Rules of origin and CAROTAR 2020 for Indian imports and FTA claims

What CAROTAR is and when it applies

Every Indian free trade agreement has its own rules of origin: the conditions a product must meet to count as made in the partner country, such as a minimum value added or a change of tariff heading. Until 2020 an importer in India mostly relied on the certificate of origin issued in the exporting country. The Finance Act, 2020 added Chapter VAA and Section 28DA to the Customs Act, 1962, and CBIC then made the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, known as CAROTAR.

CAROTAR does not change the rules of origin in any agreement. It sets out how an importer claims them and how customs checks the claim.

What to declare at the bill of entry

Rule 3 lists what the importer, or the customs broker acting for it, must do when filing the bill of entry for a preferential claim. The bill of entry formats were amended to add these fields from 21 September 2020.

A claim can be denied without further verification when the certificate of origin is incomplete or not in the prescribed format, carries alterations not authenticated by the issuing authority, is produced after its validity has expired, or is issued for goods that are not eligible for preference under that agreement. The certificate is then marked “INAPPLICABLE” (Rule 3(2)).

What you must hold: Rule 4 and Form I

Rule 4 is the heart of CAROTAR. An importer claiming preference must:

1. Possess the origin information set out in Form I before importing, showing how the goods meet the origin criterion.
2. Exercise reasonable care over the accuracy and truthfulness of that information and the supporting documents.
3. Keep the supporting documents for at least five years from the date of filing the bill of entry.
4. Produce the information to the proper officer on request.

Form I is a guide to the right questions for your supplier. It is not filed with every bill of entry, and CBIC’s own guidance states that CAROTAR does not require an importer to obtain the exporter’s costing details. In practice, ask the exporter:

• Which origin criterion applies? Wholly obtained, or produced from non-originating materials under a value-content rule, a change in tariff classification or a process rule.
• Is that criterion valid for this heading? Check the product-specific rule in the agreement for the HS code.
• Which inputs are non-originating? A short bill of materials showing input origins answers most questions.
• Was cumulation used, and were the goods shipped directly? Both must match the certificate.

For identical goods from the same exporter, the inquiry does not need repeating for each shipment unless the manufacturing process changes, but the information should be compiled for each bill of entry.

When customs asks questions: the timelines

If an officer has reason to believe the origin criterion has not been met, CAROTAR sets a clear sequence.

While a verification started at clearance is pending, preferential treatment can be suspended. On the importer’s request, the goods can be provisionally assessed and cleared against a security equal to the difference between the provisional duty and the preferential duty (Rule 6(4)). If goods from an exporter or producer are found not to meet the origin criterion, other claims for identical goods from the same exporter or producer can be rejected without further verification (Rule 7), until the exporter shows the origin conditions have been put right.

Worked example: a value-content claim

A checklist for importers in India

1. Confirm the rule for each HS code in the agreement, before you order.
2. Check the certificate on arrival: format, validity date, HS code, origin criterion, signatures and seals.
3. Collect the Form I information from the supplier for each product, and refresh it when the process or inputs change.
4. Brief your customs broker to complete every origin field in the bill of entry.
5. File the evidence per bill of entry and keep it for at least five years.
6. Answer inquiries within 10 working days, with the file ready to send.

Buying Indian goods: how UK, EFTA and EU importers prove origin

India’s newer agreements also shape what overseas buyers of Indian goods must hold.

United Kingdom. The India–UK Comprehensive Economic and Trade Agreement (CETA) entered into force on 15 July 2026. Under Article 3.15, a UK importer can claim preference on the basis of:

• an origin declaration completed by the exporter or producer;
• a certificate of origin issued by an Indian issuing authority; or
• the importer’s knowledge that the goods are originating, backed by documents that demonstrate it.

An origin declaration or certificate is valid for 12 months, must be in English and must be accompanied by an invoice or other commercial document that identifies the goods. For the UK, one proof can cover multiple shipments of identical goods over a period of up to 12 months. The UK can grant preference without a proof of origin for imports with a customs value up to GBP 1,000 where it has no reasonable doubt about the declaration. The UK importer keeps the import documents and origin records for at least four years from importation; the Indian exporter or producer keeps its records for five years (Article 3.24). In the other direction, Indian importers of UK goods claim preference on an origin declaration completed by the UK exporter or producer.

EFTA (Switzerland, Norway, Iceland, Liechtenstein). The India–EFTA Trade and Economic Partnership Agreement (TEPA) entered into force on 1 October 2025. For goods originating in India, the proof of origin is a certificate of origin issued by India’s authorised agencies or a self-declared certificate of origin issued by an Indian exporter (Annex 2.A, Article 13). Proofs are valid for 12 months, and the importer keeps them with the other relevant documents for five years from the date preference was granted.

European Union. The EU and India concluded negotiations on their FTA on 27 January 2026, but the agreement applies only once it is signed and enters into force. Until then, any preference on Indian goods into the EU comes from the EU’s Generalised Scheme of Preferences where India still benefits for the product, claimed on a statement on origin from an exporter registered in the EU’s Registered Exporter (REX) system.

For each agreement, the claim is only as strong as the supplier’s evidence behind it. Our FTA duty-saver audit maps the rule of origin for each HS line and checks your supplier’s origin file, and an origin dossier documents the bill of materials, input origins and processes at the factory. The HS code finder is a quick first step to the right heading.