s food authority or customs office. You can also consult with a logistics provider like Intoglo, who can guide you through country-specific documentation needs.