1. Each Party shall ensure, in accordance with Article VIII:1 of the GATT 1994 and its interpretive notes and Article 6 of the WTO Agreement on Trade Facilitation, that all fees and charges of whatever character (other than import and export duties, charges equivalent to an internal tax or other internal charges applied consistently with Article IIl:2 of the GATT 1994, and anti-dumping and countervailing duties applied pursuant to its laws and regulations) imposed on, or in connection with, importation or exportation, are limited in amount to the approximate cost of services rendered to imports or exports and do not represent a direct or indirect protection for domestic goods or a taxation of imports for fiscal purposes.
2. Each Party shall promptly publish details and shall make such information available on the internet regarding the fees and charges it imposes in connection with importation or exportation and shall make such information available to the other Party, upon written request, in the English language.
Article 2.16. Non-Tariff Measures
1. Unless otherwise provided, neither Party shall adopt or maintain any non-tariff measure on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party, except in accordance with its WTO rights and obligations or with this Agreement.
2. Each Party shall ensure the transparency of its non-tariff measures permitted under paragraph 1 and shall ensure that any such measures are not prepared, adopted or applied with the view to, or with the effect of, creating unnecessary obstacles to trade with the other Party. Any new measure or modification to an existing measure shall be duly notified to the other Party as soon as practicable, but, in any event, no later than the day the measure takes effect.
3. Each Party shall ensure that its laws, regulations, procedures and administrative rulings relating to non-tariff measures are promptly published, including on the internet where feasible, or otherwise made available in such a manner as to enable the other Party to become acquainted with them.
4. lf a Party considers that a non-tariff measure of the other Party is an unnecessary obstacle to trade, that Party may nominate such a non-tariff measure for review by the Committee on Trade in Goods (CTG), established under this Agreement, by notifying the other Party no later than thirty (30) days before the date of the next scheduled meeting of the CTG. A nomination of a non-tariff measure for review shall include reasons for its nomination and, if possible, suggested solutions. The CTG shall immediately review the measure with a view to securing a mutually agreed solution to the matter. Review by the CTG is without prejudice to the Parties' rights under Chapter 15 (Dispute Settlement).
Article 2.17. State Trading Enterprises
Nothing in this Agreement shall be construed to prevent a Party from maintaining or establishing a state trading enterprise in accordance with Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994.
Article 2.18. Revision Clause
1. Upon request of a Party, the Parties shall consult to consider accelerating, or broadening the scope of the elimination of customs duties as set out in Annex 2A (Schedule of Specific Tariff Commitments of India} and Annex 2B (Schedule of Specific Tariff Commitments of the UAE). Further commitments between the Parties to accelerate the elimination of a customs duty on a good, or to include a good in Annex 2A (for India) and Annex 2B (for the UAE), shall supersede any duty rate or staging category determined pursuant to their respective Schedules of Tariff Commitments. These commitments shall enter into force on the date specified by the Parties following the exchange of notifications certifying that they have completed their internal legal procedures.
2. Nothing in this Agreement shall prohibit a Party from unilaterally accelerating, or broadening the scope of the elimination of customs duties set out in its Schedule of Tariff Commitments in Annex 2A (for India) or Annex 2B (for the UAE). Any such unilateral! acceleration, or broadening of the scope of the elimination of customs duties will neither permanently supersede any duty rate or staging category determined pursuant to their respective Schedule nor will serve to waive that Party's right to impose at a later time the duty rate or staging category that is determined for that later time by their respective Schedule.
3: For greater certainty with respect to paragraph 2, a Party may:
(a) raise a customs duty back to the level established in its respective Schedule of Tariff Commitments in Annex 2A (for India) or Annex 2B (for the UAE) following a unilateral reduction; or
(b) maintain or increase a customs duty as authorised by the Dispute Settlement Body of the WTO.
Article 2.19. Exchange of Data
1. The Parties recognise the value of trade data in accurately analysing the implementation of this Agreement. The Parties shall cooperate with a view to conducting periodic exchanges of data relating to trade in goods between the Parties.
2. The Parties may engage in such periodic exchanges within the CTG for such purposes and for any other purposes in furtherance of the obligations described in this Chapter as the CTG may determine.
3. A Party shall give positive consideration to a request from the other Party for technical assistance for the purposes of the exchange of data under paragraph 1.
Article 2.20. Committee on Trade In Goods
1. The CTG is established under the Joint Committee.
2. The functions of the CTG shall include:
(a) the monitoring and review of measures taken and implementation of commitments;
(b) the exchange of information and review of developments;
(c) the preparation of technical amendments, including HS updating, and otherwise assisting the Joint Committee;
(d) any other matter referred to it by the Joint Committee; and
(e) the preparation of recommendations and reports to the Joint Committee, as necessary.
3. The CTG shall establish such subcommittees as may be necessary under this Agreement, including on Customs Procedures and Trade Facilitation, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, and Trade Remedies. All such subcommittees shall report to the CTG.
4. Each Party has the right to be represented in the CTG. The CTG shall act by consensus.
5. The CTG shall meet at least every two (2) years or more frequently as the Parties agree otherwise. The meetings of the CTG shall be chaired jointly by the UAE and India.
6. The Parties shall examine any difficulties that might arise in their goods trade and shall endeavour to seek appropriate solutions through dialogue and consultations.
Chapter 3. RULES OF ORIGIN
Article 3.1. Definitions
For the purposes of this Chapter:
"aquaculture" means the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates, and aquatic plants, from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as, regular stocking, feeding, protection from predators;
"carrier" means any vehicle for air, sea, and land transport. However, the carriage of product can be made through multimodal transport;
"CIF value" means the price actually paid or payable to the exporter for a product when the product is loaded out of the carrier, at the port of importation, including the cost of the product, insurance, and freight necessary to deliver the product to the named port of destination. The valuation shall be made in accordance with Article VII of the GATT 1994, including its notes and supplementary provision thereof; and the Customs Valuation Agreement;
"competent authority" refers to:
(a) for India, the Department of Commerce or the Central Board of Indirect Taxes and Customs (CBIC) or any other agency notified from time to time; and
(b) for UAE, to the Ministry of Economy or any other agency notified from time to time;
"Customs Administration" refers to:
(a) for India, the CBIC; and
(b} for UAE, the Federal Customs Authority;
"customs value" means the value of a product as determined in accordance with Article VII of the GATT 1994, including its notes and supplementary provisions thereof; and the Customs Valuation Agreement;
"Ex Works price" means the price paid for the product ex-works to the manufacturer in the Party where the last working or processing is carried cut, provided the price includes the value of all the materials used;
"Free-On-Board (FOB) value" means the price actually paid or payable to the exporter for a product when loaded onto the carrier at the named port of exportation, including the cost of the product, and all costs necessary to bring the product onto the carrier;
"generally accepted accounting principles (GAAP)" means the recognised consensus or substantial authoritative support in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information and the preparation of financial statements. These standards may encompass broad guidelines of genera! application as well as detailed standards, practices and procedures;
"Harmonised System (HS)" means the Harmonised Commodity Description and Coding System, including its general rules and legal notes, set out in the Annex to the International Convention on the Harmonised Commodity Description and Coding System. However, based on the HS, the Parties could make any amendments which may be adopted and implemented by the Parties in their respective tariff schedules;
"indirect material" means a material used in the production, testing, or inspection of a product, or the operation of equipment associated with the production of a product but not physically incorporated into the product, including:
(a) fuel and energy;
(b) tools, dies and moulds;
(c) spare parts and materials used in maintenance of equipment;
(d) lubricants, greases, compounding materials used in production or used to operate equipment;
(e) gloves, glasses, footwear, clothing and safety equipment;
(f) equipment, devices, supplies used for testing or inspecting of products;
(g) catalysts and solvents; and
(h) any other material that is not incorporated into the product but for which the use in the production of the products can be reasonably demonstrated to be a part of that production;
"issuing authority" refers to the authority(ies) designated by each Party for issuance of certificate of origin. The list of issuing authorities for each Party are given in Annex 3C (Issuing Authorities of the Government of India) and Annex 3D (Issuing Authorities of the Government of the UAE);
"manufacture" refers to any kind of working or processing, or specific operations not including simple assembly;
"material" means ary ingredient, raw input, component or pait that is used in the production of a product and physically incorporated into it;
"non-originating material (NOM)" means any materials whose country of origin is a country other than the Parties (imported non-originating), any materials whose origin cannot be determined (undetermined origin) or a material that does not qualify as originating under this Chapter;
"originating material" means materials that qualify as originating under this Chapter;
"product" means that which is obtained by growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, extracting or manufactured, even if it is intended for later use in another manufacturing operation;
"production" refers to growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, manufacturing and processing;
"tariff classification" means the classification of a product according to the HS, including its General Interpretative Rules and Explanatory Notes thereof;
"territorial waters" means waters extending up to twelve (12) nautical miles from the baseline in accordance with applicable rules of international law;
"territory" means the territory as defined in Article 1.4 (Geographical Scope); and
"value of non-originating materials" means the customs value at the time of importation of the non-originating materials used, i.e., the CIF value or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the territory of a Party.
Article 3.2. Origin Criteria
1. For the purposes of this Agreement, a product shall be deemed as originating in a Party and shall be eligible for preferential treatment provided it:
(a) is wholly obtained or produced in the territory of the Party as per Article 3.3 (Wholly Obtained or Produced Product); or
(b) has undergone sufficient working or production as per the Product Specific Rules (PSR) in Annex 3B (Product Specific Rules).
2. The producer or manufacturer has the option to use either of the following two methods of computing the value addition criteria in the PSR at Annex 3B (Product Specific Rules):
(a) (FOB value or Ex Works price) -(Value of NOM) / FOB value or Ex Works price
The differences in value addition percentages depending on the methodology, i.e., FOB value or Ex Works price, are defined in Annex 3B (Product Specific Rules);
(b) Cost of originating material + direct labour cost + direct overhead cost / FOB value or Ex Works price
3. Notwithstanding paragraph 1 above, the final manufacture before export must have occurred in the Party of export.
Article 3.3. Wholly Obtained or Produced Product
For the purposes of this Agreement, the following products shall be considered as being wholly obtained or produced in the territory of a Party:
(a) plant and plant product grown and harvested there;
(b) live animals born and raised there;
(c) products obtained from live animals there;
(d) mineral product and natural resources extracted or taken from that Party's soil, waters, seabed or beneath the seabed;
(e) product obtained from hunting, trapping, fishing or aquaculture conducted there;
(f) product of sea fishing and other marine products taken from outside its territorial waters by a vessel and/or produced by a factory ship registered, recorded or licensed with a Party and flying its flag;
(g) product, other than products of sea fishing and other marine products, taken or extracted from the seabed or the subsoil of the continental shelf or the exclusive economic zone of any of the Parties;
(h) waste or scrap resulting from consumption or manufacturing operations conducted in the territory of that Party, fit only for disposal or recovery of raw materials; and
(i) product produced in the territory of that Party exclusively from product referred to in subparagraphs (a) through (h).
Article 3.4. De Minimis
1. Notwithstanding paragraph 1 of Article 3.2 (Origin Criteria), non-originating materials that do not meet the required change in tariff classification (CTC) , if applicable in the product specific rule (PSR), shall be deemed originating if:
(a) their total value does not exceed ten percent (10%) of the FOB value or Ex Works price of the exported product; or
(b) in the case of textiles and clothing under HS chapters 50-63, the weight of the non-originating material is less than seven percent (7%) of the total weight of the materials used in the production of the exported product or ten percent (10%) of the FOB value or Ex Works price.
2. In the case of a wholly obtained product, a de minimis value not exceeding one percent (1%) of the FOB value or Ex Works price of the exported product is allowed.
Article 3.5. Minimal or Insufficient Operations and Processes
1. Notwithstanding any provisions in this Chapter, a product shall not be considered originating in a Party by merely undergoing any of the following operations in the territory of that Party:
(a) operations to ensure the preservation of products in good condition during transport, and storage (such as drying, freezing or thawing, keeping in brine, removal of damaged parts) and other similar operations;
(b) changes of packaging and breaking up and assembly of packages;
(c) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(d) for textiles: attaching accessory articles such as straps, bands, beads, cords, rings and eyelets; ironing or pressing of textiles;
(e) simple painting and polishing;
(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(g) operations to colour sugar or form sugar lumps;
(h) peeling and removal of stones and shells from fruits, nuts and vegetables;
(i) sharpening, simple grinding or simple cutting;
(j) simple operations such as removal of dust, sifting, screening, sorting, classifying, grading, matching;
(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and ali other simple packaging operations:
(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(m) simple mixing of products, whether or not of different kinds;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
(o) slaughter of animals;
(p) simple testing, calibration, inspection or certification; or
(q) any combination of two or more operations in subparagraphs (a) to (p) above.
2. For the purposes of paragraph 1 above, "simple" describes an activity which needs neither special skills nor machines, apparatus or equipment especially produced or installed to carry out the activity.
Article 3.6. Non-Qualifying Operations
Each Party shall provide that a product shall not be considered to be an originating product merely by reason of:
(a) mere dilution with water or another substance that does not materially alter the characteristics of the product; or
(6) a production or pricing practice in respect of which it may be demonstrated, on the basis of a preponderance of evidence, that the object was to circumvent the provisions of this Chapter.
Article 3.7. Bilateral Cumulation
1. Originating products from the territory of a Party that are used in the production of a product in the territory of the other Party as materials for finished products shall be considered as materials originating in the territory of the other Party where the manufacture of the finished product has taken place.
2. Notwithstanding paragraph 1 above, the last production process should be beyond the minimal or insufficient operations as described in Article 3.5 (Minimal or Insufficient Operations and Processes).
Article 3.8. Packages, Packing Materials and Containers
1. The packages, packing materials and containers for retail sale in which a product is packed for retail sale, when classified together with the product according io Ruie 5(b) of the Generali Rule for the Interpretation of the Harmonised System, shall be disregarded in determining whether all non-originating materials used in the manufacture of a product undergo a CTC applicable to the said product.
2. Wherever such a product is subject to value addition, the value of the packages, packing materials and containers for retail sale in which a product is packed for retail sale shall be taken into account as originating or non-originating, as the case may be, in calculating the value addition for the product.
3. The containers and packing materials exclusively used for the transport or shipment of a product shall not be taken into account for determining the origin of the product.
Article 3.9. Accessories, Spare Parts, Tools
Each Party shall provide that accessories, spare parts, and tools classified and delivered with a product that form part of the products standard accessories, spare parts, or tools as per standard trade practice, shall be considered as originating and part of the product in question. However, this is contingent on:
(a) the accessories, spare parts, or tools are not invoiced separately from the product;
(b) the quantities and value of the accessories, spare parts, or tools are customary for the product; and
(c) the value of the accessories, spare parts, or tools shall be taken into account as originating or non-originating materials, as the case may be, in calculating the value addition of the product as per Article 3.2 (Origin Criteria).
Article 3.10. Indirect Materials
lndirect materials, shall be considered neither originating nor non-originating when the qualifying value addition is calculated as per paragraph 2 of Article 3.2 (Origin Criteria).
Article 3.11. Accounting Segregation
1. Each Party shall provide that the determination of whether fungible products or materials are originating products shall be made ordinarily by physical segregation of each product or material; or, in case of any difficulty, an inventory management method, such as averaging, last-in, first-out, or first-in, first out, recognised in the GAAP of the Party in which the production is performed, or otherwise accepted by the Party in which the production is performed.
2. The accounting method shall continue to be used for those fungible products or materials throughout the fiscal year of the Party and shall be recorded, applied and maintained in accordance with the GAAP applicable in the Party in which the product is manufactured. The method chosen must:
(a) permit a clear distinction to be made between originating and non- originating materials including materials of undetermined origin acquired and/or kept in stock; and
(b) guarantee over the relevant accounting period of twelve (12) months that no more products receive originating status than would be the case if the materials had been physically segregated.
3. A producer using an inventory management system shall keep records of the operation of the system that are necessary for the competent authority of the Party concerned to verify compliance with the provisions of this Chapter.
4. The competent authority may require from its exporters that the application of the method for managing stocks as provided for in this Article will be subject to prior authorisation.
Article 3.12. Transport
1. Preferential treatment in accordance with this Agreement shall only be granted to originating products that are transported directly between the Parties.
2. Notwithstanding paragraph 1 above, each Party shall provide that if an originating product is transported outside the territories of the Parties, the product retains its originating status if the product:
(a) remains under customs control in the territory of a non-Party and has not entered the trade or consumption in the non-Party; and
(b) does not undergo an operation outside the territories of the Parties other than: unloading; reloading; separation from a bulk shipment; storing; labelling or marking, if required by the importing Party; or any other operation necessary to preserve it in good condition or to transport the product to the territory of the importing Party.
3. An importer shall upon request supply appropriate evidence to the customs authorities of the importing Party that the conditions set out in paragraph 2 have been fulfilled.
Article 3.13. Proof of Origin
1. For products originating in a Party and otherwise fulfilling the requirements of this Chapter, the proof of origin of an exported product shall be provided through any of the following means:
(a) a paper Certificate of Origin in electronic or hard copy format issued by a competent authority referred to in Article 3.14 (Certificate of Origin and Certification Procedures);
(b) a fully digitised Certificate of Origin (E-Certificate) issued by a competent authority and exchanged by a mutually developed electronic system as per Article 3.34 (Exchange of Electronic Data on Origin);
(c) an origin declaration made out by an approved exporter referred to in Article 3.35 (Origin Declaration).
2. A Certificate of Origin shall be valid for twelve (12) months from the date of issue in the exporting Party.