Page 123 - final fill 160 v28 with bleed.ai

Smuggling in India Report 2024-25 80

ii. Misuse of FTA Bene ts

With increasing bilateral and plurilateral Free Trade Agreements (FTAs) and Com-
prehensive Partnership Agreements (CEPAs) among nations, customs duties on
goods traded under these agreements have been steadily declining. Aimed at pro-
moting trade liberalisation, market access, and regional economic integration,
India has signed multiple FTAs and CEPAs with partner countries. All such agree-
ments are supported by Rules of Origin, as a pre-condition to reduced tariffs.
However, cases of forged or fraudulently obtained country-of-origin certificates,
falsified fulfilment of origin norms, and deliberate misclassification of goods to
wrongfully claim FTA concessions have been detected.

4.63%
4.63%

14.81%

62.04%
India-ASEAN FTA
1.85% India-Asia-Pacific Trade Agreement
India-Japan CEPA
India-Korea CEPA
India-Sri Lanka FTA
12.04% India-UAE CEPA

Figure 4: FTA misuse by % of no. of commercial fraud-import cases

Case 2: Misclassi cation of sunroof parts to avail FTA bene t

In March 2025, DRI uncovered a case where sunroof com-
ponents, such as Slider Assy RH, Deflector Assy, and Sun-
shade Assy, were misclassified under CTI 87089900 to
wrongly claim a 10% BCD benefit under the India-Korea
CEPA. The goods were actually classifiable under CTI
87082900, which do not qualify for CEPA benefits. The esti-
mated duty evasion is ₹3 crore.

final fill 160 v28 with bleed.pdf 123 12/19/2025 3:28:01 PM