COO – India-UAE Comprehensive Economic Partnership Agreement (IUCEPA): Facilitating Bilateral Commerce
Introduction
The India-UAE Comprehensive Economic Partnership Agreement (CEPA) marks a pivotal milestone in India’s global economic strategy and the wider UAE-India relationship. Entering into force on May 1, 2022, the IUCEPA is India’s first comprehensive trade agreement with a major Middle Eastern partner and covers goods, services, investment, technology, and customs cooperation. At its heart is the Certificate of Origin (COO) — a key enabler for businesses to access preferential tariffs and smoother customs processes. This blog explains IUCEPA, deciphers the importance of the COO, outlines its benefits, discusses common challenges in its issuance, and offers a concluding perspective for exporters looking to maximize this bilateral opportunity.
What is the IUCEPA and COO?
India-UAE Comprehensive Economic Partnership Agreement (CEPA)
IUCEPA is a full-spectrum free trade agreement covering 18 chapters and 11 annexes that span trade in goods, services, rules of origin, safeguards, IP, digital trade, customs, government procurement, and investment. Noteworthy highlights include:
- Elimination or reduction of tariffs on over 80% of products traded between both nations.
- Coverage of 11,908 tariff lines for India and 7,581 for the UAE.
- Market access for services in 11 sectors and more than 100 sub-sectors including IT, healthcare, finance, tourism, construction, and engineering.
- Provisions for mutual recognition, simplified customs, removal of technical trade barriers (TBT), sanitary and phytosanitary (SPS) standards, and an institutional framework for continued dialogue and review.
The agreement has catalyzed bilateral commerce, with merchandise trade having doubled to over $83 billion in 2023-24, and non-oil trade comprising more than half the volume.
Certificate of Origin (COO) under IUCEPA
The COO is a mandatory legal document issued by authorized agencies (such as the DGFT or Export Inspection Authority in India and the UAE’s Ministry of Economy), proving that exported goods satisfy the “origin” criteria under IUCEPA. It must accompany every shipment to qualify for preferential tariffs, duty exemptions, and other treatment.
- Format: Certificates can be issued in physical and, now, digital (e-COO) format.
- Timeliness: Exporters should obtain COO within five days of export; in exceptional cases, COOs may be issued retrospectively but must be properly marked.
- Rules of Origin: Products must be wholly obtained/produced in the exporting country or adhere to product-specific origin requirements as listed in CEPA Annexes.
Why the COO under India-UAE CEPA is Necessary
Claiming Preferential Tariff Benefits
Without a valid COO, goods cannot access the reduced or zero tariffs set under the agreement. For example, Indian exports of textiles, gems, jewelry, food products, and engineered goods, or UAE exports to India, can leverage duty-free or lower duties only if accompanied by a COO in the prescribed format.
Ensuring Regulatory Compliance
Customs in both countries require presenting COO at clearance to ensure products genuinely qualify for CEPA benefits, preventing misuse or transshipment from third countries.
Safeguarding Business Interests
A COO protects exporters/importers from denial of preferential treatment due to disputes over product eligibility, retroactive claims, or paperwork discrepancies. Recent CBIC instructions reaffirm the validity of electronically signed COOs, but stress compliance with format/filling requirements.
Transparency and Efficiency
Acceptance of e-COO reduces paperwork, expedites customs, and decreases the risk of lost documentation—making the process digital, streamlined, and more business-friendly.
Key Benefits of CEPA and COO
Dramatic Market Access Expansion
UAE offers near-immediate zero-duty access for 90% of Indian exports in value terms, including textiles, jewelry, foodstuffs, chemicals, and pharmaceuticals.
Indian exporters receive easier access to the broader Middle Eastern and African markets via UAE, with diversified trade basket initiatives under the CEPA.
Reduced Costs for Exporters
Through elimination or reduction of customs duties, exportable goods become more competitive:
Example: A goods category with 5% UAE duty drops to 0% for Indian exporters with COO, leading to direct cost savings.
Some products phase in tariff reductions—COO enables tracking eligibility over time.
Services, Investment, and Digital Trade Advantages
Enhanced market access for service providers and digital businesses, streamlined movement of professionals, and increased protection for intellectual property foster innovation and entrepreneurship. The agreement also includes provisions for investment and procurement access. Documentation, and Trade Facilitation
Easier customs clearance, simpler import licensing, and acceptance of international standards for technical regulations.
Digital e-COO permitted, saving time and logistics costs and reducing transaction errors.
Institutional Support and Review
Joint committees established to address issues, review tariffs and market access, and offer a structured forum for resolving disputes and improving procedures over time.
Challenges in COO Issuance under IUCEPA
Documentation and Rules of Origin Complexity
Exporters must carefully navigate product-wise rules of origin, value addition thresholds, and cumulation criteria. Errors can deny preferential access or prompt post-export audits or disputes.
Retrospective issuance is allowed under CEPA (Rule 15(11)), but must be properly marked and filed within 12 months of shipment.
Processing and System Incompatibilities
CBIC and UAE customs have addressed the digitalization of COOs; however, technical glitches, incorrect formats, or missing digital signatures can delay or deny customs clearance.
Capacity Constraints for SMEs
Many smaller exporters lack awareness or expertise regarding application procedures, digital document submissions, and compliance with ever-evolving CEPA origin criteria, risking missed opportunities or delays.
Handling Disputes, Quota Management, and Retroactive Claims
Discrepancies in documentation, errors in marking “ISSUED RETROSPECTIVELY,” or non-uploading on e–Sanchit can result in denial of refunds or duty exemptions.
Section 149 of the Customs Act limits amendments to Bill of Entry after out-of-charge, causing procedural hurdles for correcting COO-based claims.
Ongoing Policy Updates and Trade Barriers
Both governments continue to update conditions and interpretation of rules, so exporters/importers need to stay vigilant to new circulars and mandates.
Conclusion
The Certificate of Origin (COO) under the India-UAE Comprehensive Economic Partnership Agreement (IUCEPA) is the linchpin of realizing tariff and trade benefits for businesses engaged in bilateral commerce. As both countries target $100 billion in non-oil trade by 2030, efficient and accurate utilization of COO will increasingly determine exporters’ success.
Despite challenges in its issuance—ranging from technical documentation to regulatory compliance—the COO system has rapidly evolved with digitalization, better policy alignment, and clarifications to help exporters seize CEPA opportunities.
Indian and UAE businesses looking to capitalize on IUCEPA should dedicate resources to mastering COO application, stay abreast of evolving guidelines, seek expert help when needed, and leverage institutional support. This not only ensures compliance but opens substantial avenues for cost savings, market growth, and international partnerships.
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