The Directorate General of Foreign Trade (DGFT) has initiated a formal stakeholder consultation on a proposed regulatory framework for Non-Preferential Rules of Origin (NPRoO). Released on September 16, 2026, the consultation paper proposes standardized, legally binding criteria to determine the origin of goods imported into or exported from India under Most-Favoured-Nation (MFN) terms. Crucially, these proposals are not yet operative law: current non-preferential Certificate of Origin (e-CoO) procedures and export documentation remain fully valid while the government gathers industry feedback.
What Has DGFT Proposed?
Historically, India has regulated preferential origin stringently under Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs), reinforced by customs verification under CAROTAR 2020. However, non-preferential trade—which covers all goods traded outside preferential tariff concessions—has largely relied on general declarations and administrative trade notices without codified, product-specific substantial transformation benchmarks.
The newly published consultation paper seeks to establish a structured statutory baseline under the Foreign Trade (Development and Regulation) Act. The draft framework divides all goods into two fundamental categories:
- Wholly Obtained Products: Goods extracted, harvested, or produced entirely within India without foreign inputs, such as raw minerals, agricultural harvests, and live animals.
- Substantially Transformed Products: Manufactured or processed goods incorporating imported materials. To qualify as Indian-origin, non-originating inputs must undergo sufficient processing defined by a Change in Tariff Classification (CTC)—typically at the 4-digit Harmonised System (HS) Heading or 6-digit Sub-Heading level—or satisfy a defined minimum threshold of local Value Addition (VA).
Preferential vs. Non-Preferential Origin: The Critical Distinction
Exporters and compliance officers frequently conflate preferential and non-preferential origin rules. They serve distinct legal and commercial purposes:
| Dimension | Preferential Rules of Origin | Non-Preferential Rules of Origin |
|---|---|---|
| Primary Purpose | Claiming concessional or zero customs duties under bilateral FTAs (e.g., India-UAE CEPA, India-Australia ECTA). | Determining national origin for standard MFN trade, trade defense measures, and origin labelling. |
| Legal Enforcement | Customs Act Section 28DA and Customs (CAROTAR) Rules, 2020. | Foreign Trade Policy (FTP) and proposed DGFT Non-Preferential Regulations. |
| Key Application | Tariff preference eligibility at destination customs. | Anti-dumping duties, safeguard actions, trade embargoes, and government procurement rules. |
Immediate Impact on Exporters and the e-CoO Portal
A primary point of industry confusion is whether ongoing shipments require immediate documentation changes. They do not.
The DGFT Trade Notice clarifies that the draft framework is purely consultative. The electronic Certificate of Origin (e-CoO) portal operates under existing guidelines. Exporters, customs house agents (CHAs), and authorized issuing agencies (such as FIEO, local Chambers of Commerce, and Export Promotion Councils) should continue issuing non-preferential certificates using standard self-certification and commercial invoicing until a final Public Notice is gazetted.
Why the Government Is Codifying Non-Preferential Origin
The initiative addresses three core enforcement challenges:
- Tackling Anti-Dumping Circumvention: Regulators have observed foreign goods subject to trade defense duties routed through third countries with minimal processing to claim third-country origin. Codified CTC and value-addition metrics give authorities unambiguous legal grounds to assess circumvention.
- Strengthening Import Monitoring: Standardized rules ensure that goods entering India under MFN rates are correctly attributed to their true manufacturing source, preventing misdeclaration at ports of entry.
- Aligning with WTO Standards: The WTO Agreement on Rules of Origin calls on member states to ensure that non-preferential origin rules are transparent, objective, predictable, and do not create unnecessary obstacles to trade.
How Stakeholders Can Submit Feedback
DGFT has opened a formal feedback window inviting representations from exporters, manufacturers, trade associations, and legal professionals. Stakeholders should conduct a bill-of-materials (BOM) review across key export and import tariff lines to identify where proposed CTC shifts or value-addition percentages may disrupt current operations.
Written comments, formatted according to the template attached to the DGFT Trade Notice, must be submitted electronically to the designated DGFT division within the consultation period. Submissions should cite specific 8-digit HS codes, production processes, and verifiable cost structures to substantiate requested adjustments.
What Happens Next
Following the conclusion of the consultation window, DGFT and the Department of Commerce will evaluate industry submissions before finalizing the rules. Once approved, the revised norms will be formally notified through an amendment to the Foreign Trade Policy handbook, accompanied by digital configuration updates on the DGFT e-CoO platform. Exporters should monitor official DGFT announcements for the publication of the final gazette notification.
