The Rules of Origin under the India-UK Comprehensive Economic and Trade Agreement (CETA)

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 04.07.2026

The Rules of Origin under the India-UK Comprehensive Economic and Trade Agreement (CETA)

The Customs Tariff (Determination of Origin of Goods under Comprehensive Economic and Trade Agreement between India and the United Kingdom) Rules, 2026, set out the legal framework for determining the origin of goods traded between India and the UK. Understanding these rules is essential for businesses seeking to benefit from preferential tariffs under the India-UK CETA.

What Are Rules of Origin?

Rules of origin are the criteria used to define where a product was made. Under the India-UK CETA, only goods that meet these criteria are eligible for preferential tariff treatment. This ensures that the benefits of the agreement are limited to goods genuinely originating from India or the UK.

Key Definitions

Originating Goods: Goods that qualify as originating under the rules, either because they are wholly obtained, produced exclusively from originating materials, or meet specific product rules.
Non-Originating Goods: Goods that do not meet the origin criteria.
Wholly Obtained: Goods entirely produced or obtained in one or both Parties (e.g., minerals extracted, crops harvested, animals born and raised).
Qualifying Value Content (QVC): The minimum percentage of value that must be added within the Parties, calculated using specified methods.

Origin Criteria

A good is considered originating if it is:

Wholly obtained or produced in the territory of one or both Parties (e.g., minerals, plants, live animals).
Produced exclusively from originating materials in the territory of one or both Parties.
Produced using non-originating materials but meets all applicable requirements of Annexure-A (Product Specific Rules of Origin).

Final production must occur in the exporting Party, with limited exceptions.

Product Specific Rules of Origin (Annexure-A)

Annexure-A provides detailed rules for each product category, based on Harmonized System (HS) codes. These may require:

A change in tariff classification (at chapter, heading, or sub-heading level)
A minimum QVC
Specific processes (e.g., chemical reaction, melt and pour for steel)

Examples:

Live animals (Chapter 1): Must be wholly obtained.
Coffee, not roasted (090112): Requires a change in tariff sub-heading (CTSH).
Motor vehicles (8703): Must have a QVC of at least 35%.

Calculation of Qualifying Value Content (QVC)

Two main methods are used:

Build-Down Method: QVC = (Value of the good – Value of non-originating materials) / Value of the good × 100
Build-Up Method: QVC = Value of originating materials / Value of the good × 100

The required percentage varies by product and is specified in Annexure-A.

Non-Qualifying Operations

Certain minimal operations do not confer origin, such as:

Simple packaging, mixing, or assembly
Washing, cleaning, or simple cutting
Affixing labels or marks
Dilution with water

Cumulation Principle

Originating materials or goods from one Party, when used in the production of a good in the other Party, are considered as originating in the latter Party. This allows for greater flexibility in supply chains.

Tolerance Rule

Goods may still qualify as originating even if they contain a small percentage of non-originating materials, provided these do not exceed specified value or weight thresholds (e.g., 7.5% or 12.5%, depending on the product).

Proof of Origin

To claim preferential tariff treatment, importers must provide proof of origin:

For UK importers: Origin declaration, certificate of origin, or importer’s knowledge.
For Indian importers: Origin declaration by exporter or producer.

Proof must be valid, submitted in English, and follow the templates in Annexure-B or C.

Verification and Record-Keeping

Customs authorities may verify origin claims and request supporting documents.
Importers, exporters, and producers must retain records for at least four or five years, as applicable.

Exemptions and Refunds

Low-value consignments may be exempt from proof of origin requirements.
Importers can make late claims for preferential treatment and request refunds for excess duties if the goods qualify.

Data Protection and Confidentiality

Personal data exchanged for authentication of origin declarations is protected under strict data processing and confidentiality rules (Annexure-E).

Working Group on Rules of Origin

A joint working group oversees the administration, interpretation, and updates to the rules, ensuring smooth implementation and addressing any issues.

Conclusion

The Rules of Origin under the India-UK CETA are comprehensive and detailed, designed to facilitate trade while preventing circumvention. Businesses should familiarize themselves with the specific requirements for their products and maintain robust documentation to benefit from preferential tariffs under this agreement.

Listen to this on our #YouTube Channel

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: CBIC, Ministry of Finance, Govt. of India

Disclaimer

Handy Download:

Customs Notification (N.T.)Download

Connect with us for more-

@ Team S J EXIM SERVICES, New Delhi, IN

CP: Ms. Shubhra Jha, Founder

Tel: +91-11-4999 2707 I +91-9999005693

Web: www.sjexim.services

EMAIL: operations@sjexim.services I shubhra@sjexim.services

Facebook: www.facebook.com/sjeximservices

LinkedIn: https://www.linkedin.com/company/90794255/admin/feed/posts/