Customs department seeks to allay free-trade agreements misuse concerns

A new provision was introduced in February in the Customs Act for strict verification of rules of origin of imports under FTAs

The Customs department sought to allay fears of importing companies on the requirement to show documents revealing confidential cost structure from overseas firms as the government tightens noose over misuse of free-trade agreements (FTAs). 

However, experts say the department still possesses the power to delay the clearance of cargo.  The new rules that came into effect from September 21 tell importers to show certificates of origin from exporting countries. This is for the Customs authorities to check whether value addition has happened in countries where India has these agreements. 

Many such agreements have a clause that at least 35 per cent value