India and Australia signed Economic Cooperation and Trade Agreement (ECTA)

India and Australia signed Economic Cooperation and Trade Agreement (ECTA)

  • Recently the Central Board of Indirect Taxes and Customs (CBIC) has notified the ‘Rules of Origin (RoO)’ for the India-Australia Trade Agreement (ECTA).
  • It has been notified with the title ‘Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules, 2022’.
  • These rules lay down the criteria for the place of origin of the product for claiming preferential customs duty on the products.
  • It may be noted that India and Australia have signed Economic Cooperation and Trade Agreement (ECTA). It is expected to cover 90% of the bilateral trade between the two countries.
  • RoO is the criteria to determine the place of origin (mainly country) of production/manufacturing of an imported product in a country.
  • This rule determines whether sufficient value addition has been made to the product in the partner country prior to import, so that the product can be recognized as originating in that partner country. Fixing RoO helps in preventing misuse of FTAs.
  • The General Agreement on Tariffs and Trade (GATT) does not contain any specific rules governing the determination of the country of origin of a product in international commerce.

The ‘Rules of Origin’ (RoO) are used in the following cases:

  • To implement commercial policy measures such as anti-dumping duties and safeguard measures.
  • To determine whether imported products will receive the benefit of Most-Favored-Nation (MFN) treatment or preferential treatment.
  • For trade statistics, government procurement, labeling and marking requirements.
  • Earlier India had notified the ‘Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020’ (CAROTAR).
  • Its purpose is to prevent tariff evasion by misusing FTA and exporting goods from another country to India.

Source – The Hindu

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