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Online Certificate of Origin for Merchandise Export

  • 30 Dec 2021
  • 5 min read

For Prelims: Certificates of Origin (CoO), Types of Trade Agreements.

For Mains: Export Promotion Schemes and significance of trade agreements signed by India.

Why in News

The Centre has suspended till 31st January 2022, a mandatory obligation imposed on exporters to obtain online Certificates of Origin (CoO) for every outbound consignment.

Key Points

  • About:
    • The online CoO system, put in place in late 2019 for exports to countries with whom India had a Preferential Trade Agreement (PTA), was expanded to cover all merchandise exports from November 2021.
    • This platform acts as a single access point for all exporters, all Free Trade Agreements (FTAs)/Preferential Trade Agreements (PTAs), and all concerned agencies.
  • Devised By:
    • The platform has been designed and developed by the Director-General of Foreign Trade (DGFT) and Regional & Multilateral Trade Relations (RMTR) Division, Department of Commerce, Ministry of Commerce and Industry.
  • Significance:
    • This online facility provides ‘ease of doing business’ to the exporting community and gives a verifiable authentication mechanism to the partner countries to confirm the genuineness of the issued CoOs through a QR code which adds credibility to the issued e-CoO.
  • Status of Merchandise Export:
    • India’s monthly merchandise exports have crossed USD 30 billion for seven months in a row and are largely on course to reach the government’s target of a record USD 400 billion in 2021-22.
      • Export merchandising is a method of offering retail goods for sale in a foreign consumer market.
  • India’s Export Promotion Schemes:
    • Merchandise Exports from India Scheme:
    • Service Exports from India Scheme:
      • Under it, incentives are given by the Ministry of Commerce and Industry to Service Exporters based in India to promote the export of services from India.
    • Remission of Duties or Taxes on Export Product (RoDTEP):
      • It is a fully automated route for Input Tax Credit (ITC) in the GST (Goods and Service Tax) to help increase exports in India.
      • It was started in January 2021 as a replacement for the MEIS, which was not compliant with the rules of the World Trade Organisation.
    • Rebate of State and Central Taxes and Levies:
      • Announced in March, 2019, RoSCTL was offered for embedded state and central duties and taxes that are not refunded through Goods and Services Tax (GST).
      • It is available only for garments and made ups. It was introduced by the Ministry of Textiles.
        • Previously, it was Rebate for State Levies (ROSL).

Types of Trade Agreements

  • Free Trade Agreement (FTA):
    • A free trade agreement is an agreement in which two or more countries agree to provide preferential trade terms, tariff concession etc. to the partner country.
    • India has negotiated FTA with many countries e.g. Sri Lanka and various trading blocs as well e.g. ASEAN.
  • Preferential Trade Agreement (PTA):
    • PTAs or Generalized System of Preferences (GSP) is a special status given in trade by various countries. In this type of agreement, two or more partners give preferential right of entry to certain products by reducing duties on an agreed number of tariff lines.
    • Tariffs may even be reduced to zero for some products even in a PTA. India signed a PTA with Afghanistan.
  • Comprehensive Economic Partnership Agreement (CEPA):
    • Partnership agreement or cooperation agreement are more comprehensive than an FTA.
    • CEPA covers negotiation on the trade in services and investment, and other areas of economic partnership.
    • India has signed CEPAs with South Korea and Japan.
  • Comprehensive Economic Cooperation Agreement (CECA):
    • CECA generally covers negotiation on trade tariff and TRQ (Tariff Rate Quotas) rates only. It is not as comprehensive as CEPA. India has signed CECA with Malaysia.

Source: TH

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