India — Rules of Origin & FTAs

India's rules of origin regime operates on two statutory tiers: non-preferential origin (for applying most-favoured-nation (MFN) rates, trade-remedy measures, and marking requirements) and preferential origin (for reduced or zero tariffs under free trade agreements (FTAs) and other trade agreements). The foundational statutes are the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975).

## Administration

Central Board of Indirect Taxes and Customs (CBIC), an arm of the Ministry of Finance, administers customs law and enforces rules of origin at India's ports and inland customs stations. CBIC issues the customs notifications that prescribe preferential rates of duty and publishes the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR 2020), which govern verification and importer due-diligence obligations for all FTA claims.

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, administers the Foreign Trade Policy and the Handbook of Procedures. DGFT does not determine origin per se, but its IEC (Importer-Exporter Code) registration system and import-policy classification (free/restricted/prohibited by HS code) create the framework within which CBIC Customs assesses duty and enforces origin rules.

## Non-preferential rules of origin

For goods imported under MFN treatment or subject to anti-dumping, countervailing, or safeguard duties, India applies non-preferential rules of origin. These rules determine the country of origin for purposes of trade-remedy measures, quota administration, government-procurement origin requirements, and marking. The Customs Tariff Act, 1975 empowers the Central Government to make such rules, but a single codified set of non-preferential origin rules applicable to all goods has not been notified as of May 29, 2026. Instead, CBIC Customs applies the principles laid down in the WTO Agreement on Rules of Origin (in force for India since January 1, 1995) and ad-hoc criteria published in trade-remedy investigation reports and CBIC circulars.

Unable to confirm as of 2026-05-29 whether India has notified comprehensive non-preferential rules of origin under Section 5 of the Customs Tariff Act, 1975 that replace the gap-filling reliance on WTO principles.

## Preferential rules of origin under trade agreements

India's preferential origin framework is detailed and agreement-specific. Section 5 of the Customs Tariff Act, 1975 authorises the Central Government to notify rules of origin "for the purposes of any agreement or other arrangement with any country or territory … for according preferential treatment to goods imported from such country or territory." Each FTA or preferential trade agreement (PTA) has bespoke rules notified in the Official Gazette. Examples include:

• India–Sri Lanka FTA (notified 2000, updated periodically)
• India–ASEAN Trade in Goods Agreement (AITIGA, notified 2009)
• India–Korea Comprehensive Economic Partnership Agreement (CEPA, notified 2009)
• South Asian Free Trade Area (SAFTA, under the SAARC framework)
• Duty Free Tariff Preference (DFTP) Scheme for Least Developed Countries (notified 2015, expanded 2014 to cover ~98.2% of India's tariff lines)

Preferential rates themselves are notified under Section 25 of the Customs Act, 1962, referencing the specific agreement.

## CAROTAR 2020: the due-diligence and verification framework

On September 21, 2020, CBIC brought into force the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR 2020, Notification No. 81/2020-Customs (N.T.) dated August 21, 2020). CAROTAR 2020 was enacted following the insertion of Chapter VAA (Section 28DA) into the Customs Act, 1962 by the Finance Act, 2020. This legislative change responded to concerns that FTA imports were rising sharply and that undue claims of preferential treatment were harming domestic industry.

Key obligations under CAROTAR 2020

Rule 3 requires every importer claiming a preferential rate to:

1. Declare in the Bill of Entry that the goods qualify as originating.
2. Indicate the tariff notification granting the preference.
3. Produce a valid certificate of origin (CoO) covering each item.
4. Enter CoO details (issuing authority, reference number, date) in the Bill of Entry.

Rule 4 imposes a due-diligence obligation: the importer must possess information (in the format of Form I annexed to CAROTAR 2020) demonstrating how the goods satisfy the origin criteria—regional value content, product-specific rules (PSRs), change-in-tariff-classification tests—and must retain all supporting documents for at least five years from the date of filing the Bill of Entry. Customs may request this information at any time; the importer must "exercise reasonable care to ensure the accuracy and truthfulness" of the information.

Rule 5 permits Customs to requisition origin-related information from the importer (with 10 days to respond). If the importer fails to provide the information or if Customs has reason to believe the origin criteria are not met, Customs may initiate verification with the Verification Authority (the designated agency in the exporting country). Preferential treatment may be suspended pending verification, though Customs may provisionally clear the goods against security equal to the duty differential.

Rule 7 allows the Principal Commissioner or Commissioner of Customs to reject other claims for identical goods from the same exporter or producer without further verification, once it is determined that a particular shipment did not meet origin criteria. Preferential treatment is restored prospectively only after the importer or exporter demonstrates that manufacturing conditions have been modified.

CAROTAR 2020 applies to all imports claiming preferential duty under any trade agreement to which India is a party. It does not replace the agreement-specific origin rules (those remain in force and define what qualifies as originating); instead, it standardises the procedural framework for claiming, verifying, and denying preferential treatment.

Source: Customs Act, 1962 (March 30, 2022 version) Source: Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 Source: CAROTAR 2020 presentation (Bangalore Customs)

India's preferential trade agreements impose substantive origin tests on goods claiming preferential duty treatment. These tests vary by agreement, but most India FTAs—including the India-ASEAN Free Trade Agreement (AITIGA), the India-Korea Comprehensive Economic Partnership Agreement (CEPA), and the South Asian Free Trade Area (SAFTA)—deploy a combination of regional value content (RVC) thresholds, change-in-tariff-classification (CTC) rules, and product-specific rules (PSRs) to determine whether a good qualifies as originating.

## Alternative origin tests: RVC or CTC

Under AITIGA (in force January 1, 2010), a good qualifies as originating if it satisfies either of two tests:

1. Regional value content of at least 35 percent, calculated on a FOB basis using the direct or indirect method (the exporting Party must declare which method it applies and notify changes at least six months in advance); or
2. Change in tariff classification at the HS four-digit heading level, meaning that all non-originating materials used in production have undergone a change to a different four-digit heading in the Harmonized System from the heading of the finished good.

The 35 percent RVC threshold applies across most goods in AITIGA. The agreement defines AIFTA content (the originating portion) as the proportion of the FOB price attributable to originating materials (including materials originating in India or any ASEAN Member State) plus the direct cost of processing performed in the exporting Party. India and each ASEAN Party must adhere to one calculation method—direct (summing the value of originating materials and processing costs, then dividing by FOB) or indirect (starting with FOB price, subtracting the CIF value of non-originating materials, and dividing by FOB)—to promote transparency and consistency.

## Product-specific rules

Many India FTAs overlay product-specific rules (PSRs) that specify tailored tests for particular HS headings or chapters. AITIGA Annex 2 Appendix B contains PSRs for textiles, apparel, chemicals, and other sensitive sectors. For example:

• Textiles (Chapters 50–63): PSRs often require that yarns be produced in an AITIGA Party (a "yarn-forward" rule) or that fabrics undergo dyeing, printing, or finishing operations in the exporting Party, in addition to the CTC or RVC alternative test.
• Chemicals and plastics (Chapters 28–39): Many headings specify that non-originating materials must shift from a different HS chapter (a chapter change) rather than merely a heading change, tightening the CTC test.
• Machinery and electronics (Chapters 84–85): Some PSRs require assembly operations that confer essential character, or impose higher RVC thresholds (40 or 45 percent) for specified tariff lines.

When a PSR applies, the importer must satisfy both the general origin criterion (35% RVC or CTC at the heading level) and the PSR. If the PSR specifies a higher RVC threshold or a more stringent CTC test, that stricter standard governs.

## Cumulation and wholly obtained goods

AITIGA and other India FTAs permit cumulation: materials originating in any Party to the agreement count as originating materials when used in production in another Party. For example, Indian steel exported to Thailand and incorporated into a Thai machine qualifies the steel portion as "originating" when the machine is exported to India under AITIGA preferences, provided the machine itself meets the applicable origin test.

Goods wholly obtained in a single Party—agricultural products harvested, minerals extracted, live animals born and raised, fish caught in territorial waters or the EEZ, or goods manufactured exclusively from such inputs—qualify as originating without reference to RVC or CTC tests.

## De minimis tolerance

AITIGA incorporates a de minimis rule: non-originating materials that do not satisfy the CTC requirement are nonetheless disregarded if their aggregate value does not exceed 10 percent of the FOB price of the finished good. This tolerance does not apply to goods in HS Chapters 50–63 (textiles and apparel), where stricter fiber-forward or yarn-forward rules apply and the de minimis threshold may be lower or absent under the PSR.

## Calculation basis and operational points

For RVC calculation, the FOB price of the exported good is the denominator. Freight, insurance, and other post-export costs are excluded. The numerator under the direct method sums the CIF value of originating materials (including materials originating in any AITIGA Party) and the direct labor and overhead costs incurred in the territory of the exporting Party. Under the indirect method, the numerator is FOB price minus the CIF value of all non-originating materials.

Accessories, spare parts, and tools delivered with machinery or equipment and invoiced together are treated as part of the good; their originating or non-originating character is included in the RVC calculation or CTC analysis.

Packing materials and containers for retail sale (classified with the good under GRI 5 of the Harmonized System) are included in the origin determination. Shipping containers and transport packing are excluded.

## Verification and importer obligations under CAROTAR 2020

Even when a good qualifies under these substantive tests, the importer must comply with CAROTAR 2020 (Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020) procedural requirements: produce a valid certificate of origin issued by the exporting Party's designated authority, declare the preference in the Bill of Entry, and retain documentation—including the RVC calculation worksheet (in Form I under CAROTAR 2020) and supplier declarations for originating materials—for at least five years. Customs may request this evidence at any time and may verify the origin claim with the exporting-country Verification Authority if documentation is insufficient or suspect.

Source: Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Co-operation between India and ASEAN, Annex 2 — Rules of Origin for the ASEAN-India Free Trade Area (AITIGA)

Every importer claiming preferential duty treatment under any India free trade agreement (FTA), preferential trade agreement (PTA), or comprehensive economic cooperation / partnership agreement (CECA / CEPA) must produce a valid certificate of origin (CoO) and enter CoO details in the Bill of Entry. These requirements are codified in Rule 3 of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR 2020), which applies to all FTA claims at every Indian port and inland customs station effective September 21, 2020.

## Mandatory obligations under CAROTAR 2020 Rule 3

Rule 3(1) imposes four procedural obligations on every importer claiming preferential treatment:

1. Declaration in the Bill of Entry that the goods qualify as originating goods for preferential duty treatment under the specific trade agreement.
2. Indication of the tariff notification against each item for which preferential duty is claimed. India's preferential rates are notified under Section 25 of the Customs Act, 1962, referencing the specific agreement; the importer must cite the notification number and date.
3. Production of a certificate of origin covering each item on which preferential duty is claimed. The CoO must be issued by the competent authority designated by the exporting country under the applicable FTA.
4. Entry of CoO details in the Bill of Entry, including the issuing authority name, certificate reference number, date of issue, and (where applicable under the FTA format) the product-specific origin criterion invoked.

Failure to satisfy any of these four elements permits Customs to deny the preferential claim and assess duty at the most-favoured-nation (MFN) rate or other applicable rate (safeguard, anti-dumping, or countervailing duty).

## Certificate of origin: issuing authorities

Each India FTA specifies the format of the CoO and designates the issuing authorities. On the Indian export side, the Directorate General of Foreign Trade (DGFT) has authorized the following agencies to issue preferential CoOs for Indian exports (as of January 6, 2023, per Appendix 2B to the DGFT Handbook of Procedures):

• Export Inspection Council of India (EIC) and its field organizations (Export Inspection Agencies, EIAs) — for all goods under all India FTAs.
• Marine Products Export Development Authority (MPEDA) — for marine products under most India FTAs (including AITIGA, India-Korea CEPA, SAFTA, and India-Mauritius CECPA).
• Textile Committee — for textiles and made-ups under select FTAs (including AITIGA, SAFTA, and India-Korea CEPA).
• Certain Export Promotion Councils (EPCs), the Tobacco Board, and Special Economic Zone (SEZ) authorities for sector-specific or zone-specific exports under older agreements.

On the import side, the Indian importer must produce a CoO issued by the exporting country's designated authority. The CoO format is prescribed in the operational certification procedures annex (or rules-of-origin annex) of the relevant FTA. For example, the India-ASEAN Free Trade Agreement (AITIGA) prescribes a CoO format in Annex 3 to the Agreement on Trade in Goods; the India-Korea CEPA, India-Japan CEPA, India-UAE CEPA, and India-Australia ECTA each have bespoke CoO formats.

As of January 17, 2025, Indian exporters applying for preferential CoOs were directed to use the eCoO 2.0 digital platform (www.trade.gov.in), which replaced the earlier coo.dgft.gov.in portal. The eCoO 2.0 system is designed to issue paperless electronic CoOs across all FTAs, PTAs, and issuing agencies.

## Grounds for immediate denial without verification

Rule 3(2) of CAROTAR 2020 permits the proper officer (Customs) to deny preferential treatment immediately, without initiating verification with the exporting country, if the CoO suffers from any of the following defects, and in all such cases the certificate is marked "INAPPLICABLE":

a) Incomplete or non-conforming format. The CoO is incomplete (missing mandatory fields such as exporter name and address, consignee name and address, description of goods, HS code, origin criterion, or authorized signatory signature and stamp) or is not in accordance with the format prescribed by the Rules of Origin for that FTA.

b) Alteration not authenticated. The CoO contains any alteration (strikethrough, overwriting, or correction) that has not been authenticated by the issuing authority. Most FTAs require that corrections be initialed or stamped by the issuing authority; unsigned alterations void the certificate.

c) Expired validity period. The CoO is produced after its validity period has expired. (Validity periods are FTA-specific and typically range from twelve months to the date of importation, depending on the agreement's operational certification procedures.)

d) Ineligible goods. The CoO is issued for an item that is not eligible for preferential tariff treatment under the trade agreement. Rule 3(2), Explanation clarifies that this ground includes cases where:

• the goods are not covered in the respective tariff notification (i.e., the item's HS code is excluded from India's preferential concession schedule for that FTA), or
• the product-specific rule stated in the CoO is not applicable to the goods (e.g., the CoO claims a regional value content origin for a textile item subject to a mandatory yarn-forward rule under the FTA's product-specific rules annex).

In each of these cases, MFN or other applicable duty is assessed. The importer has no right to demand verification with the exporting-country authority; the defect is patent on the face of the CoO or the tariff notification.

## Relationship to importer due-diligence and verification procedures

Even when a CoO is facially valid and produced within the validity period, Customs may still deny or suspend preferential treatment if:

• the importer fails to produce the origin-related information (in the format of Form I under CAROTAR 2020 Rule 4) demonstrating how the goods satisfy the regional value content threshold, change-in-tariff-classification test, or product-specific rules when requested by Customs under Rule 5, or
• Customs has reason to believe the origin criteria are not met and initiates verification under Rule 6 with the exporting country's Verification Authority.

The CoO is a necessary but not sufficient condition for preferential treatment. Under Rule 4, the importer must possess origin-related information (including supplier declarations, purchase orders, RVC calculation worksheets, and manufacturing process documentation) demonstrating how the origin criteria are satisfied, must retain all supporting documents for at least five years from the date of filing the Bill of Entry, and must exercise reasonable care to ensure the accuracy and truthfulness of the origin claim. Verification procedures and suspension of preferential treatment pending verification outcome are governed by CAROTAR 2020 Rules 5–7 and the respective FTA operational certification procedures.

Source: Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, Rule 3 Source: [Appendix 2B — List of Agencies Authorized to issue Certificate of Origin [Preferential] (as on January 6, 2023), DGFT](https://content.dgft.gov.in/Website/dgftprod/ad977111-207c-431a-a8cc-54c1754484c0/Appendix%202B%20(Certificate%20of%20Origin%20%5BPreferential%5D)%20as%20on%2006.01.2023.pdf) Source: Common Digital Platform for Issuance of Certificate of Origin, DGFT (migration to eCoO 2.0 effective January 17, 2025)

The India-ASEAN Trade in Goods Agreement (AITIGA)—signed August 13, 2009 in Bangkok and effective January 1, 2010—eliminates or reduces customs duties on most goods traded between India and the ten ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam). Tariff concessions are asymmetric and phased over multi-year implementation schedules that differ by Party and by product track.

India's tariff commitments to ASEAN and ASEAN Member States' commitments to India are set out in Annex 1 to the Trade in Goods Agreement (the "Schedule of Tariff Commitments"). Each Party maintains its own schedule, listing HS codes at the six-digit level and classifying them into one of four tracks:

1. Normal Track (Tracks 1 and 2) — tariff elimination by specified end-dates.
2. Sensitive Track — tariff reduction to floors of 4% or 5% by specified end-dates.
3. Special Products — limited concessions or tariff-rate quotas (TRQs) for designated agricultural goods.
4. Exclusion List — no preferential concessions; MFN rates apply.

## Normal Track: tariff elimination timelines

Normal Track 1 and 2 together are intended to cover approximately 80 percent of each Party's tariff lines. Goods on the Normal Track receive complete tariff elimination (0% duty) according to the following implementation schedules:

India's Normal Track commitments (for ASEAN imports):

• Normal Track 1 (approximately half of India's covered tariff lines): tariffs eliminated by December 31, 2013.
• Normal Track 2 (approximately one-quarter of India's covered tariff lines): tariffs eliminated by December 31, 2016.

According to India's Schedule of Tariff Commitments in Annex 1, India committed to zero tariffs on approximately 74–75 percent of its total tariff schedule applicable to ASEAN goods, with full implementation completed by the end of 2016.

ASEAN Member States' Normal Track commitments (for Indian exports):

ASEAN implementation timelines differentiate between ASEAN-6 (Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) and CLMV (Cambodia, Lao PDR, Myanmar, and Vietnam) to account for differing levels of development:

• ASEAN-6 (for Indian exports to ASEAN-6): Normal Track 1 tariffs eliminated by December 31, 2010; Normal Track 2 tariffs eliminated by December 31, 2013.
• CLMV (for Indian exports to CLMV): Normal Track 1 tariffs eliminated by December 31, 2013; Normal Track 2 tariffs eliminated by December 31, 2018.

As of January 1, 2019, Normal Track tariffs have been fully eliminated between India and all ASEAN Member States. Goods on the Normal Track therefore enter at zero duty provided the importer produces a valid Certificate of Origin Form AI and satisfies the origin criteria (35% regional value content or change in tariff subheading at the HS four-digit level, as set out in Annex 2 to the Agreement).

## Sensitive Track: tariff reduction to 4% or 5% floors

The Sensitive Track accounts for up to 10 percent of each Party's tariff lines and covers goods deemed sensitive to import competition. Tariff reductions on Sensitive Track items are slower and limited:

• Tariffs are reduced to 4% or 5% (depending on the Party and HS code) by specified end-dates.
• Tariffs are not eliminated; the floor rate remains in force unless a Party unilaterally accelerates its tariff reduction or the Parties agree through the AITIGA Joint Committee review process to transfer specific tariff lines from the Sensitive Track to the Normal Track.

India's Sensitive Track end-dates:

According to India's Schedule in Annex 1, Sensitive Track tariffs were to be reduced to 4% by specified end-dates differing by ASEAN Member State grouping. The latest implementation dates for India's Sensitive Track floor rates were December 31, 2019 (for ASEAN-6) and December 31, 2022 (for CLMV and the Philippines).

ASEAN Member States' Sensitive Track end-dates:

ASEAN-6 and CLMV Member States committed to reducing Sensitive Track tariffs to 5% by end-dates varying by Member State, with CLMV implementation extending to December 31, 2024 for certain tariff lines.

HS Chapters 84, 85, and 87 in the Sensitive Track

India placed a significant number of tariff lines from HS Chapters 84 (machinery and mechanical appliances), 85 (electrical machinery and equipment), and 87 (vehicles and parts thereof) in the Sensitive Track to protect domestic manufacturing capacity in those sectors. The product-specific details of India's Sensitive Track for these chapters are incorporated in Annex 1 to the Agreement.

## Special Products and Tariff-Rate Quotas (TRQs)

Certain agricultural products are classified as Special Products and receive limited preferential treatment. The most commercially significant example is palm oil (HS 1511):

• India grants tariff-rate quotas (TRQs) for crude palm oil and refined palm oil imported from Malaysia and Indonesia.
• In-quota volumes enter at preferential rates that have been phased down toward zero or near-zero levels by specified dates.
• Out-of-quota imports remain subject to higher tariff rates (MFN or other applied rates), effectively capping preferential access and limiting import surges.

The TRQ volumes, in-quota rates, and out-of-quota rates are set out in India's Schedule of Tariff Commitments (Annex 1 to AITIGA). Importers claiming TRQ treatment must present a valid Certificate of Origin Form AI, satisfy origin criteria, and comply with India's TRQ administration procedures (including quota allocation and licensing requirements administered by DGFT).

## Exclusion List: no preferential concessions

Up to 10 percent of each Party's tariff lines may be placed on the Exclusion List. Goods on the Exclusion List receive no tariff concessions under AITIGA; imports are assessed at the MFN rate (or other applicable rate—safeguard, anti-dumping, countervailing duty) regardless of whether the exporter presents a Certificate of Origin.

The AITIGA provides that Parties shall review the Exclusion Lists annually with a view to improving market access (Annex 1, General Notes), but transfer of tariff lines from the Exclusion List to a preferential track requires agreement among the Parties through the Joint Committee process.

India's Exclusion List includes sensitive agricultural and industrial products where import competition was deemed too disruptive to domestic production. Each ASEAN Member State maintains its own Exclusion List, with varying coverage.

## Verification of tariff track and applicable duty rate

To determine whether a specific HS code qualifies for preferential treatment and the applicable AITIGA rate:

1. Consult India's Schedule of Tariff Commitments (Annex 1 to AITIGA) for imports into India from ASEAN, or the exporting ASEAN Member State's schedule for exports from India to that Member State. Schedules are published by India's Export Inspection Council (EIC) and Department of Commerce.
2. Locate the six-digit HS code in the schedule and identify the tariff track (Normal Track 1 or 2, Sensitive Track, Special Products, or Exclusion List).
3. Check the implementation year to determine the current preferential rate. For goods still in transition (Sensitive Track items with end-dates in or after 2019), the schedule specifies the rate applicable in each calendar year through the end-date.
4. Verify origin qualification. Even if the HS code is on the Normal Track with a zero preferential rate, the importer must produce a valid Certificate of Origin Form AI and possess documentation (under CAROTAR 2020 Rule 4) demonstrating that the good satisfies the 35% regional value content threshold or the change-in-tariff-subheading test (or, where applicable, a product-specific rule in Annex 2 Appendix B to AITIGA).

India's CBIC Customs authorities enforce AITIGA preferential rates through tariff notifications issued under Section 25 of the Customs Act, 1962. Importers must cite the applicable tariff notification number in the Bill of Entry when claiming AITIGA preferential treatment.

## Ongoing AITIGA review

At the ASEAN-India Summit in November 2022, the Parties tasked the AITIGA Joint Committee to undertake a comprehensive review of the Agreement to address concerns about asymmetric benefits, underutilization of preferential rates by exporters, inverted duty structures (where tariffs on inputs exceed tariffs on finished goods), complex rules of origin, and non-tariff barriers. As of June 2026, negotiations on the review are ongoing. Any changes to tariff tracks, Exclusion Lists, or origin rules will be notified through amendments to Annex 1 and Annex 2 and will require domestic legislative enactment (in India's case, through updated CBIC tariff notifications under the Customs Act, 1962).

Source: Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Co-operation between India and ASEAN (AITIGA), Annex 1 — Schedules of Tariff Commitments Source: ASEAN-India Trade in Goods Agreement (Department of Commerce, Government of India)

The India-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) was signed on February 18, 2022 and entered into force on May 1, 2022, marking India's first deep free trade agreement in over a decade. The agreement covers trade in goods, rules of origin, trade in services, technical barriers to trade, sanitary and phytosanitary measures, customs procedures, and other areas of economic cooperation.

## Tariff commitments and coverage

Under CEPA, the UAE eliminates customs duties on 97.4% of its tariff lines (7,378 of 7,581 tariff lines), accounting for 99% of Indian exports to the UAE by value. India granted preferential market access covering approximately 90% of UAE exports by value. Both Parties' tariff commitments are set out in Annex 2A (India's schedule) and Annex 2B (UAE's schedule) to Chapter 2 (Trade in Goods) of the Agreement.

Immediate tariff elimination

The UAE provided immediate zero-duty access (effective May 1, 2022) for labour-intensive sectors including:

• Gems and jewellery (HS Chapters 71)
• Textiles and apparel (Chapters 50–63)
• Leather, footwear, and leather goods (Chapters 41–42, 64)
• Plastics and rubber products (Chapters 39–40)
• Furniture (Chapter 94)
• Agricultural and wood products (Chapters 1–24, 44)
• Engineering products (Chapters 72–73, 84–85)
• Pharmaceuticals and medical devices (Chapter 30, 90)
• Automobiles and auto components (Chapter 87)

India's zero-duty concessions cover a smaller share of its tariff schedule, reflecting domestic sensitivities in certain sectors. India placed 2,789 tariff lines (approximately 23% of its tariff schedule) in its Exclusion List, which receive no preferential treatment under CEPA.

Tariff-rate quotas (TRQs)

India granted tariff-rate quotas for specific sensitive products from the UAE, including:

• Polypropylene (HS 3902)
• Copper and copper products (Chapter 74)
• Dates (fresh and dried; HS 0804.10)
• Aluminium and aluminium products (Chapter 76, specified tariff lines)

In-quota volumes enter at reduced or zero preferential rates; out-of-quota imports are assessed at MFN or other applicable rates. TRQ administration (allocation and licensing) is managed by India's Directorate General of Foreign Trade (DGFT) under procedures notified separately. As of October 2024, the India-UAE Joint Committee noted challenges with TRQ allocation procedures; India subsequently amended the allocation process to address stakeholder feedback.

## Rules of origin: 35% value-addition threshold

Goods qualify as originating goods under CEPA if they satisfy the origin criteria in Chapter 3 (Rules of Origin) and Annex 3 (Product-Specific Rules) of the Agreement. The principal origin test is a value-addition threshold of at least 35 percent calculated on the FOB export price.

Value-addition calculation

Article 3.4 of the CEPA defines the value-addition formula:

Value Addition (%) = [(FOB Price – Value of Non-Originating Materials) / FOB Price] × 100 ≥ 35%

Where:

• FOB Price is the free-on-board price of the good when sold for export to the importing Party, excluding international freight and insurance.
• Value of Non-Originating Materials (VNM) is the CIF value (cost, insurance, freight to the port of entry in the territory of the exporting Party) of all materials imported from non-Parties and used in the production of the good, plus the value of any materials of undetermined origin.

Materials originating in India or the UAE count as originating materials and are excluded from the VNM numerator, permitting bilateral cumulation. For example, Indian textiles exported to the UAE and incorporated into UAE-made garments qualify the textile portion as originating when the garment is exported back to India under CEPA preferences, provided the finished garment meets the 35% value-addition test.

Alternative origin criteria

Goods also qualify as originating if they are:

1. Wholly obtained in India or the UAE (e.g., agricultural products harvested, minerals extracted, live animals born and raised, fish caught in territorial waters or the exclusive economic zone, or goods manufactured exclusively from such inputs) under Article 3.3.
2. Produced exclusively from originating materials (i.e., all inputs are themselves originating in India or the UAE).
3. Satisfy a product-specific rule (PSR) listed in Annex 3C (Product-Specific Rules of Origin). Annex 3C prescribes tailored change-in-tariff-classification (CTC) tests or higher value-addition thresholds for specified HS headings or chapters where the general 35% rule alone is deemed insufficient to confer origin. For example, certain chemicals, steel products, and machinery items may require a chapter-level CTC (materials from other HS chapters) or a 40–45% value-addition threshold.

Minimal operations and insufficient processing

Article 3.7 lists operations that are deemed insufficient to confer origin even if the 35% value-addition threshold is technically met. These minimal operations include:

• Preserving operations (refrigeration, freezing, drying, salting) to ensure transport or storage.
• Simple operations such as dusting, sifting, screening, sorting, classifying, sharpening, or cutting.
• Changes of packaging, repacking, breaking-up or assembly of packages.
• Affixing marks, labels, or other distinguishing signs on products or packaging.
• Simple mixing of products (whether or not of different kinds) where one or more components do not satisfy the origin criteria.
• Simple assembly of parts to constitute a complete product.
• Slaughter of animals.

When a good undergoes only these operations (or a combination thereof) in India or the UAE, it does not qualify for preferential treatment, regardless of the calculated value-addition percentage.

## Certificate of origin and verification procedures

Every importer claiming CEPA preferential treatment must produce a valid Certificate of Origin issued by the designated authority in the exporting Party. The CoO format is prescribed in Annex 3E to the Agreement. For Indian exports to the UAE, the following authorities are designated to issue CEPA Certificates of Origin (as of January 6, 2023, per DGFT Appendix 2B):

• Export Inspection Council of India (EIC) and its Export Inspection Agencies (EIAs) — for all goods.
• Marine Products Export Development Authority (MPEDA) — for marine products.
• Textile Committee — for textiles and made-ups.
• Certain Export Promotion Councils (EPCs) and Special Economic Zone (SEZ) authorities on a sector-specific basis.

Indian exporters apply for CEPA CoOs through the Common Digital Platform (CDP) at https://coo.dgft.gov.in (the eCoO 2.0 system, effective January 17, 2025).

For UAE exports to India, the Ministry of Economy of the United Arab Emirates is the designated issuing authority for CEPA Certificates of Origin.

Importers in India must comply with CAROTAR 2020 (Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020) procedural requirements: declare the preference in the Bill of Entry, cite the applicable CBIC tariff notification, produce the CoO, and retain origin-related information (including the value-addition calculation worksheet and supplier declarations) for at least five years. Indian Customs may request this documentation at any time or initiate verification with the UAE Ministry of Economy if the origin claim is in doubt.

## Enforcement and anti-circumvention concerns

At the second meeting of the India-UAE CEPA Joint Committee in October 2024, India raised concerns about surges in imports of silver products, platinum alloy, and dried dates and requested that the UAE verify compliance with origin rules and ensure that third-country goods are not being transshipped through the UAE to benefit from CEPA preferences. The UAE agreed to examine these concerns. CEPA incorporates robust verification mechanisms: either Party may request origin verification from the exporting Party's designated authority; if verification is not completed within 12 months or if the exporting Party fails to provide the requested information, preferential treatment is denied retroactively and the importer must pay the duty differential plus interest under Article 3.14 (Verification and Mutual Administrative Assistance) and Annex 3D (Operational Certification Procedures).

## Relationship to other India FTAs

India-UAE CEPA's 35% value-addition threshold differs from the origin frameworks in other India FTAs. For comparison:

• India-ASEAN (AITIGA) permits a choice between 35% regional value content (calculated across all ASEAN + India) or change in tariff subheading (HS four-digit level).
• India-Korea CEPA and India-Japan CEPA apply a 40% value-addition threshold (calculated as FOB minus VNM, divided by FOB) for most goods.
• India-Mauritius CECPA applies a 35% domestic value-addition threshold similar to India-UAE CEPA.

Practitioners must verify the specific origin rule applicable to each FTA when planning cross-border supply chains. Materials originating under one FTA (e.g., AITIGA) do not automatically qualify as originating materials under another FTA (e.g., CEPA) unless the good itself satisfies the CEPA origin criteria independently.

Source: India-UAE Comprehensive Economic Partnership Agreement, full text (Export Inspection Council of India) Source: India-UAE CEPA enters into force, Press Information Bureau, May 1, 2022 Source: Second meeting of Joint Committee under India-UAE CEPA held, Press Information Bureau, October 2024 Source: [Appendix 2B — List of Agencies Authorized to issue Certificate of Origin [Preferential], DGFT (as on January 6, 2023)](https://content.dgft.gov.in/Website/dgftprod/ad977111-207c-431a-a8cc-54c1754484c0/Appendix%202B%20(Certificate%20of%20Origin%20%5BPreferential%5D)%20as%20on%2006.01.2023.pdf)