India–New Zealand Free Trade Agreement: Rules of Origin Framework Under Notification No. 82/2026-Customs (N.T.)

The Central Board of Indirect Taxes and Customs (CBIC), operating under the Ministry of Finance, has formally 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.) dated 12 October 2026, bearing G.S.R. 878(E). These rules have been promulgated in exercise of powers vested under Section 5(1) of the Customs Tariff Act, 1975, and shall take effect from 20 October 2026.

The operative legal instrument underpinning this notification is the Free Trade Agreement between India and New Zealand, which was formally executed on 27 April 2026. The notification establishes a comprehensive legal architecture governing how goods traded between the two countries will be assessed for origin, and consequently, whether they qualify for preferential customs duty treatment under the Agreement.

Key Definitions Under Rule 2

The rules introduce a precise definitional framework. Some of the critical terms include:

  • "Agreement" — refers to the Free Trade Agreement between India and New Zealand signed on 27 April 2026
  • "CIF value" (Cost, Insurance and Freight value) — the price payable to the exporter when goods are loaded off the carrier at the port of importation, inclusive of cost, insurance, and freight to the named destination port
  • "FOB value" (Free-On-Board value) — the price payable when goods are loaded onto the carrier at the named port of exportation, inclusive of all costs to bring goods onto the carrier
  • "QVC" (Qualifying Value Content) — expressed as a percentage, this measures the degree of value addition in determining origin
  • "Fungible goods" — goods that are commercially interchangeable with essentially identical properties
  • "Indirect materials" — materials used in production, testing, or inspection of a good but not physically incorporated into it, such as fuel, tools, lubricants, and safety equipment
  • "Producer" — any person engaged in production of a good
  • "Production" — encompasses growing, cultivating, mining, harvesting, fishing, aquaculture, manufacturing, processing, assembling, and related activities
  • "Originating good/material" — a good or material that qualifies under these rules
  • "Non-originating material" — any material not qualifying as originating, including materials of undetermined origin
  • "Preferential tariff treatment" — the applicable customs duty rate on originating goods under each Party's Schedule of Tariff Commitments (Annex 2A)

All costs and values under these rules must be recorded and maintained in accordance with Generally Accepted Accounting Principles applicable in the territory of the Party where the good is produced.

Rule 3: Criteria for Originating Status

A good is treated as originating in one of two ways:

  1. It is wholly obtained or produced in the territory of one or both Parties (as governed by Rule 4); or
  2. It satisfies the applicable Product Specific Rules set out in Annexure A, along with all other requirements of the notification.

Rule 4: Wholly Obtained or Produced Goods

Goods that qualify as wholly obtained or produced within the territory of India or New Zealand (or both) include:

  • Plants, flowers, vegetables, fungi, algae, and live plants grown, harvested, or gathered there
  • Live animals born and raised in that territory
  • Goods obtained from such live animals
  • Goods obtained through hunting, trapping, fishing, aquaculture, gathering, or capture
  • Minerals and naturally occurring substances extracted from the soil, seabed, or subsoil
  • Fish, shellfish, and marine life extracted from international waters by vessels registered with and flying the flag of a Party
  • Goods produced aboard a factory ship registered with a Party from such marine resources
  • Goods extracted from the seabed or subsoil outside a Party's territorial sea, where the Party has rights under international law
  • Waste and scrap derived from production or consumption, fit only for raw material recovery
  • Goods produced solely from the above categories or their derivatives at any production stage

Rule 5: Bilateral Cumulation

The rules provide for bilateral cumulation, whereby originating goods or materials from one Party that are used in the production of a good in the other Party's territory are treated as originating in the other Party. This allows producers to leverage inputs sourced from either country without losing preferential origin status.

Rule 6: Calculation of Qualifying Value Content (QVC)

Where a QVC threshold is prescribed under Annexure A, the assessee may calculate it using either of two methods:

Build-Down Formula

Based on the value of non-originating materials:

QVC = [(FOB Value − Value of non-originating materials) / FOB Value] × 100

Build-Up Formula

Based on the value of originating materials:

QVC = (Value of originating materials / FOB Value) × 100

Rule 7: Valuation of Materials for QVC Purposes

The valuation mechanism for materials used in QVC calculations is as follows:

Imported Materials

  • Valued at CIF value

Materials Obtained Within a Party's Territory

  • The price paid or payable by the producer
  • The value determined as for imported materials; or
  • The earliest ascertainable price in that territory

Self-Produced Materials

  • All costs incurred in production, including reasonably allocated general expenses

Additional inclusions for originating materials:

  • Freight, insurance, packing, and transport costs to the producer's location
  • Duties, taxes, and customs brokerage fees (excluding those waived or refundable)
  • Waste and spoilage costs, net of reusable scrap value

Permitted deductions for non-originating or undetermined-origin materials:

  • Freight, insurance, packing, and transport costs within Party territories
  • Duties, taxes, and customs brokerage fees (excluding waived or refundable amounts)
  • Waste and spoilage costs, net of reusable scrap value

Where costs are unknown or unverifiable, no adjustment is permitted.

Rule 8: Minimal Operations — Insufficient Processing

Certain operations performed on non-originating materials do not confer originating status. These include:

  • Preservation for transport or storage purposes
  • Packaging or presentation for transportation or sale
  • Simple processes such as sifting, sorting, cutting, slitting, grinding, bending, coiling, or uncoiling (where "simple" means no special skills, machines, or specially installed equipment are required)
  • For textiles: attaching accessories such as straps, beads, or eyelets; ironing or pressing
  • Affixing or printing marks, labels, logos, or distinguishing signs
  • Simple dilution with water or another substance that does not materially alter characteristics
  • Simple assembly or disassembly of parts
  • Slaughtering of animals (meaning mere killing)
  • Simple painting and polishing
  • Simple peeling, stoning, or shelling
  • Simple mixing of goods (where no special skills or specially installed equipment are required)
  • Any combination of the above operations