The commerce department will examine procedures that are part of India’s existing free trade agreements (FTAs) in the wake of compliance with rules of origin being tightened. The Finance Bill has proposed an omnibus process but individual pacts need to be studied to check how the proposed Customs Act amendment can take effect, officials said.
A new chapter in the Customs Act on administration of rules of origin under trade agreements gives the government the power to suspend or refuse preferential tariff treatment in case of incomplete information or verification and non-compliance, respectively. A number of these provisions had only been detailed via notifications.
The Act also empowers Indian customs authorities to question the valuation of imports under FTAs for up to five years with the government proposing a significant shift in the domestic framework of rules of origin to tackle large scale imports.
“The partner country will have to raise this issue because it affects them,” the official added.