Rules of origin explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
India's scheme of preferential tariff treatment for least developed countries has its own rules of origin. They decide which products imported into India from a beneficiary country qualify for the preferential tariff under the scheme. The rules were made by Notification No. 29/2015-Customs (N.T.) dated 10 March 2015, under section 5(1) of the Customs Tariff Act, 1975, and superseded the 2008 rules for the scheme, except for things done or omitted before the supersession. The scheme's official name is abbreviated in this article as the DFTP scheme.
This article reads the rules as amended up to Notification No. 29/2015-Customs (N.T.) dated 10 March 2015, the notification that made them (CBIC text; no amendment found in CBIC's 2023-2026 lists). Later notifications should be checked before you rely on the current text.
A product is originating if it is wholly obtained or produced in the exporting beneficiary country (rule 4) or if non-originating materials are not more than seventy per cent of its FOB or ex-works value (local value added content of at least thirty per cent), it has a six-digit sub-heading change and the final process is in the beneficiary country (rule 5). The certificate of origin is valid for one year (rule 16). India may suspend the preference for fraud, irregularities, systematic non-compliance or import surges (rule 24).
What the rules are and who they cover
Rule 2 defines a "beneficiary country" as a country notified in the Schedule to the customs notification of 13 August 2008 on the scheme, as amended from time to time, and "preferential tariff" as the customs duty rate applicable to an originating product under that notification when imported into India. These rules print no tariff concession or duty rate. They define the "issuing authority" as the government authority in the beneficiary country responsible for issuing certificates of origin and, in the case of India, the Export Inspection Council. Rule 3 says products are deemed to have originated, and are eligible for preferential tariff treatment, if they are consigned according to rule 10 and are wholly obtained or produced (rule 4) or not wholly obtained but eligible under rule 5.
These rules sit alongside the regional rules for South Asia; see our overviews of the SAFTA rules of origin. The importing country is India, so a claim is made to Indian customs under the procedure explained in our articles on Rules 1 to 4 of the CAROTAR and Rules 5 to 8 of the CAROTAR. Importers who are new to trade can start with an Importer-Exporter Code through our IEC registration service.
The origin criteria (rules 3 to 7)
Rule 4: wholly obtained or produced
These include raw or mineral products, including mineral fuels, lubricants and ores, extracted from the territory; plants and plant products grown or harvested there; live animals born and raised there and their products; products of hunting, trapping, fishing or aquaculture; sea-fishing products taken from outside territorial waters and the exclusive economic zone by vessels registered and flying the flag of the beneficiary country; products made on board its factory ships exclusively from that catch; scrap and waste from manufacturing there; used articles collected there fit only for disposal or recovery; seabed products beyond its territory where it has exploitation rights under the United Nations Convention on the Law of the Sea; and products made exclusively from these.
Rule 5: not wholly obtained or produced
All three conditions of rule 5(1) must be met:
- (a) the total value of non-originating materials used does not exceed seventy per cent of the FOB value or ex-works value of the product, that is, the local value added content is at least thirty per cent;
- (b) the product has undergone a change in tariff classification at the six-digit sub-heading level of the Harmonized System from the classification of the non-originating materials; and
- (c) the final process of manufacture is performed within the territory of the exporting beneficiary country.
Rule 5(2) gives the two formulas: FOB value less the value of non-originating materials, divided by FOB value, multiplied by 100, or the same with ex-works value, with a result of not less than 30 per cent. Non-originating materials are valued at CIF where their origin is a country other than the beneficiary country or India, or, if origin cannot be determined, at the earliest price paid in the beneficiary country where the working or processing takes place. Duties and taxes paid in the beneficiary country or in both countries are not included. Costs are recorded under generally accepted accounting principles.
Rule 6 and rule 7
Rule 6, non-qualifying operations: preservation, simple removal of dust, sifting, sorting, washing, painting and cutting, changes of packing, simple cutting and repacking, affixing marks and labels, simple mixing, simple assembly or disassembly or packing, slaughter, mere dilution and any combination do not satisfy rule 5. All operations in the beneficiary country on a product are considered together, and "simple mixing" excludes a chemical reaction.
Rule 7, accumulation: where an originating material from India is incorporated in production in the beneficiary country, that material is considered to originate in the beneficiary country.
| Condition | Rule | As printed |
|---|---|---|
| Wholly obtained or produced | 4 | Listed products |
| Non-originating content | 5(1)(a) | Not above seventy per cent of FOB or ex-works value |
| Local value added content | 5(1)(a), (2) | At least thirty per cent |
| Tariff change | 5(1)(b) | Six-digit sub-heading level |
| Final process | 5(1)(c) | In the exporting beneficiary country |
| Accumulation | 7 | Originating Indian material counts as originating in the beneficiary country |
Packing and direct consignment (rules 8 to 10)
Rules 8 and 9: retail packaging classified with the product is ignored for the tariff-change test but counted in the local value added content; shipment packing is ignored for both.
Rule 10, direct consignment: products are directly consigned if transported without passing through another country, or through intermediate countries with or without transshipment or temporary storage, where the transit is justified for geographical reasons or transport requirements, the products have not entered trade or consumption there, have undergone only unloading, reloading or operations to keep them in good condition, and have remained under customs control. To claim preference on this basis, a through bill of lading issued in the exporting country, the certificate of origin, a copy of the original commercial invoice and supporting documents are produced to Indian customs at the time of importation.
Competent authorities, application and certificate (rules 11 to 19)
- Rule 11 and 12: each beneficiary country notifies its issuing authority, and provides names and addresses of officials authorised to sign certificates, with original sets of specimen signatures and seals, to the Director (International Customs) at CBIC named in Annexure A.
- Rule 13: an exporter or producer applies to the issuing authority in the format in Annexure B.
- Rule 14: the issuing authority examines each application for completeness, makes reasonable checks on origin and checks statements against the supporting documents; it may take up pre-export verification.
- Rule 15, issuance: the certificate follows the Annexure C format on ISO A4 paper in English, carries a unique serial number and the relevant rules and local value added content percentage, and has an original and three copies. It is issued at the time of exportation or within seven working days of shipment. In exceptional cases it may be issued retrospectively, marked "ISSUED RETROSPECTIVELY" in Box 4, but not later than one month from the date of shipment, with reasons recorded. A certified true copy is available for loss, theft or destruction, issued not later than one year from the original. Our guide on how to get a certificate of origin in India explains the Indian issuing side.
- Rule 16, validity: the certificate is valid for one year from issue. Multiple items on one invoice and certificate are allowed if each qualifies separately, and the ineligibility of one item does not delay the others.
- Rule 17, presentation: the original is submitted to Indian customs when lodging the import declaration, except for a retrospective certificate, where the claim is granted subject to Indian law. Late submission is accepted for force majeure or other valid reasons beyond the exporter's control, and in all cases if the products were imported before expiry. Customs may ask the importer for information.
- Rule 18 and 19: minor discrepancies do not invalidate a certificate; a change of destination is handled by endorsement or amendment.
Verification, denial and suspension (rules 20 to 24)
Rule 20, verification: where there is reasonable doubt, or at random, CBIC may request the issuing authority for a retroactive check, with the certificate, invoice and bill of lading or airway bill, and may send a questionnaire. The product may be released against administrative measures including security. The issuing authority transmits its results within fifteen days (authenticity of seal and signatures), thirty days (copy of the exporter's or producer's application) or three months (suspected inaccuracy of the origin information). If India is not satisfied, it may conduct a verification visit: it first sends a written request to the issuing authority naming the exporter or producer, the proposed dates and the officials, the issuing authority conveys written consent within thirty days, and the visit is carried out within sixty days of the consent. A written determination goes to the importer and the issuing authority.
Rule 21, denial: the preference may be denied where the product does not meet the rules, compliance is not demonstrated, access to records is denied, the issuing authority fails to provide information, consent to a visit is not received, or the information is insufficient. A rejected original certificate is returned to the issuing authority within a reasonable period not exceeding two months, with the grounds communicated.
Rule 22 and 23: the issuing authority retains applications and documents for not less than five years; it co-operates with Indian authorities in penal action for suspected fraud.
Rule 24, suspension: the Government of India may suspend the tariff preference for all or certain products from a beneficiary country where there is sufficient evidence of fraud, irregularities or systematic failure to comply, or where imports under the rules significantly exceed the usual levels of production and export capacity. Reasons are communicated within fifteen days, the beneficiary country may request consultations, and the matter is resolved by restoring the benefit retrospectively or prospectively or denying it.
A practical example
Highland Garments, an exporter in a beneficiary country, ships shirts to India. Imported fabric from a third country is 60 per cent of the FOB value, the shirts show a six-digit sub-heading change, and the final stitching is done at home. All three conditions of rule 5(1) are met. The issuing authority issues the certificate within seven working days of shipment, and the Indian importer produces the original at the time of the import declaration, within the one-year validity.
Need help with imports from least developed countries?
Checking a supplier's certificate against rules 15 to 17, preparing for a retroactive check and understanding how suspension under rule 24 might affect your imports are tasks for planning in advance. Our IEC registration team can help you set up as an importer. For related rules, see the SAFTA rules of origin and the legacy SAPTA and Other Preferential Areas rules.
Key takeaways
- Two routes: wholly obtained or produced (rule 4) or all three conditions of rule 5.
- The local value added content must be at least thirty per cent, with a six-digit sub-heading change.
- Originating Indian material counts as originating in the beneficiary country (rule 7).
- The certificate is valid for one year; issued at export or within seven working days; retrospective issue is capped at one month.
- Retroactive check replies are due in fifteen days, thirty days or three months.
- India may suspend the preference for fraud, systematic non-compliance or import surges (rule 24).
Read next
- Rules of origin under SAFTA
- Legacy origin rules: SAARC SAPTA 1995 and Other Preferential Areas 1977
- Rules 5-8 of the CAROTAR, 2020: verification and denial of preference
- How to get a certificate of origin in India
Disclaimer: Based on the Customs Tariff (Determination of Origin of Products under the DFTP Scheme for Least Developed Countries) Rules, 2015 as published on the CBIC Tax Information Portal, as consulted on 3 October 2026. Later notifications, duty notifications and the Customs Tariff Act, 1975 should be checked. This article is general information, not legal advice; check the official text before acting.