Discuss how rules-of-origin enforcement mechanisms like CAROTAR and EODES address trade deflection concerns in India's new-generation FTAs.

Trade deflection happens when goods from a non-member country are routed through an FTA partner to get its lower duty. India's new-generation FTAs, such as the India–New Zealand FTA, let exporters self-certify origin [3]. Checks made after a certificate is issued therefore matter more. CAROTAR and EODES are safeguards that work in layers, each covering a different risk.

Why the risk of deflection is higher

• Self-certification replaces an agency's check before shipment with the exporter's own declaration [3].
• Deep tariff cuts: India liberalises 70.03% of its tariff lines for New Zealand [2]. This widens the duty gap a third country could exploit.

CAROTAR, 2020: is the origin claim honest?

• Importer accountability: importers must enter Certificate of Origin (CoO) details in the Bill of Entry, hold origin information and keep supporting records [1].
• Verification: Customs can ask the exporting country's authority to confirm that a certificate is genuine or that the origin claim is correct [1].
• Intent: the government presented it as a Budget commitment to protect domestic industry from misuse of FTA benefits [1].

EODES: is the certificate authentic?

• Advance data: under the India–Korea CEPA, the exporting customs sends CoO data to the importing customs as soon as the certificate is issued [4].
• Forgery check: a fake or altered paper certificate will not match this data.
• Scaling up: CBIC has signed a similar MoC with New Zealand Customs [5]. This puts into practice the WTO TFA duty to confirm certificates of origin [6].

Limits

• EODES proves that a certificate is real, not that the goods qualify. A genuine certificate can still carry a false origin claim.
• The main barrier to circumvention is still the FTA's product-specific rules and verification mechanism [2], enforced through CAROTAR.

EODES therefore delivers speed and authenticity, while CAROTAR and the rules of origin test honesty. CBIC should extend customs-to-customs data exchange to every FTA and publish verification outcomes for each agreement. Enforcement in layers lets India widen market access without exposing domestic industry to circumvention.