CBIC Notifies India–New Zealand FTA Rules of Origin 2026: New Customs Framework Effective 20 October

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Dated: 17.10.2026

CBIC Notifies India–New Zealand FTA Rules of Origin 2026: New Customs Framework Effective 20 October

The India–New Zealand Free Trade Agreement (FTA) allows eligible goods to receive preferential customs duty treatment, but only when traders can prove that the goods meet the agreement’s rules of origin.

Effective from 20 October 2026, the Customs Tariff (Determination of Origin of Goods under the Free Trade Agreement between India and New Zealand) Rules, 2026 set out how origin is established, documented, claimed, verified, and retained. The rules apply to trade between India and New Zealand and are central to exporters, producers, importers, approved exporters, status holders, and issuing authorities.

What makes a good “originating”?

A good qualifies as originating when it falls into one of two broad categories:

Wholly obtained or produced goods in India, New Zealand, or both countries; or
Goods meeting the applicable product-specific rule (PSR) in Annexure A, together with all other requirements under the rules.

This means that simple shipment from one FTA country is not enough. The product must meet the required origin test for its tariff classification.

Wholly obtained goods

Goods are wholly obtained when they originate entirely within one or both FTA parties. Typical examples include:

Plants, fruit, vegetables, flowers, trees, seaweed, fungi, algae, and other plant goods grown and harvested in either country.
Live animals born and raised in either country, and products obtained from those animals.
Goods obtained through hunting, trapping, fishing, aquaculture, gathering, or capturing within either country.
Minerals and other naturally occurring substances extracted from the soil, waters, seabed, or subsoil.
Fish and other marine life taken outside non-party territorial seas by qualifying vessels registered with, and flying the flag of, India or New Zealand.
Waste and scrap from production or consumption that is fit only for raw-material recovery.
Goods made solely from wholly obtained goods or their derivatives.

Product-specific rules and value-content tests

For manufactured goods using imported inputs, the relevant rule is determined by the product’s Harmonized System (HS) classification in Annexure A. The applicable rule may require a tariff-classification change, a minimum qualifying value content (QVC), a specified production process, or a combination of these requirements.

Key origin-rule terms

CC: All non-originating materials must change at the two-digit HS chapter level.
CTH: All non-originating materials must change at the four-digit HS heading level.
CTSH: All non-originating materials must change at the six-digit HS subheading level.
WO: The good must be wholly obtained.
QVC: The product must meet the stated qualifying value-content threshold.
Process rule: The prescribed manufacturing process must take place in India or New Zealand.

Where a product has alternative PSRs, meeting any one alternative is sufficient. Where a PSR contains multiple conditions, however, all applicable conditions must be met.

For example, goods under HS 9503, including toys and puzzles, require CTSH + QVC 45%. By contrast, certain goods under HS 9602 may qualify through CTSH or QVC 40%.

Calculating Qualifying Value Content

QVC may be calculated under either of the following methods:

Build-down method:

QVC = ((FOB value − value of non-originating materials) / FOB value) × 100

Build-up method:

QVC = (value of originating materials / FOB value) × 100

Unless a product-specific rule provides otherwise, a QVC percentage stated in Annexure A is based on the build-down method. If the build-up method is used, the required threshold is generally 10 percentage points lower. The exception is goods in HS Chapter 71, for which the stated QVC threshold applies under either method.

All costs and values must be recorded under the Generally Accepted Accounting Principles applicable in the country where the good is produced. Material values are determined under the Customs Valuation Agreement.

Cumulation, de minimis, and special material rules

The agreement supports bilateral supply chains by allowing bilateral cumulation. An originating material from one FTA party retains originating status when incorporated into a good produced in the other party. For example, an originating New Zealand component used in manufacturing in India can be treated as originating in India for the finished product’s origin analysis.

De minimis tolerance

A limited amount of non-originating material that fails the applicable tariff-shift rule may still be permitted:

For most goods, the value of such non-originating materials cannot exceed 10% of the FOB value of the good.
For textile and apparel goods in HS Chapters 50–63, the total weight or value of the non-originating materials that fail the rule cannot exceed 10% of the total weight or value of the good.
For goods required to be wholly obtained, non-originating materials from other HS chapters may be tolerated only up to 1% of the total weight or value of the good.

Where the product is subject to a QVC requirement, de minimis non-originating materials must still be included in the value of non-originating materials for the QVC calculation.

Packaging, accessories, and indirect materials

Several supporting materials receive special treatment:

Retail packaging is disregarded for tariff-shift and wholly-obtained tests if classified with the good, but its value must be included in the QVC calculation as originating or non-originating, as appropriate.
Transport packaging is ignored when determining origin.
Accessories, spare parts, tools, and instructional materials are disregarded for tariff-shift or process-rule tests if they are not separately invoiced and are customary in quantity and value. They are included in QVC calculations where QVC applies.
Indirect materials, such as fuel, testing equipment, protective equipment, tools, and maintenance supplies, are treated as neither originating nor non-originating in QVC calculations.
Fungible goods may be managed through physical separation or a GAAP-recognised inventory-management method. The chosen inventory method must be used consistently throughout the fiscal year and cannot assign origin to more goods than physical segregation would allow.

Direct transport and third-country transit

Originating status is retained when goods are transported directly from the exporting party to the importing party. Transit through a non-party is also permitted, provided that the goods:

Do not undergo production or other operations outside India and New Zealand, apart from unloading, reloading, storage, repacking, permitted relabelling, load splitting or consolidation, or actions needed to preserve the goods or move them onward; and
Remain under customs control while in the non-party.

Customs may request evidence such as airway bills, bills of lading, multimodal transport documents, non-manipulation certificates, or other relevant supporting records.

Proof of origin: certificates and origin declarations

A claim for preferential tariff treatment must generally be supported by a valid proof of origin. The permitted forms are:

A Certificate of Origin issued by a designated issuing authority; or
An Origin Declaration completed by an Indian status holder, a New Zealand approved exporter, or, following a future review, potentially an exporter or producer.

A proof of origin must be in English, contain a unique certification or identification number, state that the goods are originating, include the prescribed information, and normally be completed or issued before or at the time of importation.

Validity and scope

A certificate or origin declaration remains valid for 12 months from its issue or completion date. It may cover one or multiple goods in a single importation, provided each good qualifies independently.

For New Zealand, a proof of origin may also cover multiple shipments of identical goods over a stated period of up to 12 months. A proof of origin may reference two or more invoices for a single importation.

Retrospective issue and replacement copies

In exceptional circumstances, proof of origin may be issued after importation if it states “ISSUED RETROSPECTIVELY” and explains the reason. It must be issued no later than 12 months after importation.

If an original Certificate of Origin is stolen, lost, or accidentally destroyed, a certified copy may be requested during the original certificate’s validity period. The replacement must state “CERTIFIED TRUE COPY” and has the same validity period as the original.

Minor errors, such as typographical mistakes, small omissions, or slight differences between documents, do not invalidate proof of origin unless they create doubt about the goods’ originating status.

Certificates, self-certification, and trader responsibilities

To obtain a Certificate of Origin, the exporter or producer must submit an application, supporting origin evidence, the commercial invoice, and other relevant documents to the issuing authority. Each product listed on a certificate must independently meet the relevant origin criteria.

Issuing authorities are required to verify that the application is properly completed and signed, the good meets the origin rules, and the certificate information matches the supporting records. They may use risk management to conduct selective pre-export verification.

India may grant eligible Indian exporters status holder certificates, allowing them to self-certify origin declarations. New Zealand may authorise eligible exporters as approved exporters for the same purpose. In both cases, the self-certifying trader accepts full responsibility for the origin declaration, and the approval may be withdrawn for non-compliance or improper use.

If an exporter or producer learns that a certificate was based on incorrect information that affects origin status, it must promptly notify the importer, the issuing authority, and the importing country’s customs administration in writing.

A third-country invoice does not, by itself, prevent preferential treatment, provided the goods otherwise meet the rules.

How importers claim the preferential tariff

To claim the FTA rate, an importer must:

Declare that the goods qualify as originating.
Hold a valid proof of origin when making that declaration.
Provide the proof of origin when requested by customs.
Demonstrate compliance with the direct-transport requirements when customs requires it.
Provide supporting documents and information if requested.

If a claim is made without proof of origin, customs may deny the preference, request a guarantee, or take other lawful action to protect revenue while import formalities are completed.

An importer that did not claim the preference at import may apply later for preferential treatment and a duty refund, provided the goods qualified at the time of import. The claim and supporting documentation may be required within 12 months of importation, or a longer period where domestic law permits.

Where an importer discovers that an origin claim was based on incorrect information, it must correct the import documentation and pay any unpaid duties and penalties that apply. A voluntary disclosure before discovery may be considered a mitigating factor when penalties are assessed.

Recordkeeping: the five-year evidence rule

Recordkeeping is a core compliance obligation. Exporters, producers, approved exporters, status holders, and issuing bodies must retain origin records for at least five years from the issuance or completion of the proof of origin, unless a longer period applies under domestic law.

Importers must retain relevant records for at least five years from importation, again subject to any longer domestic retention period.

Required records include commercial, accounting, customs, and production documentation needed to demonstrate origin. This can include:

Bills of materials and supplier-origin information.
HS classifications of finished goods and inputs.
Cost breakdowns for materials, labour, overheads, profits, and other QVC elements.
Production records and process descriptions.
Invoices, transport documents, and customs documents.
Proof of origin and evidence supporting direct transport or non-manipulation during transit.

The original proof of origin must be retained in hard-copy written form. Other supporting records may be kept digitally, electronically, or in writing, provided they can be retrieved promptly. Records must be made available for inspection when requested by the relevant issuing authority or customs administration.

Verification, denial, and compliance risks

The importing country may verify origin at importation or after release. Verification may be risk-based, random, or triggered by reasonable doubt about the authenticity or accuracy of the claim.

The process generally progresses from written requests to more intensive measures:

Request information from the importer.
Request confirmation or information on a Certificate of Origin from the exporting party.
Request information from the exporter, producer, approved exporter, or status holder through the exporting party’s authorities.
Request assistance from the exporting party’s competent authority.
Conduct a verification visit to the exporter’s or producer’s premises if earlier steps are insufficient.

For certificate-authenticity requests, the exporting authority generally has 30 days to respond. For origin-determination questions, the normal period is 60 days, extendable by up to 30 days by agreement. Exporters, producers, approved exporters, and status holders normally have 60 days to answer written requests, with a possible agreed extension of up to 30 days.

A verification visit requires written consent. If consent is not obtained within 30 days, the importing country may deny preferential treatment. During verification, goods may still be released subject to duty payment or security under domestic law.

Preferential treatment may be denied where goods do not meet the origin rules, required information is not provided, prescribed timelines are missed, verification access is refused, or supporting evidence is insufficient. Customs must notify the importer in writing and state the reasons for denial.

Persistent or deliberate misrepresentation can result in temporary suspension of preferences for a specific exporter, producer, approved exporter, or status holder. In more serious cases involving multiple traders and a substantial share of preferential imports of the same six-digit HS product, the parties may consider a temporary product-wide suspension through the agreement’s institutional process.

Practical compliance priorities

Businesses using the FTA should integrate origin analysis into product design, sourcing, costing, shipping, and customs-declaration processes. The highest-risk areas are incorrect HS classification, incomplete QVC calculations, weak supplier-origin evidence, unsupported self-certification, and missing transit documentation.

A compliant origin file should clearly connect the product’s HS code, applicable product-specific rule, source and status of each material, production steps, QVC calculation where relevant, proof of origin, and transportation evidence. This creates the audit trail needed to support preferential treatment and respond quickly to customs verification.

The central principle is straightforward: preferential duty treatment depends not only on where a product is shipped from, but on whether its origin can be established and documented under the FTA’s specific rules.

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.

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

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