India Adopts Proof of Origin in New Customs Compliance Framework

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India is enhancing its trade compliance framework with a recent amendment to the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR Rules). Effective March 18, 2025, the amendment introduces a critical change by replacing the term “Certificate of Origin” with the broader term “Proof of Origin” across various provisions of the rules.

This shift reflects India’s intent to align its customs processes with international trade norms while simultaneously tightening scrutiny over the misuse of Free Trade Agreements (FTAs).

India shifts from ‘certificate’ to ‘proof’ of origin

In the latest revision of the CAROTAR Rules, India has introduced several targeted changes that broaden the scope of origin documentation required under the FTA.

One of the revisions, as announced through Notification No. 14/2025-Customs (N.T.), involves replacing the word “certificate” with “proof” across various sections of the rules—covering definitions, documentation protocols, and origin verification procedures. Additionally, Form I has been updated to substitute “certificate of origin” with “proof of origin.”

Form I under the CAROTAR Rules is a declaration form submitted by the importer to the Indian customs authorities when claiming preferential duty benefits under an FTA. It is essentially a self-declaration by the importer stating that:

  • The goods qualify as originating under the terms of the relevant trade agreement.
  • The importer possesses valid proof of origin (earlier referred to as the certificate of origin).
  • Importers are prepared to submit relevant supporting documents and information, if required, during origin verification.

These modifications aim to broaden the scope of acceptable documentation required for claiming preferential tariffs under trade agreements, making room for diverse forms of origin evidence beyond conventional certificates.

The amendment has been enacted under the authority granted by Section 156, in conjunction with Section 28DA (Procedure regarding claim of preferential rate of duty) of the Customs Act, 1962.

Enhanced compliance and verification measures under amended rules

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The latest amendment to the ROO framework introduces more stringent compliance requirements for importers. India’s customs authorities now possess greater discretion to demand supplementary documentation beyond the traditional COO.

With these expanded powers, customs officers are better equipped to conduct in-depth origin verification, particularly to counter the rising issue of third-country routing. This is especially relevant in the context of goods originating from countries such as China, which are often rerouted through ASEAN countries or the United Arab Emirates (UAE) to benefit from the concessional tariffs under FTAs.

Importers are now required to comply with a stricter timeline when responding to customs queries, a measure aimed at accelerating the verification process and minimizing procedural delay.

Aligning rules of origin with modern FTA practices

The legislative shift is meant to serve India’s recent experiences with newer FTAs, which increasingly accommodate self-declaration systems alongside formal certificates. For instance:

  • The India-Australia Economic Cooperation and Trade Agreement (ECTA) provides for a review mechanism after two years from its entry into force (December 29, 2022) to consider allowing origin declarations by approved exporters.
  • The India-UAE Comprehensive Economic Partnership Agreement (CEPA) already recognizes self-declarations as valid proof of origin, although its implementation framework is still evolving.
  • The India-EFTA Trade and Economic Partnership Agreement (TEPA), yet to be ratified, also permits origin declarations by exporters under its rules of origin chapter.

Industry concerns over proof of origin requirements

While the recognition of self-declared origin documentation is expected to simplify trade procedures, reduce administrative complexities, and lower costs for exporters, industry stakeholders have raised some practical concerns.

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According to the Global Trade Research Initiative (GTRI), a New Delhi based research group, the new requirements could increase the compliance burden on importers, particularly in sectors such as electronics, white goods, and automotive components, where dependence on imported materials is relatively high.

One of the key challenges, as highlighted by GTRI, is the need to furnish additional supporting documents, which may be difficult to obtain due to suppliers’ reluctance to disclose commercially sensitive information. Moreover, the absence of clearly defined parameters for what qualifies as acceptable “proof of origin” may result in inconsistent assessments by customs authorities, potentially causing delays in cargo clearance and exposing importers to unnecessary legal or procedural challenges.

To address these concerns, the research group has recommended that the central government issue comprehensive guidelines to clarify documentation standards. It also suggests the establishment of a formal grievance redressal mechanism for importers who face unjust denial of preferential duty benefits.

Conclusion

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By shifting from a narrow reliance on COO to a broader concept of POO, India aims to ensure that preferential tariff benefits under FTAs are granted only to legitimately originating goods. While the new framework promises greater transparency and flexibility, it also places heightened responsibility on importers to substantiate their claims.

The success of this model will depend on robust regulatory oversight, digital systems for verification, and international cooperation between customs administrations. India must ensure that approval processes for exporters are transparent, well-monitored, and backed by adequate safeguards to prevent abuse.

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