DGFT Proposes a Comprehensive Non-Preferential Rules of Origin Framework for Exports and Imports

DGFT has proposed a comprehensive framework for India's non-preferential rules of origin, covering both exports and imports, through Trade Notice No. 27/2026-27 dated 14 September 2026. The draft would amend Para 2.93 of the Handbook of Procedures (HBP), 2023, and was circulated as a draft public notice for stakeholder comment. This is a proposal, not yet in force, but it signals how India intends to standardise origin determination outside the preferential (FTA) context — the basis on which ordinary, non-preferential Certificates of Origin are issued.

What Happened

Non-preferential rules of origin determine the "economic nationality" of goods where no trade agreement is involved — for anti-dumping and countervailing measures, trade statistics, country-of-origin marking, and general Certificate of Origin (CoO) issuance. India's existing framework has been seen as thin and inconsistent. The DGFT draft sets clearer, codified tests:

• For exports: goods qualify as of Indian origin when manufactured in India; where imported inputs are used, they must undergo processing that exceeds defined "simple operations" (such as dust removal, sorting, washing, painting or simple cutting) — i.e. a substantial transformation.
• For imports: origin is determined on a wholly-obtained basis for agricultural chapters, or otherwise by a change in tariff heading OR a minimum 35% value addition. Importers would self-declare origin, with verification on a risk-based basis.

The draft also addresses CoO administration: Non-Preferential Certificates of Origin would continue to be issued by designated agencies (Appendix 2E) through online applications on trade.gov.in, at a fee of around ₹200 per certificate, with self-certification available to status-holder manufacturer exporters.

Why This Matters

A clear non-preferential origin regime matters even to traders who never claim FTA benefits. Buyers in many markets require a non-preferential CoO for customs, letters of credit and import licensing. Codified rules reduce disputes over what counts as "Indian origin," make CoO issuance more predictable, and bring India closer to international practice (the WTO framework and common change-in-tariff-heading / value-addition tests). For importers, a defined 35%-value-addition or tariff-shift test and self-declaration with risk-based checks offers more certainty about how origin claims will be assessed.

Who's Affected

Exporters who obtain non-preferential CoOs (a large share of general merchandise trade), importers declaring country of origin, Export Promotion Councils and chambers that issue CoOs, and status-holder manufacturers who would gain self-certification. CHAs and trade-documentation teams will need to align their CoO and declaration practices once the rules are finalised.

What Exporters and Importers Should Do Now

• Read Trade Notice No. 27/2026-27 and the draft public notice in full, and assess how the origin tests would apply to your key products and input mix.
• Map whether your manufacturing clears the "beyond simple operations" bar for exports, and whether imports meet the tariff-shift or 35% value-addition test.
• Status-holder manufacturers should prepare for self-certification — ensure internal origin records and bills of materials can support an origin declaration.
• Review your current non-preferential CoO process (issuing agency, online filing on trade.gov.in, record-keeping) against the proposed framework.
• If the consultation window is still open or reopened, submit comments through your Export Promotion Council or trade body; if it has closed, watch for the final public notice.

The Bigger Picture

This proposal sits alongside CBIC's recent clarification that trade-agreement rules of origin prevail over CAROTAR, and the broader tightening of origin discipline as India signs more FTAs (UK CETA, the EU deal in progress). Preferential and non-preferential origin are distinct regimes, but both are moving toward clearer, more auditable tests. Exporters who build robust origin documentation now — bills of materials, value-addition calculations, process records — will find both preferential and non-preferential claims easier to defend.

Frequently Asked Questions

Is this in force now? No. It is a draft proposal under Trade Notice No. 27/2026-27 to amend Para 2.93 of HBP 2023. Watch for a final public notice.

What is the difference from FTA rules of origin? FTA (preferential) rules decide eligibility for reduced duty under a specific agreement. Non-preferential rules decide general country of origin for CoOs, trade remedies, marking and statistics.

What tests are proposed? For exports, manufacture in India with substantial transformation beyond simple operations. For imports, wholly-obtained for agriculture, or change in tariff heading or 35% value addition otherwise.

Will I still get my CoO online? Yes, the draft keeps online issuance via trade.gov.in through designated agencies, with self-certification for status-holder manufacturers.

Conclusion

DGFT's draft would give India a clearer, codified non-preferential origin regime for both exports and imports. It is not yet binding, but exporters and importers should study the proposed tests against their products now and strengthen origin records, so that CoO issuance and origin declarations are straightforward once the final rules take effect.

This summary is for general guidance and describes a draft proposal. Verify the current status and final text against DGFT Trade Notice No. 27/2026-27 and any subsequent public notice on the DGFT portal (dgft.gov.in) before acting.