The full form of AIFTA is ASEAN-India Free Trade Area. It is one of the most significant free trade agreements between India and the ASEAN nations. Economically and in terms of trust, AIFTA is considered to enhance trade liberalisation, lower tariffs, and initiate novice business opportunities between two economies. The Agreement also offers duty-free access to high-value Southeast Asia for Indian exports and boosts export diversification and industrial competitiveness.
What is the ASEAN-India Free Trade Area (AIFTA)?
The target of the ASEAN-India Free Trade Area was determined through two different phases of negotiation i.e., January 2010 – For Products and August 2011 – For Services/Investments. The primary targets are:
- Remove or reduce customs duty on the goods of origin traded between India and ASEAN.
- Facilitate trade in services and investment flows.
- Promote economic cooperation through building capacity and technical cooperation.
The ten ASEAN member states under AIFTA are:
- Brunei Darussalam
- Cambodia
- Indonesia
- Laos (Lao PDR)
- Malaysia
- Myanmar
- Philippines
- Singapore
- Thailand
- Vietnam
Key Advantages of AIFTA for Indian Exporters
Zero Duty Access
Indian exports of most goods-everything from apparels to engineering goods-are eligible for zero customs duty upon entry into ASEAN nations, lowering costs and improving price competitiveness.
Increased Market Penetration
With more than 650 million consumers within ASEAN, Indian industry gains new markets, augmenting sales and lowered dependence on conventional markets.
Improved Competitiveness
Preferential tariff treatment under AIFTA assists Indian merchandise to compete better with the non-members’ nation merchandise, thus gaining market share.
Streamlined Customs
Simplified customs processes and utilisation of Certificates of Origin (COO) reduce documentation, clearance time, and logistics bottlenecks.
IPR Protection
AIFTA provisions facilitate stricter intellectual property rights enforcement-critically important for exports of pharmaceuticals, software, and processed high-value products.
“To gain a comprehensive understanding of how Free Trade Agreements function and their implications on global trade dynamics, you can refer to our detailed guide on Understanding Free Trade Agreements (FTA) and Their Global Impact.”
What is the AIFTA Certificate of Origin (COO)?
An AIFTA Certificate of Origin is a signed certificate used to confirm that Indian goods exported to ASEAN came from India and therefore are eligible for preferential tariff treatment. Its salient points include:
- Purpose: To confirm the country of origin of merchandise exported and benefit from lower or zero duties under AIFTA.
- When Required: Presented at the importation port at the time of customs clearance to benefit from preferential rates.
- Preferential vs. Non-Preferential COO
- Preferential COO (AIFTA COO) renders concession of duty eligible under the trade agreement.
- Non-Preferential COO merely certifies origin but does not make exporter eligible for preferential rates of tariff.
[Know more about CoO Certificate of Origin]
What is Form AI in AIFTA?
Under the ASEAN-India Free Trade Area (AIFTA), Form AI is the official Certificate of Origin (COO) format used to certify that goods traded between India and ASEAN nations meet the Rules of Origin criteria and are thus eligible for preferential tariff treatment.
Form AI is essential to claim the reduced or zero-duty benefits under the agreement and must be presented at the time of customs clearance.
Key Features of Form AI:
- Purpose: Certifies Indian or ASEAN origin of goods.
- Issued by: DGFT or approved agencies like Export Inspection Agencies.
- Format & Validity: Must follow the AIFTA-prescribed template and is usually valid for 12 months.
- Required for: Availing tariff concessions under the AIFTA.
Why Form AI Matters:
- It ensures compliance with preferential origin rules.
- It is mandatory for availing duty-free or reduced duty benefits under AIFTA.
- Without it, importers cannot claim tariff preference.
Tip for Exporters: Double-check that Form AI is correctly filled, signed, and supported by all relevant documentation before shipping. Even minor errors can lead to clearance delays or duty rejection at the importing port.
Who issues AIFTA Certificate in India?
- Directorate General of Foreign Trade (DGFT): Principal issuing authority through its regional offices and web platform.
- Approved Agencies: For instance, the Export Inspection Agency (EIA).
Eligibility Requirements for AIFTA Certificate
An exporter shall be eligible for an AIFTA COO with the following requirements:
- Product Origin Requirements: Product must meet the test of “wholly obtained” or “substantial transformation” under the Rules of Origin of AIFTA.
- Valid IEC: The Importer-Exporter Code (IEC) of the exporter must be valid on the DGFT portal.
- Origin Rules Compliance: Satisfactory documents and processing records to demonstrate compliance with AIFTA origin rules.
AIFTA Certificate Application Process
Here are the steps to get your AIFTA COO:
- Register/Login: Portal For application of AIFTA is trade.gov.in (trade connect Platform) introduced by DGFT. IEC is mandatory to be active for any online FTA applications.
- Fill Application: Submit online COO application form, product details, HS codes, origin specifications.
- Upload Documents: Upload required documents (refer below section) in PDF Format.
- Verification: DGFT checks the details and seeks clarifications, if any.
- Issuance: On approval, AIFTA COO is electronically generated -usually in 2-3 working days.
Documents Needed for AIFTA Certificate
To make application easier, keep the following ready:
- IEC Certificate (PDF)
- DGFT login ID and password
- Class 3 DSC – organization based or now with Aadhar OTP is also available for E-signing
- Invoice & Packing List.
- Manufacturer’s Declaration of Origin
- Product Details & HS Code declarations
- Proof of Origin (bills of material, processing statements, etc.)
- Bill of Lading / Airway Bill and Shipping Bill
- Raw Material Invoices to check whether wholly obtained in India or not
| Particulars | Fee (INR) |
|---|---|
| Government Fee | 736 |
| One-time Registration Fee | 500 |
| Application Processing Fee | 2,000 |
| Total | 3,236 |
Note: Fees are subject to revision under notifications issued by DGFT.
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Mistakes to Avoid while Applying for AIFTA
- Incorrect HS Codes: Delay or rejection can occur due to misclassification.
- Dated or Invalid Documents: Renew IEC and DSC at all times.
- Missing Declarations: The manufacturer must declare origin.
- Non-Compliance with DGFT Guidelines: Adhere to latest DGFT Handbook and Public Notices.
Most Advantageous Sectors of AIFTA
- Textiles & Apparel: Concession in duty increases competitiveness of garment-starved ASEAN economies.
- Pharmaceuticals: Reduced tariff on bulk drugs and formulations benefit frugal consumers.
- Agriculture & Food: Spices, tea, and processed food benefit from cost advantage.
- Electronics: Components and finished goods enjoy easier market access.
- Engineering Goods: Auto components, machinery, and capital goods enjoy lower input costs.
Real-World Example
Case Study: There was a 45% increase in M/S Ginza Industries exports of cotton apparel to Vietnam in one year from the implementation initiation of AIFTA and saved more than INR 50 lakhs of duty. Facilitated clearance of customs and preferential tariff enabled Ginza Industries to create new distribution networks at Ho Chi Minh City and Hanoi through end-to-end facilitation by Afleo.