Budget 2024 decoded: Imports under FTAs made easy with self-certification

New Delhi: In a move to make imports easier under free trade agreements (FTA), the government has proposed to accept self-certification to prove the origin of such goods. At present, a certificate of origin is issued for meeting the source criteria of imports which is crucial for customs clearance and determine the duties that have to be paid.An amendment in the Customs Act in Budget FY25 aims to replace the word “certificate” with “proof”. The proof of origin means a certificate or declaration issued in accordance with a trade agreement certifying or declaring, as the case may be, that the goods fulfil the country of origin criteria and other requirements specified in the said agreement, according to the Budget documents.

“The idea is basically to align this with FTAs as we now also accept self-certification. It is basically to enable self-certification,” revenue secretary Sanjay Malhotra told ET, explaining the rationale behind the move.

Amendment in section 28DA of the Customs Act will enable the acceptance of different types of proof of origin provided in trade agreements to align the provision with new trade agreements which provide for self-certification.

“After our issues with China, the certificates of origin were under tight scrutiny. Now, that has been changed to proof which will promote ease of doing business,” said a person aware of the change.The simplification in the norms comes after industry, especially the electronics sector, sought an easier declaration process and fears that Chinese imports were making their way into the country through other countries, especially the ones India has FTAs with.”Allowing the acceptance of self declaration and other forms of proof of origin will help quicker clearance of cargo leading to ease of doing business,” said Bipin Sapra, partner, EY India.As per the amendment, the Issuing Authority means an authority or person designated for the purposes of issuing proof of origin under a trade agreement.

India’s overall goods imports in FY24 were $675.4 billion as against $437.11 billion in FY23.