The Department of Revenue under the Indian Ministry of Finance has notified norms to enforce provisions for Rules of Origin to allow preferential rate of customs duties on products imported under free trade agreements (FTAs). The norms have been framed to check inbound shipments of low-quality products and dumping of goods by a third country routed through an FTA partner country.

‘Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020' would come into force on September 21. These rules shall apply to import of goods into India where the importer makes a claim of preferential rate of duty in terms of a trade agreement.

The ‘rules of origin’ provision prescribes for the minimal processing that should happen in the FTA country so that the final manufactured product may be called originating goods in that country. Under this provision, a country having an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it. It has to undertake a prescribed value addition in that product to export to India.

According to the notification, to claim preferential rate of duty under a trade agreement, the importer or his agent, at the time of filing bill of entry, has to make a declaration in the bill that the imported products qualify as originating goods for preferential rate of duty under that agreement; and produce certificate of origin.

The importer also has to possess all relevant information related to country of origin criteria, including the regional value content and submit the same to the proper officer on request.