Navigating US Industry Norms: Decoding Rules of Origin for Successful Exports

The Commerce Ministry advises Indian exporters to adhere to US 'rules of origin' to avoid penalties on the re-routing of goods from high-tariff countries. Efforts are underway to codify these norms for better clarity. Exporters must avoid using India as a transit point for evading US tariffs.

The Commerce Ministry has issued a cautionary note to Indian exporters, urging them to comply strictly with the United States' 'rules of origin' to prevent punitive measures, an official revealed. These norms are critical as they determine the true origin of products to ensure compliance with US trade policies.

During an extensive stakeholder consultation on May 2, chaired by Special Secretary Rajesh Agrawal, the implications of re-routing goods from high-tariff nations like China through India were discussed. The ministry stressed the importance of substantial value addition to avoid classification as transhipment, which could attract higher duties in the US market.

The consultations emphasized understanding the US Customs and Border Protection rules, particularly the concept of 'substantial transformation,' to help exporters meet origin standards. If products with significant Chinese inputs fail to meet these standards, they risk facing high tariffs, underscoring the immense importance of codified and clear value addition norms.

(With inputs from agencies.)