Strengthening Trade Compliance: New Rules on Proof of Origin
- vidyarthee2021
- Mar 24
- 2 min read
The Ministry of Finance has introduced the Customs (Administration of Rules of Origin under Trade Agreements) Amendment Rules, 2025, modifying the existing 2020 Rules. The amendment aligns with the Customs Act, 1962 and aims to enhance scrutiny over imports availing preferential tariff benefits under various trade agreements.
Key Changes in the Rules
Proof of Origin vs. Certificate of Origin:
Earlier, importers could submit a Certificate of Origin (CoO) issued by an exporting country to claim lower tariff rates.
Under the new rule, importers must now submit Proof of Origin, providing additional documentary evidence to support the claim.
Enhanced Customs Scrutiny:
Authorities can now demand additional evidence beyond just a certificate.
This step ensures that goods are genuinely produced or processed in the country they claim to originate from.
Compliance with Trade Agreements:
Strengthens India’s ability to verify the authenticity of imports under Free Trade Agreements (FTAs).
Reduces instances of tariff evasion through trade diversion.
Significance of the Amendment
Prevents Misuse of FTAs:
Some countries, like China, have been accused of routing goods through ASEAN, Sri Lanka, UAE, etc., to bypass higher tariffs under India’s FTAs.
The new proof requirement will tighten trade compliance and curb such evasions.
Boosts Domestic Industry:
Ensures fair competition by preventing the dumping of underpriced goods from foreign markets.
Encourages Indian manufacturers by protecting local industries from unfair trade practices.
Strengthens Customs Enforcement:
Empowers authorities with greater flexibility to scrutinize suspect imports.
Helps India comply with WTO norms while safeguarding its economic interests.
UPSC Prelims Question
With reference to the Customs (Administration of Rules of Origin under Trade Agreements) Amendment Rules, 2025, consider the following statements:
The amendment aligns with the provisions of the Customs Act, 1962.
Under the new rules, a Certificate of Origin alone is sufficient to claim preferential tariff benefits.
The amendment aims to curb trade diversion and prevent tariff evasion under Free Trade Agreements (FTAs).
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3
UPSC Mains Question
Q. The recent amendments to India's Rules of Origin under Trade Agreements aim to strengthen trade compliance and safeguard domestic industries. Discuss the need for such measures and their impact on India's trade policies.
(GS Paper 3 – Economy & International Trade)
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