ECONOMY
Government notifies Rules of Origin for goods traded under India-UK CETA
- IBJ Bureau
- Jul 06, 2026
The India-UK Free Trade Agreement (FTA) has pegged the minimum local value addition level for manufactured products between 35 and 55 per cent to qualify for lower duties, depending on where the value of the finished product is calculated.
For agricultural products, largely local origin would be insisted upon.
The Central Board of Indirect Taxes and Customs (CBIC) has notified the minimum local value-added requirement under the Rules of Origin.
These norms will apply to different products traded between India and the UK at concessional duties once their Comprehensive Economic and Trade Agreement (CETA) becomes operational.
The Customs Tariff (Determination of Origin of Goods under CETA between India and the United Kingdom of Great Britain and Northern Ireland) Rules, 2026, will come into force from July 15, when the CETA becomes operational.
Motor cars and motor vehicles for personal use will be required to have a qualifying value content (QVC) of no less than 35 per cent if they are to be traded between India and the UK on preferential duties.
For partially assembled kits of cars, public and goods transport vehicles, tractors and other equipment, the local value addition ranges from 45 to 55 per cent, depending on whether the value of the product is calculated at the factory gate or at the point of loading onto the ship.
This rate applies to parts of motor vehicles, while the QVC for motorcycles has been kept at 40 to 55 per cent,
Under the CETA, India will reduce duties on UK-made cars to 10 per cent from 110 per cent over 15 years under an overall quota of 3.78 lakh units.
This quota would be raised with each passing year.
India-made EVs, hybrids and hydrogen passenger cars will gain duty-free access to the UK market starting from the first year.
This starts with a quota that will expand to 88,000 units by 15th year.
For wines and spirits, imported content is allowed, but it must undergo substantive transformation before it can be traded at lower duties under the CETA.
For whisky and gin from the UK, India will bring down duties to 75 per cent from 150 per cent immediately and then to 40 per cent by the 10th year.
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