India sets origin rules for tariff breaks under its New Zealand trade pact

India has set the detailed origin rules that importers and exporters must follow to use tariff preferences under its free trade agreement with New Zealand, adding a key layer of customs guidance just days before the pact’s rules take effect.

The Central Board of Indirect Taxes and Customs notified the Customs Tariff (Determination of Origin of Goods under the Free Trade Agreement between India and New Zealand) Rules, 2026, through Notification No. 82/2026-Customs (N.T.) on October 12, 2026. The rules come into force on October 20, 2026, and establish how goods will be treated as originating in India or New Zealand for preferential customs duty treatment.

The new framework matters because tariff preferences under free trade agreements do not apply automatically. A product must meet the agreement’s origin test, and the trader claiming the lower duty rate must be able to prove it. The rules cover core issues including product-specific origin requirements, value-content calculations, treatment of materials from the partner country, acceptable proof of origin, customs verification, record retention, and the conditions for goods that pass through a third country before reaching the importing market.

For businesses, the practical effect is that eligibility will depend on the product and on how it is made, sourced, documented, shipped, and declared at customs. The rules say some goods will qualify only if they are wholly obtained in one of the two countries. Others will need to meet a required change in tariff classification, a minimum qualifying value content, a specified production process, or a combination of those tests. The product-specific rules are tied to the HS 2022 customs classification system.

Where a value-content threshold applies, the rules allow two methods to calculate it. One method, often called build-down, subtracts the value of non-originating materials from the product’s free-on-board value and then measures the qualifying share. The other, build-up, measures the share of the free-on-board value represented by originating materials. That matters for manufacturers using mixed inputs because the method chosen can affect whether the product reaches the required threshold.

The rules also allow bilateral cumulation. In practice, that means a material that already qualifies as originating in one partner country can be treated as originating in the other when it is used there in the production of a finished good, as long as the agreement’s conditions are met. A New Zealand producer, for example, may be able to count a qualifying Indian input as originating when assessing the final product. But the rules make clear that this is not automatic. Companies must establish the origin of the material and keep supporting records.

There is also a limited tolerance for some non-originating materials. Under the de minimis provision, goods outside HS Chapters 50-63 can still qualify in certain cases if the relevant non-originating materials that prevent them from meeting a tariff-classification change requirement do not exceed 10% of the product’s free-on-board value. For products in HS Chapters 50-63, the limit is generally 10% of the total weight or value. The rules also provide a separate 1% tolerance in certain cases involving wholly obtained goods. Even so, the tolerance does not remove the need to satisfy other applicable origin requirements.

The notification draws a firm line around operations that do not create origin status on their own. Simple actions such as preserving goods for transport or storage, packaging them for sale, sorting, screening, cutting, bending, simple mixing, simple assembly, painting, polishing, or affixing labels and logos are listed as insufficient operations. In other words, traders cannot turn a non-originating product into an originating one merely by carrying out minor handling or finishing work in India or New Zealand.

One of the most closely watched parts of the rules is the treatment of goods that move through a third country. Rule 15 allows originating goods to keep that status during transit, but only under strict conditions. The goods must not undergo further production or unauthorized operations outside India and New Zealand. Limited steps are permitted, including unloading, reloading, storage, repacking, certain relabeling, splitting or consolidating loads, and operations needed to preserve the goods or move them onward. The shipment must also remain under customs control in the transit country.

That point could have direct implications for the beverage trade. New Zealand wine, beer ingredients, and other beverage products often move through regional shipping hubs before reaching India. Under the new rules, those shipments may still qualify for preferential tariff treatment if the transit conditions are met and the importer can show that the goods stayed under customs supervision and were not materially altered. For wine exporters in particular, the rules reduce uncertainty around whether third-country routing could break origin status, but only if paperwork is complete and handling in transit stays within the allowed limits.

The documentary burden is significant. To support compliance for third-country shipments, customs may ask for transit-country customs documents, bills of lading, airway bills, multimodal transport documents, a non-manipulation certificate, or other records. More broadly, the rules recognize two forms of proof of origin: a Certificate of Origin issued by an authorized authority, or an origin declaration completed by an eligible declarant. Those documents must include details such as the exporter and importer, HS code, description of goods, shipment data, the origin criterion used, weight, and invoice references.

The rules also leave room for importers to correct missed claims. If an importer does not claim preferential treatment at the time of import but the goods qualified then, Rule 25 allows a post-importation refund claim. The normal deadline is 12 months from the date of importation, unless domestic law permits a longer period. To obtain the refund, the importer must submit the required proof of origin, import records, and supporting information. If a claim turns out to have been wrong, the importer must correct the relevant documentation and pay any additional duty and applicable penalties.

Record-keeping requirements are broad and long-lasting. Companies involved in origin claims must generally retain relevant records for at least five years, or longer if domestic law requires. The material can include bills of materials, supplier declarations, purchase invoices, import records for inputs, production records, cost breakdowns, value-content calculations, freight and insurance documents, certificates of origin, origin declarations, and transport documents. The rules allow those records to be kept electronically, digitally, or in writing, as long as they can be retrieved and comply with domestic law.

Customs authorities in either country are also given a structured verification process. They may verify origin claims at the time of importation or after the goods have been released. Verification can involve requests to an issuing authority, exporter, producer, approved exporter, or status holder, and can extend to a verification visit with permission. The rules set response periods for different stages. Verification of certificate authenticity is to be answered within 30 days. Inquiries into suspected inaccurate origin determinations and direct information requests must generally be answered within 60 days, with a possible extension of up to 30 days. If a verification visit is requested, preferential treatment may be denied if consent is not obtained within 30 days after the authority receives the request.

The rules say customs may require payment of duties or a guarantee while verification is pending. If the review later confirms that the goods qualified, the preferential treatment must be restored and excess duties refunded, or guarantees released, in line with applicable law. The same framework gives customs the power to deny preferential treatment when the goods do not meet the origin requirements, when the evidence is not sufficient, when requested information is not provided, or when there is a failure to cooperate with verification. In some cases involving persistent or deliberate misrepresentation of origin, temporary suspension is also allowed, with a normal limit of six months unless another period is agreed.

Taken together, the notification turns the trade deal’s market-access promise into an enforceable customs regime. For companies planning to use the agreement from October 20, the main question is no longer whether preferences exist, but whether each shipment can withstand a document-by-document origin review. That is likely to be especially important for sectors such as beverages, where imported products may move through third-country logistics chains before entering India and where a preferential tariff claim could depend as much on transit records and labeling controls as on where the product itself was made.