Amendment to Para 2.62 of the Foreign Trade Policy 2023: A Legal and Policy Analysis of the Approved Exporter Scheme for Self-Certification of Certificate of Origin

1. Introduction

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, vide Notification No. 05/2026-27 dated 07 April 2026, has introduced significant amendments to Para 2.62 of the Foreign Trade Policy (FTP) 2023. These amendments pertain to the issuance of Certificates of Origin (CoO) and, more notably, introduce an optional system of self-certification under the Approved Exporter Scheme. This development marks a progressive shift in India's export regulatory framework, aligning it with global best practices aimed at facilitating trade, reducing compliance burdens, and enhancing operational efficiency.

This article seeks to examine the legal contours, background, significance, and potential impact of the amended provisions on India's EXIM (Export-Import) sector.

2. Background and Existing Framework

Certificates of Origin are critical trade documents that certify that goods exported from a country originate from that country. These certificates are indispensable for exporters seeking preferential tariff treatment under various trade agreements such as Preferential Trade Agreements (PTAs), Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECAs), and Comprehensive Economic Partnership Agreements (CEPAs).

Prior to this amendment, the issuance of CoOs in India was strictly regulated. Only agencies authorized by the DGFT, as listed in Appendix 2B of the Handbook of Procedures (HBP), were empowered to issue such certificates. Exporters were required to approach these designated agencies, submit requisite documentation, and obtain certification, which often resulted in increased transaction costs, delays, and administrative inefficiencies.

Recognizing these challenges and drawing from international trade facilitation frameworks such as the WTO Trade Facilitation Agreement, the Government of India has moved toward introducing a system of self-certification.

3. Key Features of the Amendment

The amendment to Para 2.62 introduces several notable changes:

3.1 Continuation of Authorized Issuance Mechanism

The fundamental principle remains intact: Certificates of Origin shall continue to be issued by agencies authorized by the DGFT. This ensures continuity, credibility, and oversight in the certification process.

3.2 Introduction of the Approved Exporter Scheme

A pivotal feature of the amendment is the introduction of an optional system of self-certification through the Approved Exporter Scheme. Under this scheme:

• Only exporters who are both manufacturers and Status Holders are eligible.
• Such exporters may be recognized by the DGFT as 'Approved Exporters' based on their infrastructure, capacity, and availability of trained manpower.
• Upon approval, these exporters are authorized to self-certify the origin of their goods.

This marks a paradigm shifts from third-party certification to exporter-driven certification, albeit within a regulated framework.

3.3 Self-Certification of Origin

Approved Exporters are permitted to self-certify that their manufactured goods originate from India. This certification enables them to avail preferential tariff benefits under applicable trade agreements without the need for intermediary certification agencies.

3.4 Mandatory Invoice Matching

A crucial compliance requirement introduced by the amendment is the mandatory use of identical invoice numbers in both the Certificate of Origin and the Shipping Bill. This measure is intended to facilitate automated verification and reduce instances of fraud or misdeclaration.

3.5 Conditional Applicability

The self-certification scheme is not universally applicable across all trade agreements. It will come into force only when:

• India incorporates the self-certification mechanism into a specific FTA/PTA; and
• The same is formally notified by the DGFT.

Further, the applicability of the scheme will be subject to the specific provisions and conditions of the relevant bilateral or multilateral agreement.

3.6 Reference to Appendix 2F

The operational details, eligibility criteria, procedural requirements, and penalty provisions governing the scheme are set out in Appendix 2F of the Handbook of Procedures.

4. Legal Significance of the Amendment

The amendment is rooted in the powers conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. It reflects a calibrated approach to regulatory reform, balancing trade facilitation with compliance safeguards.

From a legal standpoint, the introduction of self-certification:

• Expands the scope of delegated authority to private exporters under strict regulatory supervision.
• Imposes enhanced due diligence obligations on Approved Exporters, effectively shifting the burden of accuracy and compliance onto them.
• Establishes a framework for accountability through clearly defined penalty provisions in case of misuse.

The requirement of invoice harmonization further strengthens traceability and auditability, thereby reinforcing the integrity of the export documentation system.

5. Importance of the Amendment

5.1 Trade Facilitation

The amendment is a significant step toward reducing procedural bottlenecks in export documentation. By eliminating the need for physical interaction with certifying agencies, it expedites the certification process and enhances ease of doing business.

5.2 Cost Reduction

Exporters often incur substantial costs in obtaining Certificates of Origin, including service fees and administrative expenses. Self-certification is expected to reduce these costs, thereby improving the competitiveness of Indian exports in global markets.

5.3 Alignment with Global Practices

Many developed economies, including those in the European Union and under agreements such as the USMCA, have adopted self-certification mechanisms. India's move aligns its trade practices with these international standards, enhancing its credibility as a trading partner.

5.4 Encouragement to Status Holders

The scheme incentivizes exporters to achieve Status Holder recognition by offering them additional operational privileges. This could lead to greater formalization and capacity-building within the export sector.

6. Impact on the EXIM Sector

6.1 Positive Impacts

(a) Enhanced Efficiency
The elimination of intermediary certification agencies for eligible exporters will significantly reduce processing time, enabling faster shipment cycles and improved supply chain efficiency.

(b) Increased Export Competitiveness
Lower transaction costs and quicker turnaround times will make Indian goods more competitive in international markets, particularly in price-sensitive sectors.

(c) Digital Integration and Automation
The requirement of matching invoice numbers between CoOs and Shipping Bills supports the integration of digital systems, paving the way for automated verification and reduced manual intervention.

(d) Strengthened Compliance Culture
As exporters assume greater responsibility for certification, there is likely to be an increased emphasis on internal compliance mechanisms, documentation accuracy, and audit readiness.

6.2 Challenges and Risks

(a) Limited Eligibility
The scheme is currently restricted to manufacturer exporters who are Status Holders. This excludes a large segment of small and medium exporters, limiting the immediate reach of the reform.

(b) Risk of Misuse
Self-certification inherently carries the risk of misdeclaration or fraudulent claims of origin. While penalty provisions exist, effective monitoring and enforcement will be critical.

(c) Dependence on Bilateral Agreements
The applicability of the scheme is contingent upon its incorporation into specific FTAs/PTAs. This may result in uneven implementation across different markets.

(d) Increased Compliance Burden
Approved Exporters must maintain robust documentation and internal controls to substantiate their origin claims. Any lapse could result in penalties, suspension of approval, or reputational damage.

7. Comparative Perspective

Globally, self-certification systems have been successfully implemented in several jurisdictions. For instance:

• The European Union's Registered Exporter (REX) system allows exporters to self-certify origin for certain preferential trade arrangements.
• Under the USMCA, exporters, producers, and importers can self-certify origin without a prescribed format.

India's Approved Exporter Scheme reflects similar principles but adopts a more cautious approach by limiting eligibility and linking applicability to specific agreements.

8. Conclusion

The amendment to Para 2.62 of the FTP 2023 represents a forward-looking reform aimed at modernizing India's export certification framework. By introducing the Approved Exporter Scheme, the Government has taken a significant step toward enhancing trade facilitation, reducing costs, and aligning with global best practices.

However, the success of the scheme will depend on its effective implementation, robust monitoring mechanisms, and gradual expansion to include a broader base of exporters. Balancing facilitation with compliance will be key to ensuring that the benefits of self-certification are realized without compromising the integrity of the system.

In conclusion, the amendment is poised to have a transformative impact on the EXIM sector, fostering efficiency, competitiveness, and greater integration with the global trading system, while simultaneously imposing a higher standard of accountability on exporters.