India-EU Free Trade Agreement talks
Recently India and the European Union have postponed the Free Trade Agreement (FTA) talks due to differences on the Rule of Origin (RoO) norms.
RoO is the set criteria for determining the country of origin of a product imported into a country.
Under this, the country which has signed an FTA with India, cannot launch the goods of any third country in the Indian market only by putting its own label. He has to add a specified value to that product in order to export it to India.
There are no specific rules governing the determination of the country of origin of goods in the General Agreement on Tariffs and Trade (GATT). Also, each contracting party is free to determine its own substantive rules.
RoO is used for:
- To implement commercial policy measures and instruments such as anti-dumping duties and safeguard measures;
- To determine whether imported products will receive Most Favored Nation (MFN) status or preferential status;
- Labeling and use for marketing requirements and for government procurement etc.
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 by exporting goods from another country to India.
Source – Business Standard
