The Indian government has halted a requirement for exporters to procure online Certificates of Origin (CoO) for every outbound consignment until 31st January 2022. The online CoO scheme was introduced in 2019, extending to cover all merchandise exports in November 2021. This measure was devised to streamline trade and enhance ease of doing business for all exporters.
About the Online Certificate of Origin System
The CoO platform developed by the Director-General of Foreign Trade (DGFT) and the Regional & Multilateral Trade Relations (RMTR) Division, Department of Commerce, represents a single access point for all exporters, Free Trade Agreements (FTAs), Preferential Trade Agreements (PTAs), and related agencies. The system provides a verifiable means of ensuring the authenticity of issued CoOs via a QR code that bolsters credibility.
India’s Export Status and Promotion Schemes
The monthly merchandise exports from India have exceeded USD 30 billion for seven consecutive months. With this trend, the nation is likely to achieve its record export target of USD 400 billion in 2021-22. To boost export activity, the country has introduced several schemes.
Under the Merchandise Exports from India Scheme (MEIS), the government provides duty benefits based on the product and country. Similarly, incentives are offered to India-based Service Exporters via the Service Exports from India Scheme to encourage service exportation from the country.
The Remission of Duties or Taxes on Export Product (RoDTEP) offers a completely automated route for Input Tax Credit (ITC) under GST (Goods and Service Tax). Initiated in January 2021, the scheme replaced the non-WTO compliant MEIS scheme.
In addition, the Rebate of State and Central Taxes and Levies (RoSCTL) compensates for embedded state and central duties and taxes that GST does not refund. This scheme applies exclusively to garments and made-ups and was introduced by the Ministry of Textiles.
Overview of Trade Agreements
Trade agreements facilitate preferential trade terms and tariff concessions between two or more nations. India has various forms of trade agreements with several countries and trading blocs.
Free Trade Agreement (FTA): FTAs offer preferential trade terms to partner countries. India negotiated an FTA with Sri Lanka and the ASEAN trading bloc.
Preferential Trade Agreement (PTA): PTAs provide preferential access to certain products by reducing or eliminating duties on an agreed number of tariff lines. India signed such an agreement with Afghanistan.
Comprehensive Economic Partnership Agreement (CEPA): CEPAs offer broader scope than FTAs, covering areas such as services trade, investment, and other economic partnerships. India has secured CEPAs with South Korea and Japan.
Comprehensive Economic Cooperation Agreement (CECA): CECAs primarily focus on trade tariffs and Tariff Rate Quotas (TRQ) rates negotiation and are less inclusive than CEPAs. India signed a CECA with Malaysia.