What is the Indo-European Free Trade Agreement | INDO- EFTA

Updated on July 16, 2024 02:49:50 PM

The European Free Trade Association (EFTA) is an intergovernmental organisation of four European countries: Iceland, Liechtenstein, Norway, and Switzerland. The primary objective of EFTA is to promote free trade and economic cooperation among its member states and to facilitate their participation in the broader European Single Market.

Recently, India and EFTA concluded a historic free trade agreement (FTA) after 15 years of negotiations. The India-EFTA FTA is a comprehensive trade agreement that covers a wide range of goods and services, including industrial products, agricultural commodities, and intellectual property rights. The agreement aims to eliminate or reduce tariffs and other trade barriers between India and the four EFTA member states, thereby facilitating the seamless movement of goods and services across borders.

The India-EFTA FTA is expected to provide numerous benefits to businesses and consumers in both India and the EFTA countries. For Indian exporters, the FTA will open up new markets and provide preferential access to the affluent consumers of the EFTA countries. The agreement will also reduce the cost of doing business by eliminating or reducing tariffs and other trade barriers. For consumers in India, the FTA will result in lower prices for imported goods from the EFTA countries, thereby increasing their purchasing power.

The India-EFTA FTA is a significant milestone in the economic relations between India and the EFTA countries. It is expected to boost trade and investment flows, create jobs, and contribute to the overall economic prosperity of both regions. The agreement is also a testament to the shared commitment of India and the EFTA countries to open trade and economic cooperation.

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What is India-EFTA Registration?

The EFTA registration is a certificate of origin for goods and services agreed upon in the free trade agreement signed between India and four European countries under the European Free Trade Association. India has signed the EFTA after 15 years of negotiation with the respective members of the association. EFTA's objective is to provide a balanced level playing field for the Indian exporters in the European market. Hence any Indian exporter or merchant trading with the EFTA member countries mainly, Iceland, Liechtenstein, Norway, and Switzerland, are required to produce the certificate of origin for their products to the customs to get full benefits of the Indo-EFTA pact.

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Rules of Origin of Product

Rules of certificate of origin are the criteria used to determine the country of origin of a product being exported. They are established through an agreement between the signatory parties of a trade agreement and serve as a basis for determining whether a product is eligible for preferential treatment.

By establishing rules of origin, signatory parties aim to ensure fair and transparent trade between their countries and prevent fraud or abuse of the trade agreement's provisions.

  • Wholly Obtained products
  • Value-added Criteria for products
  • Change in headers & subheadings
  • Change in the harmonised system (HS)
  • Final production before export must be done in the exporting country
  • Sharing specific product details with authorities to comply with preferential treatment
  • The item has undergone adequate working or manufacturing according to the Product specific rules (PSR).
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Proof of origin of product

Proof of origin involves providing documentation or evidence that establishes the origin or place of manufacture of a product or goods. This is often a requirement in international trade to confirm the country of origin of the items being traded.

Exporters are required to give evidence of the Product's origin by any of the following means:-

  1. Digital certifications issued by approved government organisations.
  2. A paper certificate of origin of Indo-EFTA registration in electronic or hard copy format issued by the government authority.
  3. A certificate of origin of the declaration given by a licensed exporter as per the requirements and Indo-EFTA regulation.
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Documents required for EFTA certificate of origin

  • Commercial Invoice
  • Product Description
  • Digital Signature Certificate
  • Mobile No. & Email address
  • Updated Import Export Code
  • Purchase order from importer company
  • Organization-based Digital Signature Certificate
  • Manufacturer Exporter Declaration on the Company’s Letterhead
  • Purchase Bill that has details of quantity, origin of raw materials, consumables used in product meant for export
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Process for EFTA registration

Filling of Application

The applicants are required to fill out a form with respective authorities for the registration cum membership certificate.

Documentation

Once the application form is duly completed the applicants are required to attach documents and details for their products and the nature of the firm.

Payment

Once the documentation is duly completed, applicants must make a payment on the portal for their registration to be completed.

Issuance of certificate

Once the application is submitted, the authorities will verify all the details. Once the verification is completed the certificate of origin will be issued to the respective applicant/Firm.

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Cost & validity of EFTA Registration

The cost of registering for the EFTA certificate, which includes our professional fees, is ₹3,236. The validity of the registration is upto 12 months from the date of its issuance. Exporters can apply for re-issuance of the certificate of origin once the validity period has expired.

The fee can be breakdown into the following

Particulars Fees
Government Fee ₹736
Application fee ₹2000
One-time registration fee ₹500
Total Fee ₹3236

Note: The validity of the application is up for 12 months from the day of its issuance.

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Product eligibility under the EFTA agreement

If the Product meets the following criteria, it will be considered to have come from a contracting nation and be eligible for preferential treatment.

  1. Wholly Obtained & Produced Products
  2. Live animals
  3. Agri products
  4. Products made of animals
  5. Products made of Marine animals
  6. Products made of natural resources
  7. Product produced in the territory of the country exclusively
  8. Products have undergone sufficient working or production according to the Product Specific Rules
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Benefits of EFTA Registration

The main advantage of this agreement is that it facilitates the exchange of goods and services between the two nations. This, in turn, has the potential to increase trade and economic growth.

  • Reducing tariffs & trade barriers in preferred countries
  • Encouraging cross-border transactions between the territories of the Contracting counties
  • Promoting fair competition in the free trade states
  • Ensuring equitable benefits to all Contracting countries
  • An effective mechanism for joint administration & resolution of disputes
  • Framework for regional cooperation and enhance mutual benefits for trade
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Responsibility of exporters under EFTA

  • The exporters are responsible for providing the required documents during the certification process.
  • Exporters proving misleading information and documents are liable to be punished or penalized.
  • Exporters need to keep minimum information & supporting documents of their products for 5 years from the expiry date of their certificate.
  • The exporter shall keep appropriate accounting records of the production supply of the products.
  • The exporter shall notify the issuing authority, customs authority, and the importer of any chances that could affect the accuracy or validity.
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Non-compliance & Penalties

  1. Customs duties will be charged if the Product's certificate of origin shows that it doesn't meet the rules of origin.
  2. Each Party must also ensure civil and administrative laws are to be followed. When necessary, it will use criminal punishments for people who break its customs laws.
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Conclusion

The EFTA Registration process is designed to uphold the integrity and quality of Indian exports, foster trust among trading partners, and simplify customs procedures within the EFTA region. By obtaining the EFTA Registration, Indian merchants and exporters can access lucrative markets and enhance their competitive advantage in the global marketplace.

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Frequently Asked Questions (FAQs)

What does EFTA stand for?

The EFTA stands for European Free Trade Association. The purpose of EFTA is to promote trade among respective European nations.

What are the benefits of EFTA?
  • Promote cross-border trade
  • Less duty on imported goods
  • Increase the volume of exports from India
  • There will be less duty on goods exported from India.
Where to get an EFTA certificate of origin?

You can get the EFTA certificate of origin in 3 simple steps.

  • Contact us
  • Provide documents
  • Issuance of EFTA CoO (certificate of origin)
What are the rules of origin of a product?

According to the agreement, an exporter must fulfil certain conditions to ensure their products meet the origin criteria.

  • Must be manufactured and produced in the country
  • Product made of material procured from the agreed Party
  • Sharing details of the Product with authorities such as the customs department

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