India UAE CEPA – CoO DGFT | Eligibility and Procedure – Complete Guide

ALL ABOUT – INDIA UAE CEPA TRADE AGREEMENT

In this blog, we will discuss all the important points you need to know about the recently announced India-UAE CEPA trade agreement.

You will get all the information in this blog like – Is the deal beneficial for you? Which products are eligible? What are the rules or origin? How can you apply for CoO under this FTA? Where do you apply? What documents are required? What are the obligations of a part of the exporter? Etc. Read the blog to the end.

Watch this short introductory video about – INDIA UAE CEPA TRADE AGREEMENT

It is very important to understand the rules of origin and product specific rules before applying – as this document ie. CoO is as good as a financial instrument and the UAE government has the right to post verification of this certificate at any given time and they can contact Indian authorities if any rules are violated.

Background to FTA agreements, what is CEPA and why is it so important for exports?

We are aware that FTA provides preferential tariff access to Indian export products in the importing country.

One such FTA was recently announced India UAE CEPA. India UAE CEPA was signed on February 18, 2022 and has been operational since May 1, 2022.

So why is this FTA so important? – As the UAE is a gateway to the whole of Africa, many other Gulf countries and Europe and 90% of India's exports by value would become completely duty free immediately.

So this will be very beneficial for Indian exporters.

Which sectors or which export products are eligible for preferential duty?

The list of all such products in terms of HS codes can be found in APPENDIX 2B. The PDF file link is shared below.

[Link – https://commerce.gov.in/wp-content/uploads/2022/03/Chapter-2-Annex-2B-Final-UAE-Revised-Market-Access-Offer-2118-Dec-18-2021.pdf]In the list, the majority of the export products are given 0% tariff preference immediately, while some products get 0% tariff preference gradually, ie after 5 years, or 7 years or 10 years.

What are the rules of origin criteria?

So the rules of descent are a very important section. A product will be considered to be of Indian origin only if it is wholly manufactured in India or sufficient working or processing of the imported material is done to arrive at the final product.

We will understand each one through an example:

Entirely made in India means the products which are entirely grown in India or manufactured from 100% Indian raw materials. A common example of such products is fruits and vegetables grown in India.

So the first criterion is quite simple and clear.

As regards the second criterion, a product will be considered sufficiently processed if it undergoes a change in customs classification at chapter level, ie. the first two digits of the HS/tariff level, i.e. the first four digits/subnumber of the customs tariff, i.e. the first six digits AND/OR it meets the value added criteria. This will be explained in detail in the Product Specific Rules section.

Product Specific Rules (PSR)

Let us understand these rules with the help of 3 examples.

Example 1 –

The figure shows that for all products under Chapters 3 to 8, to qualify for the CEPA benefits, it should be compulsorily obtained in full, ie. “WOO”

Example 2 –

So in this example the export product ie. The cashew kernel, to qualify for the CEPA benefits only if it has undergone a change in CTSH ie. customs tariff subheading, i.e. the first 6 digits of imported raw material are different from the first 6 digits of the final export product.

Example 3 –

The figure shows that for any product under Chapter 28 to 31, to be covered by the CEPA benefits, it should mandatorily maintain both the conditions viz. CTSH, i.e. the first 6 digits of imported raw material should be different from the first 6 digits of the final export product.

+ 40% VA should be maintained.

If there are many export items in the invoice, the VA for each export item must be calculated separately. Perhaps it is possible that some of your goods do not meet the PSR criteria, in these cases you need to mention in your documents and CEPA benefits for these products should not be taken.

Minimal process or insufficient operation

The image below shows the list of processes that are not allowed. This means that if you import something and do any of the above processes and export it, it will not qualify for CEPA benefits.

How to apply for CoO under CEPA?

So the last question would be how and where to apply?

Application for Coo under CEPA must be done on the CoO's common digital platform. It is a mandatory online process.

The application must be submitted within 5 days from the export date to the nearest export control body or DGFT.

Common documents required are: 1. Digital signature 2. Export invoice copy 3. Packing list 4. Waybill 5. Waybill 6. Appendix 3A 7. Manufacturer's declaration.

Once the application is made, the CoO is issued within one to two working days.

Who are we and why choose us

We at Afleo Group are a team of DGFT and customs experts who have a rich experience of 10+ years in Exim Consultancy & International logistics [Freight Forwarding]. With our vast knowledge and experience in this field, we can represent your case for all activities related to the country of origin and get it cleared in a hassle-free manner.

So contact us for your needs and our team will be happy to assist you.

Let us know if you have any doubts in the section below.

We request you to share this blog with your other industry friends, industry associations as this information may help them as well.

Thanks.

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