Denial of FTA Benefits: Evolving Powers of Indian Customs Authorities to Take Unilateral Action

In their latest article, “Denial of FTA Benefits: Evolving Powers of Indian Customs Authorities to Take Unilateral Action”, published in Lexology, our Partner Stella Joseph and Advocate Aradhya Singh have attempted to examine the increasing scope of Indian Customs authorities to unilaterally deny benefits under Free Trade Agreements (FTAs), with a focus on the impact of regulatory and judicial developments. As India actively expands its network of FTAs to strengthen its position in the global economic order, the predictability and reliability of accessing FTA benefits have become pivotal for long-term trade and investment decisions. Central to this discussion is the role of Certificates of Origin (COOs), which validate preferential treatment under FTAs.

The article traces the legal landscape both prior to and following the introduction of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR). It highlights key judicial pronouncements and evolving statutory frameworks that have emboldened Indian authorities to scrutinize, and, where deemed necessary, reject COOs, thereby limiting the extension of FTA benefits. The authors critically analyse the implications of such unilateral actions on the credibility of India’s trade agreements, regulatory predictability for investors and traders, and the balance between safeguarding domestic interests and honouring international commitments