ASEAN-India Free Trade Agreement (AIFTA) Certificate for Thailand

The ASEAN-India Free Trade Agreement (AIFTA) certificate provides several benefits for businesses exporting to Thailand. Here are the key advantages:

• Faster Customs Clearance: The customs clearance procedures of the AIFTA in Thailand have been made easier. They also take advantage of obtaining an AIFTA certificate, thus making the trade between India and Thailand faster.
• Reduced Import Duties: The Digital Certificate of Origin AIFTA helps Indian businesses reduce the Thai import taxes and make their products more affordable when taken to the ASEAN market.
• Wider Product Coverage: AIFTA offers more export products and better tax rates for Indian companies compared to the India-Thailand Early Harvest Scheme, providing greater export opportunities.
• Simplified Compliance with Rules of Origin: AIFTA Rules of Origin are well provided, meaning that Indian exporters can be able to prove the origins of their products, hence getting the lower taxes under the ASEAN-India FTA.
• Expanded Trade Opportunities for Indian Businesses: Various advantages of AIFTA for Indian firms include the freedom of entry of more products to the Thai market, reduction of taxes and duties, and overall trade relations under the AIFTA agreements.

The India-Thailand Early Harvest Scheme (EHS), signed in 2004, is a preferential trading system with 82 agreed preferential products where import taxes will be removed or reduced. It is the first phase towards the agreement of the FTA between the two countries. Some of the imported items include fruits, processed foods, electronics, and automobile spare parts. The EHS intends to expand the amount of exported products between both nations, grant faster access to markets, and bolster economic relations. It also helps strengthen regional connections between ASEAN and India for better economic cooperation and mutual growth.

The ASEAN-India Free Trade Agreement (AIFTA) facilitates trade between India and the Thailand. AIFTA's impact on Thailand's businesses enhances economic cooperation and market access. Here are the key products under AIFTA:

• Pharmaceuticals: India exports generic medicines and pharmaceutical products to Thailand at reduced taxes, boosting healthcare access and affordable treatments.
• Auto Components: Key imports like engines and gearboxes help India’s automobile industry lower manufacturing costs and improve production efficiency.
• Electronic Appliances: Lower duties on items like TVs and refrigerators increase trade volumes and make electronics more affordable for consumers.
• Fresh Fruits: Tropical fruits like mangoes and pineapples are traded at lower taxes, supporting farmers and enhancing agricultural exports.
• Precious Stones & Jewelry: Reduced duties on diamonds, gems, and jewelry promote bilateral trade in luxury goods, benefiting India’s gem and jewelry industry.

The AIFTA Certificate of Origin is granted under the ASEAN-India Free Trade Area (AIFTA) to certify that the exported products meet the origin requirements necessary for preferential tariff and tax benefits.

Wholly Obtained or Produced Products:

Products are considered wholly obtained or produced when they are entirely sourced within the exporting country. This includes natural minerals, cultivated crops, and goods made exclusively from these raw materials.

Not Wholly Obtained or Produced Products:

For other goods, a minimum of 35% Regional Value Content (RVC) is required, along with a Change in Tariff Classification (CTC) at the 6-digit Harmonized System (HS) code level. This means that any imported materials used in the final product must belong to a different tariff classification than the finished goods.

Since some products may have specific conditions, exporters should refer to the AIFTA agreement or relevant authorities for further guidance.

Many businesses face challenges while applying for and securing this certificate. Here are some of the most common issues:

• Complex Rules of Origin Compliance: AIFTA’s Rules of Origin require a clear understanding and correct classification of goods. Showing that products qualify for lower taxes can be complex and take time.
• Documentation Errors Leading to Application Rejections: Even minor mistakes in the paperwork, like inaccurate invoices or incorrect declarations of origin, can cause application rejections. This leads to delays in benefiting from preferential treatment and adds to administrative effort.
• Delays in Certification Approval: Approval processes can be delayed due to manual checks, large numbers of submissions, or incomplete documents. These delays can affect export timelines and impact customer experience.
• Customs Verification Issues: Customs authorities may check shipments carefully. Any differences between shipment details and the Certificate of Origin can cause delays or extra checks.

Here is the list of documents required for an AIFTA Certificate of Origin for Thailand:

• Application Form
• Manufacturing Cost Statement (MCS)
• Commercial Invoice
• Digital Signature Certificate (DSC)
• Importer Exporter Code (IEC) Certificate
• Supporting Documents (e.g., bills of materials, production records)
• AIFTA Certificate of Origin Form