India-UK CETA Rules of Origin: Qualifying Value Content and Origin Requirements

The Rules of Origin (RoO) are a critical component of the India-UK CETA because they determine whether a product is eligible to claim preferential tariff treatment under the agreement. 

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For manufacturers, exporters, importers, and multinational companies with integrated supply chains spanning India and the UK, the RoO will become an important compliance consideration. Companies sourcing raw materials or intermediate goods from multiple jurisdictions should assess whether their production processes satisfy the applicable origin requirements before claiming preferential tariff treatment. 

1. What are the India–UK CETA rules of origin, and why do they matter? 

The Rules of Origin (RoO) establish the criteria for determining whether a product qualifies as an “originating good” under the India–UK Comprehensive Economic and Trade Agreement (CETA). On July 3, 2026, the Central Board of Indirect Taxes and Customs (CBIC) notified the Customs Tariff (Determination of Origin of Goods under Comprehensive Economic and Trade Agreement between India and the United Kingdom of Great Britain and Northern Ireland) Rules, 2026, which will come into force on July 15, 2026. 

The Rules determine whether eligible goods can claim preferential tariff treatment under the India–UK CETA. They also prescribe the procedures for determining origin, calculating value content, issuing proof of origin, maintaining records, and verifying origin claims. 

2. Why do exporters and importers need to comply with the RoO?

Preferential tariff treatment under the India–UK CETA is available only to goods that satisfy the applicable origin requirements. 

Without RoO, products manufactured in third countries could be routed through India or the UK after minimal processing to obtain lower customs duties. The Rules prevent such trade diversion by ensuring that only goods that are wholly obtained or have undergone sufficient production or substantial transformation in India or the UK qualify for tariff preferences. 

For exporters, compliance determines whether their products qualify for preferential tariffs. For importers, it helps support origin claims during customs clearance and verification. 

3. Who administers the RoO in India? 

The notification establishes India’s domestic framework for administering origin requirements under the India–UK CETA. 

For exports from India, the Department of Commerce and designated issuing authorities administer origin-related functions, including the issuance of Certificates of Origin (CoO) where applicable. The CBIC administers import verification, origin claims, and customs procedures in India. 

4. How can a product qualify as an originating good?

Rule 3 provides three ways in which a product may qualify as originating under the India–UK CETA. 

A product qualifies if it is: 

• wholly obtained or produced entirely within the territory of one or both countries  
• produced exclusively from originating materials 
• produced using non-originating materials but satisfies the applicable product-specific rule (PSR), including any tariff classification change, qualifying value content (QVC), or specified manufacturing process prescribed in Annexure A.  

For most manufacturers, the third criterion will be the most relevant because modern supply chains frequently source raw materials or intermediate components from multiple countries. 

5. What are “wholly obtained” goods?

Wholly obtained goods are products derived entirely from natural resources or primary production activities within India or the UK. 

Examples include: 

• Minerals extracted within a country 
• Agricultural products grown or harvested there 
• Live animals born and raised there 
• Products obtained from those animals 
• Fish harvested within territorial waters 
• Qualifying marine products harvested by registered vessels 
• Waste and scrap suitable only for recovering raw materials 
• Products manufactured entirely from wholly obtained goods 

These provisions primarily benefit agriculture, fisheries, mining, food processing, and other resource-based industries. 

6. How do PSRs determine origin?

Most manufactured goods do not qualify as wholly obtained. Instead, exporters must determine origin using the PSRs contained in Annexure A. 

The PSRs are based on the 2022 Harmonized System (HS) and prescribe the origin requirement applicable to each tariff classification. 

Depending on the product, exporters may need to satisfy one or more of the following: 

• Change in Chapter (CC) 
• Change in Tariff Heading (CTH) 
• Change in Tariff Sub-heading (CTSH) 
• Qualifying Value Content (QVC) 
• a specified manufacturing process 

Businesses should therefore identify the correct HS classification before determining origin. 

7. What is qualifying value content (QVC)? 

Some PSRs require manufacturers to demonstrate that a minimum proportion of the product’s value originates within India and the UK. 

The Rules permit two calculation methods: 

1. Build-down Method, which deducts the value of non-originating materials from the value of the finished product 
2. Build-up method, which measures the value contributed by originating materials.  

Unless Annexure A specifies otherwise, the standard QVC thresholds are: 

8. How do the Rules determine the value of goods?

The rules permit businesses to calculate origin using either the ex-works price or the Free on Board (FOB) value, depending on the applicable PSR. 

The ex-works price includes the value of materials, manufacturing costs, allocated overheads, and producer profit but excludes refundable taxes and post-production transportation, insurance, and loading costs. 

The FOB value includes the export price together with transportation, loading, and related costs incurred until the goods are placed on board the exporting vessel. 

The Rules also specify which costs businesses may include or deduct when calculating QVC, including freight, insurance, packing, transportation, customs brokerage charges, duties that are not refundable, and waste or spoilage costs. 

9. Can non-originating materials become originating?

Yes. The Rules allow non-originating materials to acquire originating status if subsequent production satisfies the applicable RoO. 

Manufacturers may also include the value added through production undertaken in the exporting country, together with the value of originating materials incorporated into non-originating inputs, when determining origin. 

10. Which manufacturing operations do not confer origin?

The Rules identify 19 categories of minimal operations that do not confer originating status because they do not constitute substantial transformation. 

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These include repackaging, washing, cleaning, polishing, grading, sorting, labeling, simple mixing, simple assembly, inspection, testing, dilution, simple cutting, and preservation during transportation or storage. 

The Rules also disregard production or pricing practices intended to circumvent origin requirements. Businesses therefore cannot obtain preferential tariff treatment merely by carrying out minor processing or assembly after importing products from third countries. 

11. Does the India-UK CETA allow a tolerance for non-originating materials?

Yes. The Rules include a de minimis (tolerance) provision that permits limited quantities of non-originating materials without automatically disqualifying a product from originating status. 

The permitted threshold depends on the product classification: 

Where a product is also subject to a QVC requirement, producers must still include the value of these non-originating materials in the QVC calculation. 

12. How do the Rules treat accessories, spare parts, and packaging?

Accessories, spare parts, and tools supplied together with the finished product and not separately invoiced are disregarded for tariff classification purposes but remain part of the Qualifying Value Content calculation where applicable. 

The Rules also distinguish between retail and transport packaging. Retail packaging does not affect tariff classification but is included in QVC calculations. By contrast, transport packaging used solely for shipping goods is ignored completely when determining origin. 

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