Rules of Origin are central to the gains from FTAs. Discuss in the context of the ASEAN–India Trade in Goods Agreement.

Rules of Origin (ROO) are the tests that decide whether a product was really made in a partner country and so qualifies for the lower FTA duty. AITIGA was signed in 2009 and has been in force since 2010 [1]. Weak ROO in it allowed goods from outside ASEAN to enter India at FTA rates, which is why ROO are central to the ongoing review.

Why ROO decide who gains from an FTA

• Targeting the benefit: duty cuts go only to genuine partner producers, not to free-riders from outside the agreement.
• Stopping trade deflection: third-country goods cannot claim the low duty after only minor processing in an ASEAN country.
• Rewarding value addition: ROO encourage real local manufacturing and regional value chains.

ROO under AITIGA: the problem

• India's trade deficit with ASEAN grew from USD −5.41 bn (2011-12) to USD −45.20 bn (2024-25), while exports stayed flat at about USD 39–44 bn [1].
• The government blames "injury to industries" and "inequitable tariff liberalization", and wants stronger ROO provisions [2].
• Caveat: weak Indian competitiveness also adds to the deficit, so ROO explain only part of it.

India's response

• CAROTAR 2020 (in force from 21 Sep 2020) requires importers to check origin themselves and to enter origin details in the Bill of Entry [3].
• AITIGA Review: the Rules of Origin Sub-Committee (SC-ROO) is one of 8 Sub-Committees. It met at both the 13th JC (Jul 2026) [4] and the 15th JC (Oct 2026) [5].

Limits and trade-offs

• Unilateral reach: CAROTAR works only at India's border. Certificates of Origin are still issued in the exporting country, so a lasting fix needs ASEAN to agree [3].
• Compliance cost: overly strict ROO raise paperwork for honest exporters and for Indian firms that use ASEAN inputs. This lowers FTA use.
• Consensus hurdle: all 10 ASEAN members must agree. The 2025 target for substantially concluding the review was missed [2][5].
• Exports need more: non-tariff barriers also hold back Indian exports [2].

ROO decide whether tariff cuts reward genuine partners or third-country goods routed through them. India should write CAROTAR-type checks into AITIGA itself, share responsibility for certification with ASEAN, and pair this with removing non-tariff barriers. If these are delivered on firm, time-bound deliverables at the January 2027 JC [5], a balanced AITIGA can strengthen the Comprehensive Strategic Partnership and the Act East Policy [1].