Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

CAROTAR 2020 Rules

Note4Students

From UPSC perspective, the following things are important :

Prelims level : CAROTAR rules

The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020) shall come into force from September 21.

Try this PYQ:

Q.In the context of the affairs of which of the following is the phrase “Special Safeguard Mechanisms” mentioned in the news frequently?

(a) United Nations Environment Programme

(b) World Trade Organization

(c) ASEAN- India Free Trade Agreement

(d) G-20 Summits

CAROTAR rules

  • Importers will have to do their due diligence to ensure that imported goods meet the prescribed ‘rules of origin’ provisions.
  • This is the essential availing concessional rate of customs duty under free trade agreements (FTAs).
  • A list of minimum information, which the importer is required to possess, has also been provided in the rules along with general guidance.
  • Also, an importer would now have to enter certain origin related information in the Bill of Entry, as available in the Certificate of Origin.

Why need CAROTAR?

  • CAROTAR 2020 supplements the existing operational certification procedures prescribed under different trade agreements.
  • India has inked FTAs with several countries, including Japan, South Korea and ASEAN members.
  • Under such agreements, two trading partners significantly reduce or eliminate import/customs duties on the maximum number of goods traded between them.
  • The new rules will assist customs authorities in the smooth clearance of legitimate imports under FTAs.

Its significance

  • The ASEAN FTA allows imports of most items at nil or concessional basic customs duty from the 10-nation bloc.
  • Major imports to India come from five ASEAN countries — Indonesia, Malaysia, Thailand, Singapore and Vietnam.
  • The benefit of concessional customs duty rate applies only if an ASEAN member country is the country of origin of goods.
  • This means that goods originating from China and routed through these countries will not be eligible for customs duty concessions under the ASEAN FTA.
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