Do Revisions to the Harmonized System Lead to Distortions in Rules of Origin? A Case Study of India’s Selected Free Trade Agreements

Abstract

Revision in Harmonized System (HS) and its impact of rules of origin (RoO) are matters of immense importance in international trade policy discourse due to its far reaching economic and trade implications. In this article, we analyse the impact of HS amendments on RoO, based on the change in tariff classification (CTC) by examining India’s trade agreements with South Korea and Japan. Findings of the article show that the revision in HS impacts 42% of subheadings with CTC rules in case of India- South Korea Comprehensive Economic Partnership Agreement (CEPA) and 28% in case of India- Japan CEPA, thereby potentially affecting up to 48% and 16% share of their total trade, respectively. Harmonized System, Rules of Origin, Trade Policy, Free Trade Agreements, WCO