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.
The SAFTA rules of origin decide which goods are eligible for preferential treatment when traded between the South Asian Association for Regional Cooperation member states that are parties to the agreement. India's rules were made by Notification No. 75/2006 (N.T.) dated 30 June 2006 and came into force on 1 July 2006. This article explains the structure of the seventeen rules and their operational certification annexure: the origin criteria, the printed percentages, cumulation, the special treatment of least developed states, direct consignment and the certificate of origin.
This article reads the rules as amended up to Notification No. 27/2013-Customs (N.T.) dated 1 March 2013, which substituted the list of member states in rule 1(1) (CBIC text; no later amendment found in CBIC's 2023-2026 lists). Later notifications should be checked before you rely on the current text.
Products are eligible if they are wholly produced or obtained in the exporting contracting state (rule 5) or, if not, they have a four-digit heading change and the value of non-originating materials is not more than 60 per cent of FOB value, with the final process in the exporting state (rule 8). Regional cumulation needs an aggregate content of at least 50 per cent and a domestic value content of at least 20 per cent of FOB value (rule 9). Least developed contracting states get 10 percentage points and Sri Lanka 5 (rule 10). The certificate is valid for 12 months (Annex-B).
What the rules are and who they cover
The rules are made under the Customs Tariff Act, 1975 and are called the Rules of Determination of Origin of Goods under the SAFTA agreement. Rule 1(1) lists the SAARC member states as Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan, the last three names having been substituted in 2013. Rule 2 applies the rules to products eligible for preferential treatment under SAFTA. Rule 3 says no product is deemed the produce or manufacture of any contracting state unless the conditions are met to the satisfaction of the designated authority. The rules print no tariff concession or duty rate.
India also has bilateral origin rules with some of these states; see our overviews of the India-Sri Lanka trade agreement rules of origin and the India-Afghanistan preferential trade agreement rules of origin. On the Indian import side, preferential claims follow the customs procedure in our articles on Rules 1 to 4 of the CAROTAR and Rules 5 to 8 of the CAROTAR. New exporters need an Importer-Exporter Code, and our IEC registration service can help.
Origin criteria (rules 4 to 8)
Rule 4: originating products
Products covered by the agreement and consigned directly within the meaning of rule 12 are eligible for preferential treatment if they are wholly produced or obtained in the exporting contracting state (rule 5) or not wholly produced or obtained but eligible under rule 6.
Rule 5: wholly produced or obtained
These include raw or mineral products from the soil, water up to the Exclusive Economic Zone or seabed up to the continental shelf; agriculture, vegetable and forestry products harvested there; animals born and raised there and their products; products of hunting or fishing; sea products from the high seas by the state's vessels and goods made on board its factory ships from them; raw materials recovered from used articles collected there; waste and scrap from manufacturing there; products from the seabed beyond national jurisdiction where the state has exclusive rights; and goods produced exclusively from these. A footnote defines "vessels" with equity conditions of at least 60 per cent owned by citizens or governments of the state, or 75 per cent by citizens and governments of the contracting states.
Rule 6: not wholly produced or obtained
These products are subject to rule 7 (non-qualifying operations) and any of the conditions in rule 8, rule 9 or rule 10.
Rule 7: non-qualifying operations
Whether or not there is a change of heading, the following are insufficient: preservation operations, simple removal of dust, sifting, sorting, washing, painting and cutting up, changes of packing, simple slicing and repacking, affixing marks and labels, simple mixing and mere dilution, simple assembly, and any combination.
Rule 8: single contracting state content
Products originating in the exporting state are sufficiently worked if:
- (i) the final product is classified in a heading at the four-digit level different from those of all the non-originating materials; and
- (ii) the total value of materials, parts or produce from other countries or of undetermined origin does not exceed 60 per cent of the FOB value, and the final process of manufacture is performed in the exporting state.
Products listed in Annex-A are eligible if they comply with rule 8(a) or the condition shown for them in Annex-A. This article does not list the Annex-A product-specific rules; read the entry for your product.
Cumulation and special treatment (rules 9 to 11)
| Rule | What it says |
|---|---|
| 9 Regional cumulation | Products worked on or processed in a contracting state using inputs originating in any contracting state are eligible if (a) the aggregate content is not less than 50 per cent of FOB value, (b) the domestic value content of the exporting state is not less than 20 per cent of FOB value, and (c) the final product has a four-digit change as in rule 8(a)(i), or a six-digit change as agreed in the Product Specific Rules |
| 10 Least developed contracting states | A favourable 10 percentage points applied to the percentage in rule 8; products originating in Sri Lanka get a favourable 5 percentage points |
| 11 Valuation | Non-originating materials are valued at CIF on importation where it can be proven, or at the earliest ascertainable price for materials of undetermined origin; the origin of power and fuel, plant and equipment, machines and tools need not be established |
Direct consignment, packing and procedures (rules 12 to 14)
Rule 12, direct consignment: goods are directly consigned if transported without passing through a non-contracting state, or through one or more such states with or without transshipment or temporary storage, provided the transit is justified for geographical reasons or transport requirements, the goods have not entered trade or consumption, have undergone only unloading, reloading or operations to keep them in good condition, and have remained under customs control in the transit country.
Rule 13, packing: packing is considered as forming a whole with the product it contains, but may be treated separately if national legislation requires.
Rule 14 refers to the detailed Operational Certification Procedures in Annex-B.
The certificate of origin (Annex-B)
Our guide on how to get a certificate of origin in India covers the Indian issuing side. Annex-B provides, among other things:
- the issuing authority may carry out pre-exportation verification of the manufacturing premises on written request;
- the certificate is valid for 12 months from issue, on ISO A4 paper in English, with a light orange original and white duplicate, and the issuing authority sends information on certificates issued electronically on a weekly basis to the importing state's authority;
- the certificate shows the applicable rule of origin and the non-originating material or aggregate content as a percentage of FOB value in Box 8;
- it is issued at the time of exportation or within 3 working days of shipment; in exceptional cases it may be issued retrospectively, marked "ISSUED RETROSPECTIVELY" in Box 4, but no longer than 45 days from shipment;
- a certified true copy is available within the validity period for loss, theft or destruction;
- the original is submitted when lodging the import entry, within validity, with late acceptance for force majeure or other valid causes, or where the goods were imported before expiry;
- minor discrepancies do not invalidate the certificate;
- the importing state may request a retrospective check at random or on reasonable doubt, and the issuing authority responds within three months. Preferential treatment may be suspended while awaiting the result, but customs clearance is not to be suspended against security preserving fiscal interests;
- issuing authorities keep applications and documents for not less than two years;
- for transit through non-contracting states, a through bill of lading or airway bill, the certificate, the commercial invoice and supporting documents are produced.
Prohibitions, cooperation and review (rules 15 to 17)
Rule 15: any contracting state may prohibit importation of products containing inputs originating from states with which it has no economic and commercial relations. Rule 16: the states co-operate to specify the origin of inputs in the certificate, take measures against circumvention through false declarations or falsified documents, co-operate in joint plant visits and consult on request. Rule 17: the rules may be reviewed on the request of any contracting state and modified as agreed by the ministerial council.
A practical example
Everest Garments Pvt Ltd exports clothing to a contracting state. It imports fabric from outside South Asia worth 50 per cent of the FOB price, and the clothing is classified in a different four-digit heading from the fabric. Under rule 8(a) both limbs are met (50 per cent is within the 60 per cent limit). It obtains the certificate at the time of export, indicates the rule and percentage in Box 8 and keeps its papers ready for a retrospective check.
Need help with South Asia trade?
Reading Annex-A, applying the special margins for least developed states and Sri Lanka, and handling a retrospective check are separate tasks. Our IEC registration team can help you set up before you claim a SAFTA preference. For related rules, see the LDC DFTP scheme rules of origin and the India-Sri Lanka trade agreement rules of origin.
Key takeaways
- Two routes: wholly produced or obtained (rule 5), or rule 8 (four-digit change plus a 60 per cent limit), or Annex-A.
- Regional cumulation needs 50 per cent aggregate and 20 per cent domestic value content (rule 9).
- Least developed states get 10 percentage points; Sri Lanka gets 5 (rule 10).
- The certificate is valid for 12 months and issued within 3 working days of shipment; retrospective issue is capped at 45 days.
- Retrospective check replies are due in three months; records are kept for two years.
Read next
- Rules of origin under the India-Sri Lanka trade agreement
- Rules of origin under the India-Afghanistan preferential trade agreement
- Rules of origin for least developed countries under India's DFTP scheme
- How to get a certificate of origin in India
Disclaimer: Based on the Rules of Determination of Origin of Goods under the Agreement on SAFTA 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.