India has been actively engaging in Free Trade Agreements (FTAs) with partner countries to enhance trade competitiveness, secure preferential market access, and diversify export opportunities. FTAs help reduce or eliminate tariffs, simplify customs procedures, and create stable trade frameworks. Over the years, India has signed FTAs with ASEAN, Japan, Korea, UAE, Australia, and others. The newly notified TEPA with the EFTA States is another strategic step to strengthen India’s trade relations with developed economies and increase its global trade footprint.
Objective and Scope
The rules aim to implement the Trade and Economic Partnership Agreement (TEPA) signed between India and the EFTA States on 10th March 2024. They establish a framework to determine the origin of goods for availing preferential tariff treatment under the Agreement.
Key Definitions
| Term | Meaning |
| EFTA States | Iceland, Liechtenstein, Norway, Switzerland (Liechtenstein treated as Swiss-origin due to customs union) |
| Ex-works Price | Price at manufacturer’s site, excluding internal taxes |
| FOB Value | Value of goods loaded onto carrier at export port, excluding export duties |
| Originating Products | Goods that qualify as originating under origin rules |
| Non-Originating Materials | Inputs not originating from Parties, requiring transformation |
Determination of Origin
| Category | Explanation |
| Wholly Obtained | Products like minerals, crops, live animals, fish, waste, scrap, etc. |
| Sufficient Processing | Product Specific Rules (PSR) in Annexure-A define qualifying transformation. Tolerance of up to 10% non-originating materials allowed. |
| Insufficient Operations | Simple packaging, mixing, assembly, polishing, washing, etc. not enough to confer origin. |
| Accumulation Principle | Inputs from one Party considered originating in another, if substantial processing occurs. |
Supporting Provisions
| Rule | Key Point |
| Unit of Qualification | Origin tested at HS classification level, with provisions for packaging and sets. |
| Accessories/Parts | Counted as part of product if included in FOB value. |
| Neutral Elements | Inputs like energy, fuel, tools not considered. |
| Accounting Segregation | Allowed for fungible materials with approval. |
| Territoriality | Origin must not break outside Parties’ territories. |
| Direct Transport | Products must move directly; transit allowed under customs control. |
Proof of Origin
| Proof Type | Issued By |
| Origin Declaration | Approved exporters (Specified format in Annexure-B) |
| Movement Certificate EUR.1 | EFTA customs authorities (Specified format in Annexure-D) |
| Certificate of Origin | Indian authorised agencies or self-declared by exporters (Specified format in Annexure-C) |
Such issued proof of origin is Valid for 12 months and Exporters/importers must keep records for 5 years.
Denial and Suspension of Benefits
| Scenario | Action Taken |
| Failure to meet origin rules | Preferential benefit denied |
| Invalid/Unverifiable proof | Claim rejected |
| Misuse by exporter | Temporary suspension at exporter or product level |
Transition Provisions
It is again a welcome move that the products in transit or in bonded storage as on 1st October 2025 may avail preferential tariff, subject to retrospective proof of origin submission within 9 months.
Key take aways for Businesses
- Map supply chains for compliance with origin rules.
- Build strong documentation systems.
- Training to staff on proof of origin procedures.
- Engage with customs brokers and authorities for smooth operations.
Author’s note – Boost to Indian Trade
The TEPA 2025 marks a significant milestone in India’s global trade journey. By enabling preferential tariff access to developed EFTA markets, Indian exporters—especially in sectors like pharmaceuticals, textiles, machinery, and agriculture—can gain a competitive edge. At the same time, Indian consumers and industries will benefit from high-quality imports at reduced costs. This agreement is expected to diversify export destinations, enhance bilateral investment, and strengthen India’s position in global value chains, thereby unlocking new growth opportunities for Indian trade and industry.
Dislcaimer: This blog is intended to provide a structured understanding of the new rules. For specific compliance and transaction-level advice, businesses should consult trade experts or legal advisors.