← External Forces: Trade, Geopolitics & Market Access (all topics)
ASEAN rerouting / FTA imports
What it is
Goods from a country facing Indian trade duties being routed through an FTA partner to claim preferential tariffs. Under the ASEAN-India agreement India eliminated duties on roughly 74% of tariff lines, and many steel lines attract nil duty
CAROTAR 2020 rules require the importer to hold origin information and permit verification, but enforcement depends on certification
Impact on industries
- Undermines trade remedies directly - a duty on Chinese steel achieves little if the same material enters duty-free through Vietnam or Indonesia
- Domestic producers face import competition at zero duty while carrying full domestic cost and compliance burdens
- Tightened rules of origin under CAROTAR and stricter certificate verification have raised the evidentiary burden on importers claiming preference
- The remedy is enforcement rather than tariffs, since renegotiating an FTA is slow and the preference itself is the negotiated benefit