The full form of AINIFTA is the Asean-India free trade area. It is one of the most significant free trade agreements between India and the nations of the ASEAN. Economically and in terms of trust, Aípta is considered to improve trade liberalization, the lowest tariffs and initiate novice business opportunities between two economies. The agreement also offers tax free access to Southeast Asia of high value for Indian exports and increases export diversification and industrial competitiveness.
What is the Asean-India free trade area (AINIFTA)?
The objective of the Asean -India free trade area was determined through two different negotiation phases, that is, January 2010, for products and August 2011, for services/investments. The main objectives are:
- Eliminate or reduce customs duty on negotiated goods between India and ASEAN.
- Facilitate the trade of services and investment flows.
- Promote economic cooperation through construction capacity and technical cooperation.
The ten member states of Asean under AINIFTA are:
- Brunei Darussalam
- Cambodia
- Indonesia
- Laos (lao pdr)
- Malaysia
- Myanmar
- Philippines
- Singapore
- Thailand
- Vietnam
Key Advantages of Aíbta for Indian Exporters
Zero service access
Indian exports of most goods, from clothing to engineering products, are eligible for zero customs tariffs when entering the nations of ASEAN, reduce costs and improve prices competitiveness.
Increased market penetration
With more than 650 million consumers within Asean, the Indian industry earns new markets, increasing sales and decreased dependence on conventional markets.
Improved competitivess
Preferential tariff treatment under AINIFTA helps India merchandise to compete better with the merchandise of the nation of non -members, thus gaining market share.
Simplified Customs
Simplified customs processes and the use of origin certificates (COO) reduce documentation, authorization time and logistics bottlenecks.
DPR protection
AIFTA’s provisions facilitate the application of strictest intellectual property rights, important criticisms for exports of pharmaceutical products, software and high -value processed products.
“To obtain an integral understanding of how free trade agreements and their implications in the dynamics of global trade work, you can consult our detailed guide on Understand free trade agreements (FTA) and their global impact.“
What is the Aifta (COO) certificate?
An AINIFTA certificate is a signed certificate used to confirm that Indian goods exported to ASEAN come from India and, therefore, are eligible for preferential tariff treatment. Its outstanding points include:
- Purpose: Confirm the country of origin of the exported merchandise and benefit from the lower or zero tariffs under AINIFTA.
- When necessary: it is presented in the import port at the time of customs authorization to benefit from preferential rates.
- Coo Preferential vs. non -preferential
- The preferential coo (Aíbta Coo) makes the concession of duty eligible under the commercial agreement.
- The non -preferential coo simply certifies the origin, but does not make the exporter eligible for tariff preferential rates.
[Know more about CoO Certificate of Origin]
What is AI form in Aíbta?
According to the Asean-India Free Trade (AIFTA) area, form AI is the official format of the certificate of origin (COO) used to certify that the negotiated goods between India and the Nations of the ASEAN comply with the criteria of rules of origin and, therefore, are eligible for treatment with preferential rates.
Form AI is essential to claim reduced or zero service benefits under the agreement and must be submitted at the time of customs authorization.
Key characteristics of form AI:
- Aim: Certifies the Indian or Asean origin of the goods.
- Issued by: DGFT or agencies approved as export inspection agencies.
- Format and validity: You must follow the Aifta prescribed template and is generally valid for 12 months.
- Required for: Taking advantage of tariff concessions under Aíbta.
Why the form of AI is important:
- Ensures compliance with the rules of preferential origin.
- It is mandatory to take advantage of the benefits of tax or tax free taxes.
- Without it, importers cannot claim tariff preference.
Tip for exporters: Review that form AI is filled, signed and compatible with all the relevant documentation before shipping. Even minor errors can lead to tax delays or tax rejection in the import port.
Who issues the Aifta certificate in India?
- General Directorate of Foreign Trade (DGFT): Main issuance authority through its regional offices and web platform.
- Approved agencies: for example, the Export Inspection Agency (EIA).
Eligibility requirements for the AIFTA certificate
An exporter will be eligible for a AINIFTA coo with the following requirements:
- Product origin requirements: The product must comply with the “substantial transformation” or “substantial transformation” under the rules of origin of AINIFTA.
- Valid IEC: The importer example code (IEC) of the exporter must be valid on the DGFT portal.
- Compliance with rules of origin: satisfactory documents and processing records to demonstrate compliance with the rules of origin of AINIFTA.
AINIFTA CERTIFICATE APPLICATION PROCESS
Here are the steps to obtain your Coo Aifta:
- Register/log in: Portal for AIFTA application is Trade.gov.in (Trade Connect Platform) introduced by DGFT. IEC is mandatory to be active for any online TLC application.
- FILLING APPLICATION: Submit the online CO application form, product details, HS codes, origin specifications.
- Load documents: Load the required documents (see the section below) in PDF format.
- Verification: DGFT verifies the details and look for clarifications, if any.
- Issuance: With approval, AINIFTA CO is generated electronically, usually in 2-3 business days.
Documents necessary for the AINIFTA certificate
To facilitate the application, keep the following ready:
- IEC certificate (PDF)
- DGFT and password login ID
- Class 3 DSC: Based on the organization or now with AADHAR OTP is also available for electronic firmation
- Invoice and packaging list.
- Declaration of origin of the manufacturer
- Product details and code statements HS
- Origin test (material invoices, processing statements, etc.)
- Shipping invoice / airway invoice and shipping invoice
- Raw material invoices to verify whether they are obtained completely in India or not
| Detailed report | Rate (INR) |
|---|---|
| Government rate | 736 |
| Single Registration Rate | 500 |
| Application processing rate | 2,000 |
| Total | 3,236 |
Note: The rates are subject to review under notifications issued by DGFT.
Errors to avoid requesting Aífta
- Incorrect HS codes: delay or rejection can occur due to erroneous classification.
- Documents dated or non -valid: renew IEC and DSC at all times.
- Missing statements: The manufacturer must declare origin.
- Failure to comply with DGFT guidelines: adherent to the last DGFT manual and public notices.
Aifta’s most advantageous sectors
- Textiles and clothing: The concession in duty increases the competitiveness of the economies of the ASEAN Hungry for clothing.
- Pharmaceutical products: the reduced rate of bulk medications and formulations benefit frugal consumers.
- Food agriculture: spices, tea and processed foods benefit from cost advantage.
- Electronics: Components and finished products enjoy easier market access.
- Engineering goods: car components, machinery and capital goods enjoy lower supplies costs.
Real world example
Case study: There was a 45% increase in exports of M/S industries ginza of cotton clothing to Vietnam in a year from the beginning of the implementation of AINIFTA and saved more than 50 duty lakhs. The facilitated authorization of customs and preferential rates allowed the Ginza industries to create new distribution networks in the city of Ho Chi Minh and Hanoi through the facilitation from end to the end of AFOO.
Conclusion
The Asean-India free trade agreement is a powerful weapon for Indian exporters to reach growth in Southeast Asia. It facilitates the opening of tax free access, simplified customs authorization and the protection of the DPI through AINIFTA, which helps companies take their business to every corner of the world. Compliance with the rules of origin and the examination of applications are essential to take advantage of these advantages.
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