The Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and Oman) Rules, 2026 - A Comprehensive Analysis.

Introduction

The Government of India, through the Ministry of Finance (Department of Revenue), has notified the Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and Oman) Rules, 2026 vide Notification No. 48/2026-Customs (N.T.) dated 29 May 2026.

These Rules came into effect on 1 June 2026 and lay down the legal framework for determining whether goods traded between India and Oman qualify as 'originating products' and are therefore eligible for preferential tariff benefits under the India-Oman Comprehensive Economic Partnership Agreement (CEPA) signed on 18 December 2025.

The Rules are one of the most important components of the CEPA because preferential customs duty benefits can be claimed only if goods satisfy the prescribed Rules of Origin. The framework is designed to promote genuine trade between the two countries while preventing trade diversion, trans-shipment, and misuse of preferential duty concessions.

Background of the India-Oman CEPA

India and Oman have enjoyed strong economic and strategic relations for many years. The CEPA seeks to strengthen bilateral trade, encourage investments, improve supply chains, and enhance market access for goods and services.

The Rules of Origin notified under the Customs Tariff Act, 1975 ensure that only goods that genuinely originate in India or Oman are entitled to preferential customs duty rates.

Rules of Origin are an essential part of every Free Trade Agreement (FTA) or Comprehensive Economic Partnership Agreement because they determine the 'economic nationality' of a product. Without such rules, goods from third countries could enter a partner country through the member country offering lower tariff rates, thereby defeating the purpose of the agreement.

Objective of the Rules

The main objectives of the 2026 Rules are:

1. To provide clear conditions for determining whether a product is originating.
2. To ensure that tariff concessions are available only to eligible goods.
3. To prevent misuse and circumvention of CEPA benefits.
4. To prescribe documentation and certification requirements.
5. To provide verification procedures for customs authorities.
6. To bring transparency and certainty to bilateral trade.

Scope and Applicability

These Rules apply to imports and exports between India and Oman where preferential tariff treatment is claimed under the CEPA.

Customs authorities, importers, exporters, producers, and designated issuing authorities must comply with the requirements laid down in these Rules. The Rules define several important terms, including:

• Agreement
• Competent Authority
• Customs Administration
• Producer
• Product
• Originating Material
• Non-Originating Material
• FOB Value
• CIF Value
• Ex-Works Price
• Preferential Tariff Treatment

These definitions help ensure uniform interpretation and reduce disputes during implementation.

Origin Criteria

Rule 4 lays down the basic criteria for determining origin. A product will qualify as an originating product if it falls under either of the following categories:

1. Wholly Obtained or Produced

Goods that are entirely produced or obtained within India or Oman automatically qualify as originating products.

2. Substantially Transformed Products

Products that contain imported or non-originating materials may still qualify as originating if they undergo sufficient manufacturing or processing and satisfy the Product Specific Rules (PSR) prescribed in Annexure B.

Value Addition Requirements

The Rules allow two methods for calculating value addition.

(a) Build-Down Method

Under this method, the value of non-originating materials is deducted from the FOB value or Ex-Works price to determine the originating content of the product.

(b) Build-Up Method

Under this method, the originating content is calculated by adding:

• Value of originating materials;
• Direct labour costs; and
• Direct overhead expenses.

The availability of both methods gives manufacturers and exporters greater flexibility in meeting origin requirements.

Wholly Obtained Products

Rule 5 specifies the products that are considered wholly obtained or produced in a Party. These include:

• Plants and agricultural products grown or harvested there;
• Live animals born and raised there;
• Products obtained from such animals;
• Minerals extracted from land or seabed;
• Fish and other marine products caught by vessels of the Party;
• Products extracted from the exclusive economic zone or continental shelf;
• Waste and scrap resulting from production processes; and
• Goods produced entirely from such wholly obtained products.

This concept is especially important for sectors such as agriculture, fisheries, mining, and natural resources.

Cumulation Principle

The Rules provide for bilateral cumulation. This means that materials originating in one Party can be treated as originating materials in the other Party when used in manufacturing.

This provision encourages greater economic integration, strengthens supply chains between India and Oman, and promotes regional value addition.

De Minimis Rule

The Rules contain a de minimis provision that allows a product to qualify as originating even if a small percentage of non-originating materials does not meet the required tariff classification change. This provision recognizes practical business realities and prevents exporters from losing preferential benefits because of insignificant non-originating inputs.

However, such materials must still be included while calculating value addition requirements.

Minimal or Insufficient Operations

Rule 7 identifies certain activities that are considered too minor to confer originating status on a product. These include:

• Preservation operations;
• Packaging and repackaging;
• Cleaning and washing;
• Labelling;
• Simple assembly;
• Simple painting or polishing;
• Cutting or slicing;
• Sorting and grading;
• Ironing or pressing of textiles; and
• Peeling or shell removal.

The principle behind this rule is that minor or cosmetic operations alone should not convert a non-originating product into an originating one.

Direct Consignment Requirements

To claim preferential treatment, goods should generally be shipped directly between India and Oman. Transit through a third country is allowed only under specified conditions. During such transit, the goods must remain under customs control and should not undergo any operation other than unloading, reloading, or activities necessary for their preservation.

Treatment of Packaging and Accessories

The Rules also provide guidance regarding:

• Packaging materials;
• Containers;
• Accessories;
• Spare parts; and
• Tools supplied along with the product.

These provisions ensure consistency in origin determination and help avoid disputes regarding supplementary components supplied with the goods.

Certificate of Origin Framework

The Certificate of Origin (CoO) is the primary document required for claiming benefits under the CEPA. The Rules provide that:

• The certificate must be issued in English;
• It must follow the prescribed format;
• Each certificate must have a unique serial number;
• Electronic certificates may contain QR codes;
• Certificates must be issued by designated authorities; and
• A single certificate may cover multiple products under one import declaration.

Validity of Certificates

Certificates of Origin remain valid for the period prescribed under the Rules and should generally be submitted within that validity period. However, in exceptional situations such as force majeure or circumstances beyond the exporter's control, customs authorities may accept certificates even after expiry, subject to the prescribed conditions.

Verification Mechanism

To protect revenue and prevent misuse of the agreement, customs authorities may conduct verification of origin claims. Verification may include:

• Seeking additional information;
• Examining supporting documents and records;
• Communicating with the issuing authority;
• Conducting on-site verification where necessary; and
• Reviewing production records and cost data.

During the verification process, preferential tariff treatment may be suspended until the claim is verified and found to be compliant.

Record-Keeping Obligations

Exporters, producers, and importers are required to maintain sufficient records supporting their origin claims. Such records generally include:

• Purchase invoices;
• Production records;
• Costing data;
• Bills of materials;
• Shipping documents; and
• Origin declarations.

Maintaining proper records is important because customs authorities may seek supporting evidence even long after the goods have been imported.

Denial of Preferential Treatment

Preferential tariff benefits may be denied in the following situations:

• Origin requirements are not met;
• Certificates of Origin are invalid;
• Verification requests are not satisfactorily answered;
• False declarations are discovered; or
• Supporting documents are inadequate.

These provisions help prevent misuse of the benefits available under the CEPA.

Electronic Certificates and Digital Facilitation

One of the noteworthy features of the Rules is the recognition of electronic Certificates of Origin. Digital certification offers several advantages:

• Reduction in paperwork;
• Faster customs clearance;
• Greater transparency;
• Reduced risk of fraud; and
• Support for paperless trade initiatives.

The provision for QR-code-enabled certificates reflects the growing use of technology in customs administration.

Significance for Indian Exporters

The Rules provide Indian exporters with a clear framework for obtaining preferential access to the Omani market. Key sectors likely to benefit include:

• Pharmaceuticals;
• Engineering goods;
• Textiles and garments;
• Leather products;
• Plastics;
• Chemicals;
• Automotive components; and
• Agricultural products.

The certainty and clarity provided by the Rules can improve competitiveness and encourage greater participation in bilateral trade.

Significance for Importers

Indian importers purchasing goods from Oman can also benefit through:

• Lower customs duties;
• Predictable compliance requirements;
• Faster customs clearance; and
• Reduced transaction costs.

At the same time, importers must exercise due diligence because they may be required to substantiate origin claims during customs verification proceedings.

Summary of Annexure A

Annexure A contains detailed explanatory provisions and definitions used for applying the Rules of Origin. It serves as an interpretative guide covering matters such as:

• Methods for calculating origin;
• Determination of originating status;
• Treatment of materials and inputs;
• Principles of cost valuation;
• Accounting standards;
• Interpretation of tariff classification requirements; and
• Rules relating to fungible materials and inventory management.

The Annexure helps ensure uniform application of origin rules by customs authorities and traders in both countries. In practical terms, Annexure A acts as the technical foundation of the Rules by explaining how origin calculations should be carried out and how various concepts should be interpreted.

Summary of Annexure B - Product Specific Rules (PSR)

Annexure B is one of the most important parts of the Rules. It contains Product Specific Rules applicable to thousands of tariff lines classified under the Harmonized System (HS). The Annexure prescribes the origin criteria for different categories of products, which may include:

• Change in Tariff Classification (CTC);
• Regional Value Content (RVC) or Value Addition;
• Specific Manufacturing Processes; or
• A combination of these requirements.

Examples include:

• Textile products requiring specific manufacturing operations;
• Chemical products requiring tariff classification changes;
• Machinery requiring prescribed value addition levels; and
• Automotive products requiring both tariff change and value addition criteria.

Exporters must carefully examine Annexure B because compliance with the applicable Product Specific Rule is essential for obtaining originating status.

The Annexure ensures that meaningful and substantial manufacturing activities take place in India or Oman before tariff benefits are granted.

Summary of Annexure C - Certificate of Origin Format

Annexure C prescribes the official format of the Certificate of Origin under the India-Oman CEPA. The certificate generally contains:

1. Exporter details;
2. Producer details (where applicable);
3. Importer details;
4. Means of transport;
5. Invoice details;
6. Description of goods;
7. HS classification;
8. Quantity and value;
9. Applicable origin criterion;
10. Exporter's declaration;
11. Certification by the issuing authority; and
12. Official stamp, signature, and serial number.

The Annexure ensures uniform documentation practices in both countries and facilitates smooth customs processing. The provisions relating to electronic issuance and QR-code-based authentication further improve document security and ease of verification.

Conclusion

The Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and Oman) Rules, 2026 mark an important step in implementing the India-Oman CEPA.

Effective from 1 June 2026, the Rules provide a comprehensive framework for determining origin, granting preferential tariff benefits, verifying compliance, and preventing misuse of trade concessions. By combining clear origin criteria, product-specific requirements, digital certification systems, and effective verification procedures, the Rules strike a balance between trade facilitation and revenue protection.

For exporters, importers, customs professionals, and trade advisers, a proper understanding of these Rules is essential. Compliance with the origin requirements will play a key role in maximizing the benefits of the CEPA and strengthening economic ties between India and Oman. As trade between the two countries continues to grow, these Rules will serve as the foundation for preferential market access and deeper commercial cooperation.

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