According to a provision proposed in the latest budget, Indian Custom Officials can now ask importers about imported goods. The provision is applicable to all imports that have happened within the past five-years under the Free Trade Agreement (FTA). According to the Directorate of Revenue Intelligence, it will help Indian Custom Officials curb instances of false claims for FTA benefits. India’s deficit has dropped from $148.2 billion in April-December 2018 to $118.1 billion in April-December 2019.

 

The rules of origin serve as criteria to determine the origin country of any imported product. The information will be used by the Indian Custom Officials to determine if FTA claims are legitimate or not. According to the Directorate of Revenue Intelligence (DRI), the use of fake documents has been on the rise. Importers often show fake documents to change the origin country to take advantage of India’s trade pact laws.

 

However, industry experts are not happy about the decision by the Indian custom officials. It could lead to harassment even for legitimate importers. The move comes in the wake of the Indian government trying to curb imports in the country by introducing stricter norms. Industry representatives have called the move protectionist citing low utilization of FTAs in the first place.