Preferential certificate issuance under FTAs rises, signals higher advantage for exporters

New Delhi: Issuance of preferential certificates of origin — a document enabling exporters to claim tariff benefits under free trade pacts — by India has risen significantly for various countries, including Korea, Malaysia, and Japan, in 2024-25, indicating increased advantage of such agreements for domestic exporters.

The number of preferential certificates of origin issued under free trade agreements implemented so far has recorded a healthy increase, rising to 7,20,914 in 2024-25 from 6,84,724 in 2023-24.

The number of preferential certificates of origin issued by India under free trade agreements (FTAs) with Korea and Japan rose to 54,644 and 47,809, respectively, in 2024-25 against 52,158 and 42,306, respectively, in 2023-24, according to the commerce ministry data.

India has issued 4,664 such certificates in 2024-25 under the FTA with Malaysia, against 4,370 certificates in 2023-24. Similarly, India has issued 19,267 certificates under the trade pact with Sri Lanka in 2024-25 compared to 12,520 such documents in 2023-24.

For Asean (Association of South east asian nations), the country has issued 1,79,965 certificates last fiscal as against 98,104 certificates in 2023-24.

Asean members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. For SAFTA (South Asia Free Trade Agreement), 67,562 certificates were issued last year against 58,269 certificates in 2023-24.

These certificates are essential for Indian exporters to claim preferential tariff benefits under respective trade agreements, thereby enhancing the competitiveness of Indian goods in partner markets and facilitating smoother access to global value chains. In an FTA, two countries either significantly reduce or eliminate import duties on the maximum number of goods traded between them.

India has so far implemented over a dozen such agreements with countries, including Japan, Singapore, Korea, UAE and Australia. Rising issuance of these documents also highlights the strengthening trade relationship between the FTA partners.