India–UK FTA: Coequal norms to ease exports; safeguards added to curb misuse
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The draft India–UK Free Trade Agreement (FTA) has introduced a first-of-its-kind 'coequal' rule under product-specific origin norms.
This move is aimed at offering producers greater flexibility while ensuring stricter checks against misuse of tariff concessions, ET reported citing people familiar with the matter.
Under this provision, producers can qualify for FTA benefits by meeting any one of the multiple origin criteria, including wholly-obtained norms, value-add thresholds, or tariff transformation.
This is a significant departure from India's earlier FTAs, which typically relied on a single rule of origin criterion.
'This deal secures rules of origin to facilitate improved access to both sides. Co-equal rules will allow a producer of a good to meet any of the criteria of origin to claim benefit under the FTA,' said a person involved in the discussions, according to ET.
Experts said the product-specific origin norms, aligned with complex global value chains, are essential to prevent circumvention and dumping of low-quality goods. 'These rules help mitigate any misuse of duty concessions given by India,' said Bipin Sapra as, partner at EY, as cited by ET.
The agreement also includes the digital exchange of certificates of origin on a self-certification basis for the first time in any Indian FTA.
This, coupled with robust compliance checks, is expected to streamline processes and bolster enforcement. 'If risk parameters find an issue in a product, then checks will be carried out,' another official said.
The India–UK FTA was concluded on May 6 and is expected to be formally signed soon. Once ratified by both governments, the agreement will come into force. India has stated that 99% of its exports to the UK will enjoy zero-duty access, particularly boosting labour-intensive sectors such as textiles, marine products, leather, toys, and auto parts.
The UK has committed to reducing tariffs on 90% of product lines, with 85% becoming fully duty-free over the next decade.
The agreement also sets the tone for similar coequal origin rules in the ongoing India–EU FTA talks, where Europe has suggested rules specific to textile inputs such as spun yarn.
With global apparel trade expected to touch $2.37 trillion by 2030, and India's home textiles and composites markets growing rapidly, the FTA's flexible yet robust rules are expected to play a critical role in boosting India's competitiveness and safeguarding its domestic interests.
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