# Rules of Origin in India 2026: CAROTAR 2020 Guide for FTA Importers

> Source: https://krystal7.com/insights/rules-of-origin-fta-carotar-importers
> Publisher: Krystal7 Consultants (Krystal7 Innovations Private Limited), Gurugram, India
> Author: CA Nandini
> Published: 05 Mar 2026; updated 24 Oct 2026
> Summary: Under CAROTAR 2020 an importer claiming FTA duty must hold Form I origin data and answer customs in 10 working days. See the steps, the risks and each FTA.

*Written by CA Nandini Hasija, Krystal7 Consultants. Last updated 23 October 2026.*

## AI Overview Summary

- To claim FTA duty in India, the importer declares origin in the bill of entry, produces the proof of origin and enters its details, under rule 3 of CAROTAR 2020.
- The importer must hold the origin information in Form I before importing and keep supporting documents for at least five years from the bill of entry, under CAROTAR rule 4.
- If customs asks for origin information, the importer has 10 working days to reply. Customs can then verify with the exporting country and suspend the preference meanwhile.
- A failed claim costs the standard duty plus interest under section 28AA, and a section 114A penalty for collusion, wilful misstatement or suppression. Customs can also refuse the rate on identical goods from that exporter.
- Since 18 Mar 2025 CAROTAR speaks of a proof of origin, not only a certificate. Origin declarations by exporters under the EFTA and UK agreements now fit the same process.

**Rules of origin decide whether an import qualifies for a lower duty under one of India's FTAs. Under section 28DA of the Customs Act, 1962 and CAROTAR 2020 (in force 21 Sep 2020), the importer declares origin in the bill of entry. It holds Form I information. It keeps records for five years and answers customs within 10 working days. If it cannot, customs denies the rate and recovers duty.**

This page is for foreign owned companies that import into India under the UAE, Australia, UK and EFTA agreements, and for their customs brokers. It covers the legal framework, Form I, verification, the cost of a failed claim and how each agreement fits.

## What are rules of origin under India's FTAs?

Rules of origin are the tests in each trade agreement that decide whether a product counts as made in a partner country. Only goods that pass get the preferential duty. Each agreement sets its own tests, and Indian customs applies them through a separate origin rules notification for that agreement.

Most agreements use the same building blocks. A product is either wholly obtained in the partner country, or it meets a product specific rule. The product specific rule may require a change in tariff classification, a minimum regional value content, a cap on non originating materials, or a specific process.

Every agreement also has general rules. These cover minimal operations that never confer origin, such as packing, labelling or simple mixing. They cover tolerance (de minimis), cumulation, direct transport and the proof of origin.

The origin rules decide the duty, not the country of shipment. A machine shipped from Dubai but assembled in China from Chinese parts does not become UAE origin. A Swiss part made largely from Swiss materials may qualify even if it is shipped through Rotterdam, provided the transport rule is met.

Customs duty in India has several parts. The FTA preference cuts basic customs duty, and the Social Welfare Surcharge falls with it because it is a percentage of basic duty. Holding Authorised Economic Operator status speeds clearance but does not replace the origin file; see our [AEO guide](/insights/authorised-economic-operator-aeo-india). IGST still applies on imports. Our guide to [customs duty in India](/insights/customs-duty-india-basics-foreign-importers) explains each part.

## What is CAROTAR 2020 and when did it start?

CAROTAR 2020 is the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. CBIC notified it as Notification 81/2020-Customs (N.T.), G.S.R. 521(E), on 21 Aug 2020, under section 28DA of the Customs Act, 1962. It came into force on 21 Sep 2020 and applies to every preferential claim.

The Finance Act, 2020 inserted section 28DA. The Budget speech of 2020 said undue claims of FTA benefits threatened domestic industry. See [PIB release 1656254 of 18 Sep 2020](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1656254&reg=48&lang=2). CAROTAR gave customs a process to check those claims.

| Instrument | Date | What it does |
|---|---|---|
| Section 28DA, Customs Act, 1962 | Inserted by section 110 of the Finance Act, 2020 | Importer's duty of reasonable care; verification, suspension and denial |
| Notification 81/2020-Customs (N.T.), G.S.R. 521(E) | 21 Aug 2020, in force 21 Sep 2020 | CAROTAR 2020, rules 1 to 8 and Form I |
| Circular 38/2020-Customs | 21 Aug 2020 | Guidelines on section 28DA and CAROTAR |
| Instruction 19/2022-Customs | 17 Aug 2022 | Apply CAROTAR consistently with each FTA's own rules |
| Instruction 10/2023-Customs | 10 Mar 2023 | Rules of origin and certification procedures under the India Australia ECTA |
| Section 100, Finance (No. 2) Act, 2024 | 2024 | Replaces "certificate" with "proof" in section 28DA(2) and (10); defines proof of origin and issuing authority |
| Notification 14/2025-Customs (N.T.), G.S.R. 178(E) | 18 Mar 2025 | Replaces "certificate" with "proof" of origin in CAROTAR |

CAROTAR does not replace the FTA rules. It sits on top of them. Where CAROTAR conflicts with an agreement's rules of origin, the agreement prevails (rule 8(3)). CBIC repeated this in Instruction 19/2022 and Instruction 10/2023 ([CBIC training deck on CAROTAR](https://bangalorecustoms.gov.in/wp-content/uploads/2024/02/CAROTAR-221023-1.pdf)).

## What must an importer possess before claiming FTA duty?

Before importing, the importer must hold enough information to show how the goods meet the origin criteria, including value content and product specific rules. That information is listed in Form I. At import, the importer declares origin in the bill of entry and produces the proof of origin. Supporting documents stay on file for five years.

Section 28DA(1) puts the burden on the importer. It must declare that the goods qualify, hold sufficient origin information, furnish it as the rules require, and exercise reasonable care over its accuracy. Section 28DA(2) adds that producing a proof of origin does not absolve the importer of reasonable care.

| Obligation | When | Rule |
|---|---|---|
| Declare that the goods are originating | In the bill of entry | Rule 3(1)(a) |
| Quote the tariff notification serial for each item | In the bill of entry | Rule 3(1)(b) |
| Produce the proof of origin | At import | Rule 3(1)(c) |
| Enter the proof of origin details, such as reference number, date and origin criterion | In the bill of entry | Rule 3(1)(d) |
| Hold the Form I information | Before import | Rule 4 |
| Keep supporting documents | At least 5 years from the bill of entry | Rule 4 |
| Answer a requisition for information | Within 10 working days | Rule 5(2) |

JNCH told importers that the bill of entry format was being modified to allow these declarations. See [JNCH Public Notice 114/2020 of 10 Sep 2020](https://www.jawaharcustoms.gov.in/pdf/PN-2020/PN-114-2020.pdf). The same notice says that "mere submission of a certificate of origin shall not absolve the importer of the responsibility to exercise reasonable care".

The importer cannot outsource this duty to the exporter. In practice, we ask the overseas supplier for the origin data before the first shipment, not after a customs query.

## What information does Form I ask for?

Form I lists the minimum origin information an importer must hold under CAROTAR rule 4. It asks for the production process in the country of origin and the origin criterion claimed. For goods that are not wholly obtained, it asks for the data that prove the criterion, product by product.

Form I has three sections. Section I gives guidance. Section II is filled after the bill of entry is filed. Section III holds the information to have before importing (CBIC training deck).

Section III, Part A describes the production process and the origin criterion claimed. Examples are wholly obtained (WO), a tariff shift such as CTH or CC, a value test (RVC), or a value test plus a tariff shift. Part B is completed for each good that is not wholly obtained, on a separate sheet. Read its line items in the Form I printed with G.S.R. 521(E) of 21 Aug 2020, as amended by G.S.R. 178(E) of 18 Mar 2025, on egazette.gov.in.

What we collect from the supplier to support Form I:

1. The bill of materials with the HS code, origin and value of each input.
2. The ex works price and FOB value of the finished good.
3. A short description of the manufacturing process and where each step takes place.
4. The supplier's own origin calculation under the product specific rule.
5. Supplier declarations for inputs claimed as originating.
6. The transport documents that show direct consignment.

Suppliers often resist sharing cost data. Swiss customs circular R-30 says exporters need not disclose confidential information, and Swiss customs does not pass trade secrets to foreign authorities. The Indian importer still carries the burden under section 28DA. Agree in the supply contract what the supplier will share, and with whom.

## What is the difference between a certificate of origin and a proof of origin?

A certificate of origin is issued by an authority in the exporting country. A proof of origin is wider. It also covers declarations made by an eligible exporter or producer. Since Notification 14/2025-Customs (N.T.) of 18 Mar 2025, CAROTAR uses "proof of origin" throughout, so self declarations fit the same process.

The amendment rules are the Customs (Administration of Rules of Origin under Trade Agreements) Amendment Rules, 2025, G.S.R. 178(E). They replace "certificate" with "proof" in rules 2(1)(f), 3(1)(c) and (d), 3(2) and 6(1). In Part B of Form I, "CoO" becomes "proof of origin". The notification was published in the Gazette of India and can be found on [egazette.gov.in](https://egazette.gov.in/).

The change followed an amendment of section 28DA itself. Section 100 of the Finance (No. 2) Act, 2024 replaced "certificate" with "proof" in section 28DA(2) and in clauses (ii) to (iv) of the refusal clause, section 28DA(10). It also defined a proof of origin as a certificate or declaration issued in accordance with a trade agreement. The Act is on [indiacode.nic.in](https://www.indiacode.nic.in/).

The new wording covers declarations made by exporters under newer agreements, as well as certificates issued by an authority. Each agreement decides which form of proof applies.

This matters for newer agreements. Under the EFTA TEPA, an approved exporter in Switzerland or Norway makes an origin declaration. Under the EU FTA, once in force, the exporter makes a Statement on Origin. Both are proofs of origin under CAROTAR.

## How does customs verify an origin claim?

Customs first asks the importer. The importer has 10 working days to reply under rule 5. If customs is satisfied, it accepts the claim within 15 working days. If not, it sends a verification request to the exporting country under rule 6, and may suspend the preference meanwhile.

Customs can start verification for three reasons under rule 6(1). It may doubt the genuineness of the proof. It may believe the origin criteria are not met. Or it may select the claim at random.

| Step | Who acts | Time limit | Rule |
|---|---|---|---|
| Requisition of information | Proper officer to importer | During or after clearance | 5(1) |
| Importer's reply | Importer | 10 working days | 5(2) |
| Acceptance if satisfied | Proper officer | 15 working days from the reply | 5(3) |
| Proposal for verification | Proper officer to nodal officer | If the reply is insufficient | 5(4) |
| Verification request to the exporting country | Customs, through the nodal officer in the International Customs Division | As per the agreement, or 60 days if it is silent | 6(2), 6(3) |
| Decision after information is received | Proper officer | 45 days, or an extended period | 6(6) |
| Outer limit for a verification request | Customs | 5 years from the claim, unless the agreement says otherwise | Section 28DA(9) |

Circular 38/2020 adds an internal clock. Requests for doubts about genuineness or random checks go to the Board at once. Requests for doubts about origin criteria go within 10 days of receiving the required information (CBIC training deck).

The agreement's own timelines prevail. Under the EFTA TEPA origin rules, the exporting party acknowledges a request within 45 days and generally replies within 10 months. Under the EU FTA, the exporting authority replies within 7 months. Plan for a long wait when a claim goes to the partner country.

During verification, customs may suspend the preference (rule 6(4)). On request, it releases the goods provisionally against security equal to the duty difference (section 28DA(5)).

## What happens if customs denies the preferential claim?

Customs charges the standard duty instead of the FTA rate and recovers any shortfall with interest. It may extend the denial to identical goods from the same exporter. It may route the importer's later bills of entry to full assessment. Where there is collusion, wilful misstatement or suppression, a penalty under section 114A follows.

Customs can deny without verification in four cases under rule 3(2) and section 28DA(10). The proof of origin is incomplete. It carries an alteration the issuing authority has not authenticated. It is produced after its validity expires. Or the item is not eligible for the preference.

| Consequence | Trigger | Provision |
|---|---|---|
| Denial of the preferential rate | Failed verification, no response, or non qualifying goods | Rule 6(7); section 28DA(8) |
| Denial without verification | Incomplete, altered, expired proof or ineligible item | Rule 3(2); section 28DA(10) |
| Recovery of short paid duty | Duty not paid at the correct rate | Section 28 (2 years, or 5 years for collusion, wilful misstatement or suppression) |
| Interest | Duty paid late | Section 28AA |
| Penalty equal to duty | Short payment due to collusion, wilful misstatement or suppression | Section 114A |
| Denial for identical goods | Same exporter or producer, until it changes the process | Rule 7; section 28DA(11) |
| Full assessment of later imports | Importer missed the rule 5 deadline or failed reasonable care | Rule 8(1), assessment under section 17(2) |
| Disallowance and penal action | Suppression, wilful misstatement or collusion | Rule 8(2) |

Rule 8(1) hurts most in practice. Once triggered, the importer's later bills of entry go to an officer for assessment under section 17(2). This continues until the importer shows proper record based controls. That slows every later shipment as well as the disputed one.

## What are tolerance, cumulation and product specific rules?

Tolerance lets a small share of non originating materials ignore the tariff shift rule. Cumulation lets inputs from a partner count as originating. Product specific rules set the test for each heading. All three come from the agreement, not from CAROTAR, and each agreement sets its own numbers.

The EFTA TEPA rules, as notified in India, show how this works. The tolerance is 10 percent of FOB or ex works value (rule 5(2) of Notification 59/2025-Customs (N.T.)). Cumulation covers all parties (rule 7). Many lines cap non originating materials at 60 percent of the ex works price. Pharmaceuticals in Chapter 30 use 65 percent. The FOB based cap is 5 percentage points lower.

The EU FTA text uses a 10 percent tolerance by value for most products and 5 or 10 percent by weight for farm chapters (Article 3.4). It allows bilateral cumulation (Article 3.6). Steel follows a melt and pour rule, according to the Government of India FAQ.

The product specific rule is where most claims fail. A supplier changes an input, the share of non originating materials rises above the cap, and nobody updates the origin file. Review the calculation whenever the bill of materials or the input prices change.

## How does CAROTAR apply to imports from the UAE under CEPA?

The India UAE CEPA has applied since 1 May 2022. Its tariff concessions are in Notification 22/2022-Customs of 30 Apr 2022, according to DGFT's Appendix 2A. Its origin rules sit in a separate Customs Tariff (Determination of Origin of Goods) rules notification. The importer claims with a certificate of origin from a UAE authority, and CAROTAR applies in full.

Retrospective certificates and certificates with typing errors need care. Before you accept one, read what the CEPA origin rules allow for that case. Then check CBIC's customs circulars on [CBIC's tax information portal](https://taxinformation.cbic.gov.in/) for any guidance on the CEPA.

The UAE is a common route for goods made elsewhere. We see customs query UAE origin claims most often where little processing happens in the UAE. Before the first shipment, ask the UAE supplier for its manufacturing data as well as the certificate.

Tariff concessions under the CEPA phase in by year for many lines. Read the rate for your line and year in Notification 22/2022-Customs, as amended, before you claim.

If you are a UAE group setting up in India, our [UAE to India company guide](/insights/company-registration-in-india-from-united-arab-emirates) covers the entity side.

## How does CAROTAR apply to imports from Australia under ECTA?

The India Australia ECTA has applied since 29 Dec 2022. DGFT's Appendix 2A links its tariff concessions to Notification 62/2022-Customs of 26 Dec 2022. The origin rules, including the requirements of a valid certificate of origin, sit in CBIC's separate ECTA origin rules notification. Australian issuing bodies issue certificates, including electronic ones, and CAROTAR applies to every claim.

CBIC Instruction 10/2023-Customs of 10 Mar 2023 clarified the origin and certification procedures under the ECTA, including electronic certificates. An electronic certificate from an Australian issuing body is valid if it follows the set format, bears the authorised seal and signature, and meets the ECTA origin rules.

The importer or customs broker uploads the electronic certificate on eSanchit. It enters the reference number, date and origin criterion in the bill of entry. The system blocks reuse of the same reference number across bills of entry.

The instruction also removed some technical grounds for doubt. A QR code is not required under the ECTA. Missing overleaf notes are not a ground for verification. "Any ports in India" in the port of destination field is acceptable if the transport documents match.

For Australian groups building an Indian presence, our [Australia to India company guide](/insights/company-registration-in-india-from-australia) covers set up.

## How does CAROTAR apply to imports from EFTA under TEPA?

The India EFTA TEPA has applied since 1 Oct 2025. Its origin rules are in Notification 59/2025-Customs (N.T.) of 29 Sep 2025. Goods from Switzerland, Norway, Iceland or Liechtenstein need an approved exporter's origin declaration or an EUR.1 certificate, valid for 12 months.

Rule 14 of the TEPA rules lists the proofs. Rule 15(4) allows a late proof only in exceptional circumstances. Rule 16 makes the importer keep proofs and related documents for five years from the date of preferential treatment. That matches CAROTAR rule 4.

Swiss customs confirms that only approved exporters may make out an origin declaration. Others use an EUR.1, with the six digit HS code and the origin criterion in box 8. See [BAZG Circular R-30 of 11 Aug 2025](https://www.bazg.admin.ch/dam/fr/sd-web/owg43YRAdZWp/circulaire-aele-inde-fr.pdf). The circular says declarations by Swiss approved exporters can be checked on the Swiss validator website, validator.admin.ch.

Verification under TEPA follows rule 18. Customs first asks the importer. It then writes to the EFTA authority, which acknowledges within 45 days and generally replies within 10 months. Our [India EFTA TEPA guide](/insights/india-efta-tepa-swiss-norwegian-companies) covers the tariff offer and the investment chapter.

## How does CAROTAR apply to imports from the UK under CETA?

The India UK CETA was signed on 24 Jul 2025 and entered into force on 15 Jul 2026. CBIC notified its origin rules in Notification 62/2026-Customs (N.T.) of 3 Jul 2026, in force from 15 Jul 2026. For imports into India, the only proof of origin is an origin declaration by the UK exporter or producer, valid for 12 months.

When this page first went up on 5 Mar 2026, the CETA was signed but not in force. UK goods paid standard duty then. The Government announced the 15 Jul 2026 start in [PIB release 2274280 of 17 Jun 2026](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2274280&reg=48&lang=2). [PIB release 2285085](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2285085&lang=1&reg=3) confirmed entry into force on 15 Jul 2026.

The notification sets out the Customs Tariff (Determination of Origin of Goods under Comprehensive Economic and Trade Agreement between India and the United Kingdom of Great Britain and Northern Ireland) Rules, 2026. These are the points an Indian importer will use.

| Point | CETA rule as notified in India | Rule |
|---|---|---|
| Proof for imports into India | Origin declaration by the exporter or producer only | 16(1)(b) |
| Form | In writing, including electronic form | 16(2)(d) |
| Validity | 12 months from completion | 16(2)(a) |
| Authentication | India authenticates an origin declaration before the importer claims the preference | 17(6) to 17(8) |
| Late claim and refund | Within one year of importation, unless domestic law allows longer | 21 |

The UK government says a UK exporter or producer must register with HMRC before it completes origin declarations. Without registration, the declarations are rejected ([UK Business Growth Service](https://www.business.gov.uk/export-from-uk/markets/india/trade-agreement/tariffs-and-customs-for-imports-from-and-exports-to-india/)). Whatever the CETA record rule, CAROTAR rule 4 asks the Indian importer to keep supporting documents for five years from the bill of entry.

UK groups should not assume every UK shipment qualifies. Goods made in the UK from non UK inputs must still meet the product specific rule. Our [UK India FTA guide](/insights/uk-india-free-trade-agreement-impact-on-businesses) covers the tariff side.

## What changed in 2025 and 2026

| Date | Before | After | Instrument |
|---|---|---|---|
| 18 Mar 2025 | CAROTAR spoke of a certificate of origin | CAROTAR speaks of a proof of origin, covering self declarations | Notification 14/2025-Customs (N.T.), G.S.R. 178(E) |
| 1 Oct 2025 | No EFTA preference | TEPA origin rules apply to goods from EFTA states | Notification 59/2025-Customs (N.T.) |
| 27 Jan 2026 | EU talks open | India EU FTA concluded; not in force | PIB 2219065 |
| 1 Jun 2026 | No Oman preference | India Oman CEPA origin rules apply | Notification 48/2026-Customs (N.T.) of 29 May 2026 |
| 15 Jul 2026 | UK goods at standard duty | CETA preference available with an origin declaration by the UK exporter | PIB 2285085; Notification 62/2026-Customs (N.T.) of 3 Jul 2026 |

## What has happened since

This page first went up on 5 Mar 2026. These events came after that date.

1. On 29 May 2026 CBIC notified the origin rules for the India Oman CEPA, signed on 18 Dec 2025, in Notification 48/2026-Customs (N.T.). The rules apply from 1 Jun 2026. Omani groups can read our [Oman to India company guide](/insights/company-registration-in-india-from-oman).
2. On 15 Jul 2026 the India UK CETA entered into force (PIB release 2285085). CBIC had notified its origin rules in Notification 62/2026-Customs (N.T.) of 3 Jul 2026.
3. On 11 Sep 2026 the European Commission proposed Council decisions on signing and concluding the India EU FTA. On 23 Oct 2026 it is not in force ([Commission EU India page](https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements_en)). Our [India EU FTA guide](/insights/india-eu-fta-european-companies-india) tracks it.

## Worked example

An Indian subsidiary imports industrial pumps from a related supplier in an FTA partner country. Assume the product specific rule requires a regional value content of at least 40 percent on the FOB value, using a build down method. The figures are illustrative.

Origin test:

1. FOB value of one pump: USD 1,000.
2. Value of non originating materials (motors and castings from a third country): USD 640.
3. Regional value content: (1,000 less 640) divided by 1,000 = 36 percent.
4. Result: 36 percent is below 40 percent, so the pump does not qualify.

The supplier sources castings locally instead. Non originating materials fall to USD 560. The regional value content becomes (1,000 less 560) divided by 1,000 = 44 percent. The pump now qualifies, but only from the first shipment made with the new inputs.

Cost of a denied claim. The subsidiary claimed 0 percent duty for two years on imports of INR 3,00,00,000 a year. Customs later finds the pumps did not qualify. Assume a standard basic customs duty of 10 percent, a Social Welfare Surcharge of 10 percent of basic duty, and IGST of 18 percent.

| Item | Per year (INR) | Two years (INR) |
|---|---|---|
| Basic customs duty at 10% | 30,00,000 | 60,00,000 |
| Social Welfare Surcharge at 10% of basic duty | 3,00,000 | 6,00,000 |
| IGST at 18% on the extra duty | 5,94,000 | 11,88,000 |
| Total short payment | 38,94,000 | 77,88,000 |

Interest under section 28AA runs on the short payment from the date each duty was due. The IGST element can usually be credited, but the basic duty and surcharge of INR 66,00,000 are a straight cost. If customs alleges wilful misstatement, section 114A adds a penalty equal to the duty, and the five year period in section 28 applies.

## Common mistakes

1. Treating the certificate of origin as the whole file. Fix: hold the Form I data behind it, as section 28DA(2) and rule 4 require.
2. Missing the 10 working day reply window. Fix: keep the origin file ready before import so a reply takes days, not weeks.
3. Using proof that has expired. Fix: record the validity date of each proof and refuse shipments with stale proof.
4. Entering the wrong tariff notification serial. Fix: check the serial for the line and year, since tranches change.
5. Not updating the calculation after an input change. Fix: rerun the product specific rule each time the bill of materials changes.
6. Assuming UAE or UK shipment means UAE or UK origin. Fix: test origin, not routing.
7. Keeping records for three years. Fix: keep them for five years from the bill of entry under rule 4.
8. Ignoring rule 7. Fix: when one claim fails, review every line from that exporter before the next shipment.

## Checklist

1. Identify the FTA, the tariff notification serial and the origin rules notification for each imported line.
2. Find the product specific rule for each line in the annexure to that origin rules notification.
3. Collect the supplier's bill of materials, cost data and process description.
4. Calculate the origin test and record it in a Form I file for each product.
5. Obtain the proof of origin the agreement allows, and check its validity date.
6. Brief the customs broker to declare origin and enter the proof details in the bill of entry.
7. Upload electronic certificates on eSanchit where the agreement uses them.
8. Store the Form I file and supporting papers for at least five years from each bill of entry.
9. Answer any rule 5 requisition within 10 working days, with documents, not a covering letter alone.
10. Repeat the origin test whenever an input, supplier or price changes.
11. Review transfer prices when FTA duty changes the landed cost of related party imports, using your [transfer pricing documentation](/insights/transfer-pricing-documentation-requirements-in-india).

Every importer also needs an Importer Exporter Code; see our [IEC guide](/insights/import-export-code-iec-registration-foreign-owned-company). If you need help building the origin file, our team handles IEC registration and customs set up for foreign owned importers.

## Key terms

- **Proof of origin**: The document an Indian importer produces to claim a preferential FTA duty rate. Section 28DA of the Customs Act, 1962 defines it as a certificate or declaration issued in accordance with a trade agreement. It may come from an authority in the exporting country or from an eligible exporter, as each agreement allows. (https://krystal7.com/glossary#proof-of-origin)
- **Form I (CAROTAR)**: The form in CAROTAR 2020 that lists the minimum origin information an importer must hold when claiming FTA duty. It covers the production process, the origin criterion claimed and, for goods not wholly obtained, the data that show the criterion is met. Rule 4 requires it. (https://krystal7.com/glossary#form-i)
- **Section 28DA of the Customs Act, 1962**: The section, inserted by the Finance Act, 2020, that sets the procedure for claiming a preferential duty rate under a trade agreement. It puts the burden of reasonable care on the importer and lets customs verify origin, suspend the preference and deny it. (https://krystal7.com/glossary#section-28da-of-the-customs-act-1962)
- **Product specific rule (PSR)**: The origin test set for a particular tariff heading or subheading in a trade agreement, such as a change in tariff heading, a cap on non originating materials or a specific process. In India the PSRs sit in an annexure to each FTA origin rules notification. (https://krystal7.com/glossary#product-specific-rule)
- **Regional value content (RVC)**: The share of a product's value that comes from the partner countries, used as an origin test in many of India's FTAs. Some agreements express the same test as a cap on the value of non originating materials instead. (https://krystal7.com/glossary#regional-value-content)
- **Cumulation**: A rule in a trade agreement that lets inputs originating in one partner count as originating when used in another partner's product. India's FTAs mostly allow bilateral cumulation, or cumulation among all parties where the partner is a bloc such as EFTA. (https://krystal7.com/glossary#cumulation)
- **Verification authority**: The authority in the exporting country that issued the proof of origin or checks it, and that answers Indian customs' verification requests under CAROTAR rule 6. On the Indian side, CBIC Circular 38/2020-Customs makes the Director of the International Customs Division the nodal point for these requests. (https://krystal7.com/glossary#verification-authority)

## Frequently Asked Questions

### What is CAROTAR 2020?

CAROTAR 2020 is the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, made under section 28DA of the Customs Act, 1962. It sets what an importer must declare, hold and produce when claiming any FTA duty rate in India. It also sets how customs asks for information, verifies origin and denies a claim.

### When did CAROTAR come into force?

CBIC notified CAROTAR as Notification 81/2020-Customs (N.T.), G.S.R. 521(E), on 21 Aug 2020. It came into force on 21 Sep 2020, after a 30 day period for importers to prepare, according to PIB release 1656254. Notification 14/2025-Customs (N.T.) of 18 Mar 2025 amended it to speak of a proof of origin.

### What is Form I under CAROTAR?

Form I lists the minimum origin information an importer must hold under rule 4 of CAROTAR 2020. It covers the production process, the origin criterion claimed and, for goods not wholly obtained, the data that support the criterion. The importer holds it before import and keeps supporting documents for five years from the bill of entry.

### Is a certificate of origin enough to claim FTA duty in India?

No. Section 28DA(2) of the Customs Act, 1962 says producing a proof of origin, such as a certificate, does not absolve the importer of reasonable care. The importer must also hold Form I information under CAROTAR rule 4. If customs asks, the importer must show how the goods meet the origin criteria within 10 working days.

### How long does an importer have to reply to a CAROTAR query?

The importer has 10 working days from the requisition to furnish the information, under rule 5(2) of CAROTAR 2020. If the officer is satisfied, it accepts the claim within 15 working days of receiving the reply. If not, it proposes verification with the exporting country under rule 6.

### How long must an importer keep origin records?

At least five years from the date of filing the bill of entry, under rule 4 of CAROTAR 2020. Some agreements set their own periods. The EFTA TEPA rules ask importers to keep proofs for five years. The EU FTA sets a three year minimum, but the CAROTAR five year rule still applies in India.

### Can customs deny an FTA claim without verification?

Yes, in four cases under rule 3(2) of CAROTAR and section 28DA(10). The proof of origin is incomplete. It carries an alteration the issuing authority has not authenticated. It was produced after its validity expired. Or the item is not eligible for the preference under the tariff notification.

### Can goods be cleared while verification is pending?

Yes. Customs may suspend the preferential rate during verification under rule 6(4). On the importer's request, it releases the goods provisionally under section 28DA(5). The security equals the difference between the standard and preferential duty. The Commissioner may ask for a deposit in the electronic ledger instead.

### How far back can customs verify an origin claim?

Under section 28DA(9) of the Customs Act, 1962, customs must send a verification request within five years from the claim. A trade agreement may set another period. Duty recovery then follows section 28, with a two year period, or five years for collusion, wilful misstatement or suppression.

### What is the difference between a certificate of origin and a proof of origin?

A certificate of origin is issued by an authority in the exporting country. A proof of origin also covers declarations by eligible exporters or producers. Notification 14/2025-Customs (N.T.) of 18 Mar 2025 changed CAROTAR to use proof of origin. Each trade agreement still decides which proof it accepts.

### Does CAROTAR apply to the India UK CETA?

Yes. The CETA entered into force on 15 Jul 2026, and CAROTAR applies to every preferential claim under any Indian trade agreement. The importer follows the CETA origin rules in Notification 62/2026-Customs (N.T.) and CAROTAR together. The proof is the UK exporter's origin declaration, valid 12 months. Where the two conflict, the CETA rules prevail under CAROTAR rule 8(3).

### What proof of origin is needed for imports from Switzerland under TEPA?

An origin declaration by an approved exporter or an EUR.1 movement certificate issued by Swiss customs. Both are valid for 12 months from completion under rule 14 of Notification 59/2025-Customs (N.T.). Only approved exporters may make origin declarations, according to Swiss customs circular R-30 of 11 Aug 2025.

### What happens to future imports after one claim fails?

Under CAROTAR rule 7, customs may deny the preference on identical goods from the same exporter until it changes its process. Under rule 8(1), an importer that missed the reply deadline faces assessment of later bills of entry under section 17(2). This lasts until it shows proper controls.

## Sources

- Press Information Bureau, Implementation of CAROTAR 2020 from 21 Sep 2020 (release 1656254), 18 Sep 2020, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1656254&reg=48&lang=2
- CBIC, Training presentation on section 28DA and CAROTAR 2020, Notification 81/2020-Customs (N.T.) and Circular 38/2020 (hosted by Bengaluru Customs), https://bangalorecustoms.gov.in/wp-content/uploads/2024/02/CAROTAR-221023-1.pdf
- Jawaharlal Nehru Custom House, Public Notice 114/2020 on section 28DA and CAROTAR, 10 Sep 2020, https://www.jawaharcustoms.gov.in/pdf/PN-2020/PN-114-2020.pdf
- CBIC, Notification 14/2025-Customs (N.T.), G.S.R. 178(E), CAROTAR Amendment Rules, 18 Mar 2025, Gazette of India, https://egazette.gov.in/
- CBIC, Customs Act, 1962 (text as on 30 Mar 2022, section 28DA), https://taxinformation.cbic.gov.in/content/html/tax_repository/customs/acts/1962_custom_act/documents/Customs_Act__1962_30-March-2022.html
- Finance (No. 2) Act, 2024, section 100 (amendment of section 28DA of the Customs Act, 1962), India Code, https://www.indiacode.nic.in/
- CBIC, Notification 59/2025-Customs (N.T.), TEPA origin rules, 29 Sep 2025, in force 1 Oct 2025, Gazette of India; listed on CBIC's tax information portal, https://taxinformation.cbic.gov.in/
- CBIC, Notification 48/2026-Customs (N.T.), India Oman CEPA origin rules, 29 May 2026, in force 1 Jun 2026, Gazette of India, https://egazette.gov.in/
- CBIC, Notification 62/2026-Customs (N.T.), India UK CETA origin rules, 3 Jul 2026, in force 15 Jul 2026, Gazette of India, https://egazette.gov.in/
- Press Information Bureau, India UK CETA and Agreement on Social Security enter into force (release 2285085), 15 Jul 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2285085&lang=1&reg=3
- UK Department for Business and Trade, Business Growth Service, Tariffs and customs for imports from and exports to India, accessed 23 Oct 2026, https://www.business.gov.uk/export-from-uk/markets/india/trade-agreement/tariffs-and-customs-for-imports-from-and-exports-to-india/
- DGFT, Appendix 2A, List of FTAs and PTAs (India UAE CEPA and India Australia ECTA entries, Notifications 22/2022-Customs and 62/2022-Customs), https://content.dgft.gov.in/Website/dgftprod/7e068bbe-3085-44d3-a3c4-0caefbdde751/Appendix%202A_new.pdf
- DGFT, Common Digital Platform for Certificates of Origin, relevant documents (UAE CEPA from 1 May 2022; Australia ECTA from 29 Dec 2022), https://coo.dgft.gov.in/front/relevant-documents
- Federal Office for Customs and Border Security (Switzerland), Circular R-30 on the EFTA India agreement, 11 Aug 2025, https://www.bazg.admin.ch/dam/fr/sd-web/owg43YRAdZWp/circulaire-aele-inde-fr.pdf
- Press Information Bureau, India EFTA TEPA to come into effect on 1 Oct 2025 (release 2173138), 30 Sep 2025, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2173138&reg=48&lang=2
- Press Information Bureau, India UK CETA to enter into force on 15 Jul 2026 (release 2274280), 17 Jun 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2274280&reg=48&lang=2
- Press Information Bureau, India's achievements in FTAs for 2025-26 (release 2236134), 6 Mar 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2236134&reg=3&lang=1
- Ministry of Commerce and Industry, India's Free Trade Agreements (2025-26) key highlights, March 2026, https://www.commerce.gov.in/files/2026-03/FTAs%20achievement%20v6%205%20pm.pdf
- Ministry of Commerce and Industry, EU India FTA Chapter 3 Rules of Origin (text for information), February 2026, https://www.commerce.gov.in/wp-content/uploads/2026/02/3.-Chapter-3-Rules-of-Origin.pdf
- European Commission, EU India agreements page, accessed 23 Oct 2026, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements_en
- CBIC, Instruction 19/2022-Customs (17 Aug 2022) and Instruction 10/2023-Customs (10 Mar 2023), as cited in the CBIC training presentation
- CBIC, Notification 22/2022-Customs, India UAE CEPA tariff concessions, 30 Apr 2022, as cited in DGFT Appendix 2A

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