PREFERENTIAL TRADE AGREEMENT
THE REPUBLIC OF INDIA
THE TRANSITIONAL ISLAMIC STATE OF AFGHANISTAN
The Government of the Republic of India and The Transitional Islamic State of
Afghanistan, (hereinafter referred to as the "Contracting Parties"),
CONSIDERING that the expansion of their domestic markets, through economic
integration, is a vital prerequisite for accelerating their processes of
BEARING in mind the desire to promote mutually beneficial bilateral trade.
CONVINCED of the need to establish and promote free trade for strengthening
intra-regional economic cooperation and the development of national economies.
FURTHER RECOGNISING that progressive reductions and elimination of obstacles to
bilateral trade through a bilateral preferential trading arrangement
(hereinafter referred to as "The Agreement") would contribute to the expansion
of world trade.
HAVE agreed as follows:
- The Contracting Parties shall establish a Preferential Trading Arrangement in
accordance with the provisions of this Agreement.
- The objectives of this Agreement are:
- To promote through the expansion of trade the harmonious development of the
economic relations between India and Afghanistan.
- To provide fair conditions of competition for trade between India and
- In the implementation of this Agreement the Contracting Parties shall pay due
regard to the principle of reciprocity.
- To contribute in this way, by the removal of barriers to trade, to the
harmonious development and expansion of world trade.
For the purpose of this agreement:
- "Tariffs" means basic customs duties included in the national schedules of the
- "Products" means all products including manufactures and commodities in their
raw, semi-processed and processed forms.
- "Preferential Treatment" means any concession or privilege granted under this
Agreement by a Contracting Party through the progressive reduction and/or
elimination of tariffs on the movement of goods.
- "The Committee" means the Joint committee referred to in Article XI.
- "Serious injury" means significant damage to domestic producers, of like or
similar products resulting from a substantial increase of preferential imports
in situations which cause substantial losses in terms of earnings, production or
employment unsustainable in the short term. The examination of the impact on the
domestic industry concerned shall also include an evaluation of other relevant
economic factors and indices having a bearing on the state of the domestic
industry of that product.
- "Threat of serious injury" means a situation in which a substantial increase of
preferential imports is of a nature so as to cause "Serious injury" to domestic
producers, and that such injury, although not yet existing is clearly imminent.
A determination of threat of serious injury shall be based on facts and not on
mere allegation, conjecture, or remote or hypothetical possibility.
- "Critical circumstances" means the emergence of an exceptional situation where
massive preferential imports are causing or threatening to cause "serious
injury" difficult to repair and which calls for immediate action.
Elimination of Tariffs
The Contracting Parties hereby agree to establish a Preferential Trading
Arrangement for the purpose of free movement of goods between their countries
through reduction of tariffs on the movement of goods in accordance with the
provisions of Annexures A & B which shall form an integral part of this
Nothing in this Agreement shall prevent any Contracting Party from taking action
and adopting measures, which it considers necessary for the protection of its
national security, the protection of public morals, the protection of human,
animal or plant life and health, those relating to importation or exportation of
gold and silver, the conservation of exhaustible natural resources and the
protection of national treasures of artistic, historic and archaeological value.
Both Contracting Parties agree to accord to each others products imported into
their territory, treatment no less favorable than that accorded to like
domestic products in respect of internal taxation and in respect of all other
domestic laws and regulations affecting their sale, purchase, transportation,
distribution or use.
State Trading Enterprisess
- Nothing in this Agreement shall be construed to prevent a Contracting Party from
maintaining or establishing a state trading enterprise.
- Each Contracting Party shall ensure that any state enterprise that it maintains
or establishes acts in a manner that is not inconsistent with the obligations of
the Contracting Parties, under this Agreement and accords non-discriminatory
treatment in the import from and export to the other Contracting Party.
Rules of Origin
- Products covered by the provisions of this Agreement shall be eligible for
preferential treatment provided they satisfy the Rules of Origin as set out in
Annexure C to this Agreement which shall form an integral part of this
- For the development of specific sectors of the industry of either Contracting
Party, lower value addition norms for the products manufactured or produced by
those sectors may be considered through mutual negotiations.
If any product, which is the subject of preferential treatment under this
Agreement, is imported into the territory of a Contracting Party in such a
manner or in such quantities as to cause or threaten to cause, serious injury in
the importing Contracting Party, the importing Contracting Party may, with prior
consultations except in critical circumstances, suspend provisionally without
discrimination the preferential treatment accorded under the Agreement.
2.When action has been taken by either Contracting Party in terms of paragraph 1
of this Article, it shall simultaneously notify the other Contracting Party and
the Joint Committee established in terms of Article XI. The Committee shall
enter into consultations with the concerned Contracting Party and endeavor to
reach mutually acceptable agreement to remedy the situation. Should the
consultations in the Committee fail to resolve the issue within sixty days, the
party affected by such action shall have the right to withdraw the preferential
- The Contracting Parties shall be free to apply their domestic legislation to
restrict imports, in cases where prices are influenced by unfair trade practices
including subsidies or dumping.
- The contracting parties undertake to notify at the earliest opportunity, through
the competent bodies, of the opening of investigations and preliminary and final
conclusions regarding such unfair trade practices that affect reciprocal trade.
Balance of Payment Measures
- Notwithstanding the provisions of this Agreement, any Contracting Party
facing balance of payments difficulties may suspend provisionally the
preferential treatment as to the quantity and value of merchandise permitted to
be imported under the Agreement. When such action has taken place, the
Contracting Party, which initiates such action shall simultaneously notify the
other Contracting Party.
- Any Contracting Party, which takes action according to paragraph 1 of this
Article, shall afford, upon request from the other Contracting Party, adequate
opportunities for consultations with a view to preserving the stability of the
preferential treatment provided under this Agreement.
- A Joint Committee shall be established at Ministerial level. The Committee shall
meet at least once a year to review the progress made in the implementation of
this Agreement and to ensure that benefits of trade expansion emanating from
this Agreement accrue to both Contracting Parties equitably. The Committee may
set up Sub-Committees and/or Working Groups as considered necessary.
- In order to facilitate cooperation in customs matters, the Contracting Parties
agree to establish a Working Group on Customs related issues including
harmonisation of tariff headings. The Working Group shall meet as often as
required and shall report to the Committee on its deliberations.
- The Committee shall accord adequate opportunities for consultation on
representations made by any Contracting Party with respect to any matter
affecting the Implementation of the Agreement. The Committee shall adopt
appropriate measures for settling any matter arising from such representations
within 6 months of the representation being made. Each Contracting Party shall
implement such measures immediately.
- The Committee shall nominate one apex chamber of trade and industry in each
country as the nodal chamber to represent the views of the trade and industry on
matters relating to this Agreement.
- Each Contracting Party shall accord sympathetic consideration to and shall
afford adequate opportunity for, consultations regarding such representations as
may be made by the other Contracting Party with respect to any matter affecting
the operation of this Agreement.
- The Committee may meet at the request of a Contracting Party to consider any
matter for which it has not been possible to find a satisfactory solution
through consultations under paragraph 1 above.
Settlement of Disputes
- Any dispute that may arise between commercial entities of the Contracting
Parties shall be referred for amicable settlement to the nodal apex chambers.
Such references shall, as far as possible, be settled through mutual
consultations by the Chambers. In the event of an amicable solution not being
found, the matter shall be referred to an Arbitral Tribunal for a binding
decision. The Tribunal shall be constituted by the Joint Committee in
consultation with the relevant Arbitration Bodies in the two countries.
- Any dispute between the Contracting Parties regarding the interpretation and
application of the provisions of this Agreement or any instrument adopted within
its framework shall be amicably settled through negotiations failing which a
notification may be made to the Committee by any one of the Contracting Parties.
Duration and Termination of Agreement
This Agreement shall remain in force until either Contracting Party terminates
this Agreement by giving six months written notice to the other of its intention
to terminate the Agreement.
- The Agreement may be modified or amended through mutual agreement of the
Contracting Parties. Proposals for such modifications or amendments shall be
submitted to the Joint Committee and upon acceptance by the Joint Committee,
shall be approved in accordance with the applicable legal procedures of each
Contracting Party. Such modifications or amendments shall become effective when
confirmed through an exchange of diplomatic notes and shall constitute an
integral part of the Agreement.
- Provided however that in emergency situations, proposals for modifications may
be considered by the Contracting parties and if agreed, given effect to through
an exchange of diplomatic notes.
The list of items covered under preferential tariff by the Government of
Afghanistan is at Annexure - A and the list of items covered under preferential
tariff by the Government of India is at Annexure-B which are integral parts of
Entry into Force
- The Agreement shall enter into force on the thirtieth day after the Contracting
Parties hereto have notified each other that their respective constitutional
requirements and procedures have been completed.
- In witness whereof the undersigned, duly authorised thereto by their respective
Governments, have signed this Agreement.
- Signed at New Delhi on the 6th day of March 2003 in two originals each in Hindi,
Dari and English languages, all of them being equally authentic. In case of any
divergence in interpretation, the English Text shall prevail.
||(SAYED MUSTAFA KAZEMI)
|MINISTER OF COMMERCE AND INDUSTRY
||MINISTER OF COMMERCE
|GOVERNMENT OF THE REPUBLIC OF
|TRANSITIONAL ISLAMIC STATE OF
ANNEXURE - A
THE LIST OF ITEMS WHERE PREFERNTIAL TARIFF IS GRANTED BY THE GOVERNMENT OF
|| HS CODE
|| PRODUCT DESCRIPTION
|| MFN DUTY %
|| MOP % *
|| Black Tea (fermented)
|| Other Black Tea
|| Antisera & Other BLD Frctn; Mdfd Imunlgcl products
|| Other Ayurvedic, Homeopathic Medicine
|| Other Medicine for retail sale
|| Sugar refined
|| Cement Clinkers
|| White Cement
(* Margin of Preference)
ANNEXURE - B
THE LIST OF ITEMS WHERE PREFERNTIAL TARIFF IS GRANTED BY THE GOVERNMENT OF INDIA
|| H.S. Code
|| Product Description
||MFN Duty %
|| M O P*
|| Green Raisins
|| Green Large
|| Black Raisins
|| Red Raisins
|| Dried Apricots Nuts
|| Dried Apricots
|| Fig Dried
|| Pistachios closed Shell
|| Pistachios Open Shell
|| Pistachios Shelled (Kernall)
|| Walnuts Unshelled
|| Walnuts shelled
|| Plums Dried
|| Almond Thin Shelled
|| Almond Hard Shelled
|| Almond Shelled
|| Mulberries Dried
|| Pine Nuts Toasted
|| Raisins Golden
|| Apricots Nuts, Bitter Unshelled
|| Apricots Nuts, Bitter Shelled
|| Green Raisins except Large
|| Cherries Sour Dried
|| Grapes fresh, All types
|| Melon fresh
|| Apples fresh
|| Apricots fresh
|| Anise Seeds
|| Caraway Seeds, White, Black Kajak
|| Sesame Seeds etc.
|| Liquorice Roots plants for Pharmacy etc.
|| Alfalfa Seeds
|| Lapis Lazuli, Ruby, Emerald etc.(Unworked)
|| Emeralds (Otherwise worked)
|| Lapis Lazuli, Ruby (Otherwise worked)
(* Margin of Preference)
ANNEXURE - C
RULES OF ORIGIN
1. Short title/commencement:-
These rules may be called the rules of Determination of Origin of Goods under
the PTA between Afghanistan and the Republic of India.
These rules shall apply to products consigned from the territory of either of
the Contracting Parties.
3. Determination of Origin :-
No product shall be deemed to be the produce or manufacture of either country
unless the conditions specified in these rules are complied with in relation to
such products, to the satisfaction of the appropriate Authority.
4. Declaration at the time of importation:-
The importer of the product shall, at the time of importation:
- make a declaration that the products are the produce or manufacture of the
country from which they are imported and such products are eligible for
preferential treatment under the Agreement, and
- produce the evidence specified in these rules.
5. Originating products:-
Products covered by the Agreement imported into the territory of a Contracting
Party from another Contracting Party which are consigned directly within the
meaning of rule 9 hereof, shall be eligible for preferential treatment if they
conform to the origin requirement under any one of the following conditions:
- Products wholly produced or obtained in the territory of the exporting
Contracting Party as defined in rule 6; or
- Products not wholly produced or obtained in the territory of the exporting
Contracting Party, provided that the said products are eligible under rule 7 or
rule 8 read with rule 7.
6. Wholly produced or obtained:-
Within the meaning of rule 5(a), the following shall be considered as wholly
produced or obtained in the territory of the exporting Contracting Party:
- raw or mineral products extracted from its soil, its water or its seabed;
- vegetable products harvested there;
- animals born and raised there;
- products obtained from animals referred to in clause (c) above;
- products obtained by hunting or fishing conducted there;
- products of sea fishing and other marine products from the high seas by its
- products processed and/or made on board its factory ships exclusively from
products referred to in clause (f) above;
- used articles collected there, fit only for the recovery of raw materials;
- waste and scrap resulting from manufacturing operations conducted there;
- products extracted from the seabed or below seabed which is situated outside its
territorial waters, provided that it has exclusive exploitation rights;
- goods produced there exclusively from the products referred to in clauses (a) to
7. Not wholly produced or obtained:-
- Within the meaning of rule 5(b), products worked on or processed as a result of
which the total value of the materials, parts or produce originating from
countries other than the Contracting Parties or of undetermined origin used does
not exceed 50% of the f.o.b. value of the products produced or obtained and the
final process of manufacture is performed within the territory of the exporting
Contracting Party shall be eligible for preferential treatment, subject to the
provisions of clauses (b), (c), (d) and (e) of rule 7 and rule 8.
- Non-originating materials shall be considered to be sufficiently worked or
processed when the product obtained is classified in a heading, at the four
digit level, of the Harmonised Commodity Description and Coding System different
from those in which all the non-originating materials used in its manufacture
- In order to determine whether a product originates in the territory of a
Contracting Party, it shall not be necessary to establish whether the power and
fuel, plant and equipment, and machines and tools used to obtain such products
originate in third countries or not.
- The following shall in any event be considered as insufficient working or
processing to confer the status of originating products, whether or not there is
a change of heading:
- Operations to ensure the preservation of products in good condition during
transport and storage (ventilation, spreading out, drying, chilling, placing in
salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and
- Simple operations consisting of removal of dust, sifting or screening, sorting,
classifying, matching (including the making-up of sets of articles), washing,
painting, cutting up;
- (i) changes of packing and breaking up and assembly of consignments,
(ii) simple slicing, cutting and repacking or placing in bottles, flasks, bags,
boxes, fixing on cards or boards, etc., and all other simple packing operations.
- the affixing of marks, labels or other like distinguishing signs on products or
- simple mixing of products, whether or not of different kinds, where one or more
components of the mixture do not meet the conditions laid down in these Rules to
enable them to be considered as originating products;
- simple assembly of parts of products to constitute a complete product;
- a combination of two or more operations specified in (a) to (f);
- slaughter of animals.
- The value of the non-originating materials, parts or produce shall be:
- The c.i.f. value at the time of importation of the materials, parts or produce
where this can be proven; or
- The earliest ascertainable price paid for the materials, parts or produce of
undetermined origin in the territory of the Contracting Parties where the
working or processing takes place.
8. Cumulative rules of origin:-
In respect of a product, which complies with the origin requirements provided in
rule 5(b) and is exported by any Contracting Party and which has used material,
parts or products originating in the territory of the other Contracting Party,
the value addition in the territory of the exporting Contracting Party shall be
not less than 30 per cent of the f.o.b. value of the product under export
subject to the condition that the aggregate value addition in the territories of
the Contracting Parties is not less than 40 per cent of the f.o.b. value of the
product under export.
9. Direct consignment:-
The following shall be considered to be directly consigned from the exporting
country to the importing country:
- if the products are transported without passing through the territory of any
country other than the countries of the Contracting Parties.
- The products whose transport involves transit through one or more intermediate
countries with or without transhipment or temporary storage in such countries;
- the transit entry is justified for geographical reason or by considerations
related exclusively to transport requirements;
- the products have not entered into trade or consumption there; and
- the products have not undergone any operation there other than unloading and
reloading or any operation required to keep them in good condition.
10. Treatment of packing :-
When determining the origin of products, packing should be considered as forming
a whole with the product it contains. However, packing may be treated separately
if the national legislation so requires.
11. Certificate of origin:-
Products eligible for a Certificate of origin in the form annexed shall support
preferential treatment issued by an authority designated by the Government of
the exporting country and notified to the other country in accordance with the
certification procedures to be devised and approved by both the Contracting
Either country may prohibit importation of products containing any inputs
originating from States with which it does not have economic and commercial
13. Co-operation between contracting parties:-
- The Contracting Parties will do their best to co-operate in order to specify
origin of inputs in the Certificate of origin.
- The Contracting Parties will take measures necessary to address, to investigate
and, where appropriate, to take legal and/or administrative action to prevent
circumvention of this Agreement through false declaration concerning country of
origin or falsification of original documents.
- Both the Contracting Parties will co-operate fully, consistent with their
domestic laws and procedures, in instances of circumvention or alleged
circumvention of the Agreement to address problems arising from circumvention
including facilitation of joint plant visits and contacts by representatives of
both Contracting Parties upon request and on a case – by – case basis.
- If either Party believes that the rules of origin are being circumvented, it may
request consultation to address the matter or matters concerned with a view to
seeking a mutually satisfactory solution. Each party will hold such
These rules may be reviewed as and when necessary upon request of either
Contracting Party and may be open to such modifications as may be agreed upon.
- Includes mineral fuels, lubricants and related materials as well as mineral or
- Includes agricultural and forestry products
- "Vessels" shall refer to fishing vessels engaged in commercial fishing,
registered in the country of the Contracting Party and operated by a citizen or
citizens of the Contracting Party or partnership, corporation or association,
duly registered in such country, at least 60 per cent of equity of which is
owned by a citizen or citizens and/or Government of such Contracting Party or 75
per cent by citizens and/or Governments of the Contracting Parties. However, the
products taken from vessels, engaged in commercial fishing under Bilateral
Agreements which provide for chartering/leasing of such vessels and/or sharing
of catch between Contracting Party will also be eligible or preferential
- In respect of vessels or factory ships operated by Government agencies, the
requirements of flying the flag of the Contracting Party does not apply.
- For the purpose of this Agreement, the term "factory ship" means any vessel, as
defined, used for processing and/or making on board products exclusively from
those products referred to in clause (f) of Rule 6.
- Cumulation as implied by Rule 8 means that only products which have acquired
originating status in the territory of one Contracting Party may be taken into
account when used as inputs for a finished product eligible for preferential
treatment in the territory of the other Contracting Party.
CERTIFICATE OF ORIGIN
|1. Goods consigned from (Exporters’
Business Name, Address, Country)
|INDIA - AFGHANISTAN PREFERENTIAL TRADING ARRANGEMENT (IAPTA)
|(Combined declaration and certificate)
|(See notes overleaf)
|2. Goods consigned to
(Consignee’s Name, Address, Country)
|4. For Official use
|3. Means of transport and route
(as far as known)
|5. Tariff item number
||6. Marks and numbers of packages
||7. Number and kind of packages: description of goods
||8.Origin criterion (see Notes overleaf)
||9. Gross weight or other quantity
||10. Number and date of invoice
|11. Declaration by the Exporter
|The undersigned hereby declares that the above details and statements are
correct; That all the goods were produced in
||It is hereby certified, on the basis of control carried out that the declaration
by the exporter is correct.
|and that they comply with the origin requirements specified for those goods in
IAPTA for goods exported to
|Place and date, signature of the authorised signatory
||Place and date, signature and stamp of certifying authority.
To qualify for preference, products must:
- fall within a description of products eligible for concessions in the country of
destination under this agreement.
- comply with IAPTA Rules of Origin. Each Article in a consignment must qualify
separately in its own right; and
- comply with the consignment conditions specified by the IAPTA Rules of Origin.
In general products must be consigned directly within the meaning of Rule 9
hereof from the country of exportation to the country of destination.
II. Entries to be made in Box 8
- Preference products must be wholly produced or obtained in the exporting
Contracting Party in accordance with Rule 6 of the IAPTA Rule of Origin, or
where not wholly produced or obtained in the exporting Contracting Party must be
eligible under Rule 7 or Rule 8.
- Products wholly produced or obtained enter the letter ‘A’ in box 8.
- Products not wholly produced or obtained; the entry in box 8 should be as
- Enter letter ‘B’ in box 8 for products, which meet the origin criterion
according to Rule 7. Entry of letter would be followed by the sum of the value
of materials, parts or produce originating from non-contracting parties or
undetermined origin used, expressed as a percentage of the f.o.b. value of the
(example B( ) percent).
- Enter letter ‘C’ in box 8 for products, which meet the origin criteria according
to Rule 8. Entry of letter ‘C’ would be followed by the sum of the aggregate
content originating in the territory of the exporting Contracting Party
expressed as a percentage of the f.o.b. value of the exported product: (example
‘C’ ( ) per cent).