--- title: "Why “Made in India” or “Made in the UK” May Not Automatically Mean Your Product Qualifies for FTA Tariff Benefits" date: 2026-07-20 author: "Aditya Bhattacharya" url: https://ksandk.com/trade-commerce/why-made-in-india-or-made-in-the-uk-may-not-automatically-mean-your-product-qualifies-for-fta-tariff-benefits/ --- # Why “Made in India” or “Made in the UK” May Not Automatically Mean Your Product Qualifies for FTA Tariff Benefits Posted On - 20 July, 2026 • By - Aditya Bhattacharya ![](https://ksandk.com/wp-content/uploads/FTA-Tariff-Benefits.webp) ## Introduction The [India–UK Comprehensive Economic and Trade Agreement](https://ksandk.com/trade-commerce/india-uk-ceta/) (“India–UK CETA” or the “FTA”) has opened a new chapter for businesses trading between India and the United Kingdom. With significant tariff liberalisation across bilateral trade, exporters and importers on both sides have an opportunity to reduce customs costs and improve their competitiveness. There is, however, an important catch. A product does not automatically qualify for preferential [customs duty](https://ksandk.com/practice-areas/tax-law-firm/) simply because it is manufactured in India or the United Kingdom. To claim preferential tariff treatment under the India-UK FTA, a product must qualify as an “originating product” under the Agreement’s **Rules of Orig**i**n (“RoO”)**. For businesses, this could become one of the most important and potentially misunderstood elements of the new trade regime. A product may carry a “Made in India” label for commercial or regulatory purposes and yet fail to satisfy the Rules of Origin required for preferential tariff treatment under the FTA. Understanding the distinction is critical. ## What Are Rules of Origin Under the India-UK FTA? Rules of Origin determine the economic nationality of a product for the purpose of applying preferential tariffs under a trade agreement. Their principal objective is straightforward: the benefits negotiated between India and the UK should accrue only to goods that genuinely originate within the participating economies, rather than allowing goods from third countries to obtain preferential market access merely by being routed through India or the UK. Consider a simple example i.e. a product manufactured substantially in China cannot ordinarily be shipped to India, undergo minimal repackaging, and then be exported to the United Kingdom as an Indian-origin product solely to obtain preferential tariff benefits. The Rules of Origin are specifically designed to prevent this form of trade deflection. Accordingly, the fundamental question for every exporter and importer is not simply where a product was shipped from, but where it legally originates under the Agreement. ## Three Questions Every Exporter Should Ask Before claiming preferential tariff treatment, businesses should answer three fundamental questions: - **What is the correct HS classification of the finished product?** - **What Product-Specific Rule of Origin applies to that HS classification?** - **Does the product’s manufacturing process and supply chain satisfy that rule?** An incorrect answer at any stage could result in preferential tariff treatment being denied. ## Wholly Obtained Products: The Simplest Category Certain products qualify as originating because they are wholly obtained in India or the United Kingdom. This category generally applies to naturally occurring products, including specified categories of: - agricultural produce; - plants and plant products; - live animals and animal products; - minerals; - fish and other marine products; and - other goods obtained entirely within the territory of a Party. For example, qualifying agricultural produce grown and harvested entirely in India is generally far easier to classify as originating than sophisticated manufactured goods assembled using globally sourced components. For most modern businesses, however, the analysis rarely ends here. ## Manufactured Products Containing Foreign Inputs Global manufacturing today depends upon integrated international supply chains. An Indian manufacturer may import electronic components from Taiwan, specialised machinery from Germany, steel from Japan or chemicals from South Korea before producing a finished product for export to the United Kingdom. Similarly, UK manufacturers frequently source raw materials and intermediate goods from multiple jurisdictions before exporting finished products to India. The use of imported materials does not automatically prevent a product from qualifying under the India–UK FTA. Instead, the relevant question is whether the manufacturing undertaken in India or the United Kingdom satisfies the applicable Product-Specific Rule of Origin (“PSR”) prescribed for that product. ## Product-Specific Rules: Every Product Has Its Own Test The India-UK FTA does not prescribe a single origin rule applicable to all goods. Instead, each tariff classification is accompanied by a specific origin requirement tailored to that category of products. Depending upon the relevant HS classification, the applicable rule may require: - a prescribed **Change in Tariff Classification (CTC)**; - compliance with a specified **Regional Value Content (RVC)** threshold; - completion of designated manufacturing or processing operations; or - a combination of these requirements. Accordingly, two products manufactured by the same company may be subject to entirely different origin requirements. Correct tariff classification therefore becomes the foundation of any Rules of Origin analysis. ## Change in Tariff Classification (CTC) One of the most common origin tests requires imported non-originating materials to undergo sufficient transformation during the manufacturing process. This is determined by examining whether the finished product falls under a different tariff classification from the imported inputs. Depending upon the Product-Specific Rule, the required tariff shift may occur at: - Chapter level (CC); - Heading level (CTH); or - Sub-heading level (CTSH). The higher the required tariff shift, the greater the level of transformation expected under the Agreement. Simple assembly operations may therefore be insufficient if the prescribed tariff change is not achieved. ## Regional Value Content (RVC) Certain products must also satisfy a Regional Value Content requirement. This test measures the proportion of value that is created within India or the United Kingdom through originating materials, labour, manufacturing expenses and other qualifying costs. Different products are subject to different value thresholds. Businesses claiming preferential treatment should therefore maintain detailed cost records, supplier information and manufacturing documentation capable of demonstrating compliance with the applicable value-content requirement. ## Minimal Processing Does Not Confer Origin The Rules of Origin distinguish genuine manufacturing activity from superficial processing. Accordingly, certain operations are regarded as insufficient to confer originating status, even if they are undertaken within India or the United Kingdom. Although the precise list should always be examined under the Agreement, examples generally include: - simple packaging or repackaging; - labelling or relabelling; - washing, cleaning or ironing; - sorting or grading; - simple mixing; and - other operations that do not result in substantial transformation. Businesses should therefore avoid assuming that any domestic processing automatically establishes origin for FTA purposes. ## Documentation Is Just As Important As Manufacturing Satisfying the substantive Rules of Origin is only part of the compliance exercise. Businesses must also comply with the procedural requirements governing origin claims. This includes maintaining supporting records relating to sourcing, production processes, costing and supplier declarations, together with the prescribed proof of origin or origin declaration required under the Agreement. Customs authorities retain the power to verify origin claims and request supporting documentation after importation. Even where a product genuinely satisfies the applicable Rules of Origin, inadequate documentation may result in preferential tariff treatment being denied, together with demands for customs duty, interest and, where applicable, penalties. ## Common Mistakes Businesses Should Avoid As businesses begin to utilise the India–UK FTA, several practical mistakes are likely to emerge. These include: - assuming that a “Made in India” or “Made in the UK” label automatically establishes origin; - relying on an incorrect HS classification; - overlooking the applicable Product-Specific Rule; - failing to maintain supplier declarations and cost records; - assuming imported inputs automatically disqualify a product from preferential treatment; and - neglecting to retain documentary evidence supporting the origin claim. Many of these risks can be mitigated through advance supply-chain reviews and internal [customs compliance](https://ksandk.com/practice-areas/regulatory-law-firm/) procedures before exports commence. ## Practical Steps for Businesses Companies intending to benefit from the India-UK FTA should undertake a comprehensive review of their products and supply chains before making origin declarations. This review should include: - verifying tariff classifications; - identifying the applicable Product-Specific Rules; - analysing bills of materials and sourcing arrangements; - evaluating manufacturing operations against the applicable origin criteria; - maintaining supplier declarations and cost records; and - establishing internal procedures for origin verification and record retention. For many businesses, relatively modest adjustments to sourcing strategies or manufacturing processes may enable products to qualify for preferential tariff treatment that would otherwise be unavailable. ## Conclusion The India-UK FTA offers significant opportunities to reduce customs duties and improve the competitiveness of [cross-border trade](https://ksandk.com/category/trade-commerce/). However, those benefits are available only where products satisfy the Agreement’s Rules of Origin. Origin under a free trade agreement is a legal concept that differs fundamentally from country-of-origin labelling used for commercial or regulatory purposes. A product bearing a “Made in India” or “Made in the UK” label does not automatically qualify for preferential tariff treatment. Businesses should therefore treat Rules of Origin as a strategic compliance issue rather than a procedural formality. Careful analysis of tariff classification, Product-Specific Rules, manufacturing processes, value addition and documentary requirements is essential before claiming preferential treatment under the Agreement. As trade between India and the United Kingdom expands under the FTA, businesses that integrate Rules of Origin compliance into their procurement, manufacturing and customs strategies will be best placed to maximise tariff savings while minimising the risk of [customs disputes](https://ksandk.com/practice-areas/commercial-litigation-law-firm/), recovery proceedings and denial of preferential benefits. *Last Updated on 21 July, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)