India–UAE CEPA glossary — BCD, SWS, IGST, MFN, RVC, CoO explained

The duty components

Four things make up what you actually pay on an Indian import: BCD, SWS and IGST, all calculated off the assessable (CIF) value. CEPA reduces only the first one.

Assessable value / CIF

Cost, Insurance and Freight — the landed value customs assesses duty on, not the invoice value alone. Every rate below is applied to this figure.

BCD — Basic Customs Duty

The primary tariff, charged as a percentage of the assessable value. This is the only component CEPA changes. Rates in India commonly run 0–20%, but reach 70% on two-wheelers and 100% on coffee and tea.

SWS — Social Welfare Surcharge

A surcharge of 10% of the BCD — not of the goods value. So a ₹1,00,000 BCD carries ₹10,000 SWS. Because it is calculated on BCD, cutting BCD to zero removes the surcharge as well, which is why a CEPA saving is slightly larger than the BCD difference alone.

IGST — Integrated Goods and Services Tax

GST on the import, charged on the CIF + BCD + SWS total. Usually 5, 12, 18 or 28%. A GST-registered importer claims it as input tax credit, so it is a cash-flow cost rather than a permanent one.

AIDC — Agriculture Infrastructure and Development Cess

An additional cess on certain lines, notably gold and some agricultural goods. It sits outside the CEPA concession. Our calculators do not yet model AIDC, so treat those specific lines as indicative.

Rate types

MFN — Most-Favoured-Nation rate

The standard duty India charges any WTO member. It is the rate you pay by default, and the benchmark a preferential rate is measured against.

Preferential / CEPA rate

The reduced BCD available under the India–UAE CEPA. It is conditional, not automatic: the goods must originate in the UAE under the Rules of Origin and arrive with a valid Certificate of Origin.

TRQ — Tariff-Rate Quota

A limited volume that gets a lower rate, with the normal rate applying beyond it. CEPA gold is the significant example — quota imports route through the India International Bullion Exchange at GIFT City.

Rules of Origin terms

A product earns the CEPA rate by passing its Product-Specific Rule, which normally demands both a change in tariff classification and a minimum share of value added in the UAE.

RVC — Regional Value Content

The share of a product's value added within the UAE, as a percentage of FOB value. CEPA thresholds vary by product: about 3% on silver grain, 6% on rough diamonds, 40% on most goods, 45% on aluminium and auto parts.

PSR — Product-Specific Rule

The per-product origin test in CEPA Annex 3B, written like "CTSH + VA 40%". The two halves are cumulative, not alternatives — meeting the value threshold alone does not qualify the goods.

CC, CTH, CTSH, WO

The required classification change: CC change of chapter (2-digit), CTH change of heading (4-digit), CTSH change of sub-heading (6-digit), WO wholly obtained — grown or produced entirely in the UAE, with no value test.

CoO / eCoO 2.0 — Certificate of Origin

The document proving origin, filed electronically through India's eCoO 2.0 system. Without a valid preferential CoO, customs charges MFN even where the goods would have qualified. This is the single most common reason a claim fails.

Cumulation

Treating Indian-origin inputs as UAE-originating (and vice versa) when testing origin. CEPA allows bilateral cumulation between the two countries.

Import-policy terms

ITC(HS)

India's import/export classification schedule. It marks each 8-digit line Free, Restricted or Prohibited — a separate question from what duty applies. A duty-free line can still be legally restricted.

QCO / CRO — Quality Control Order / Compulsory Registration Order

Regimes making BIS certification mandatory before goods may be imported. They cover steel, aluminium, footwear, toys and most electricals. A CEPA preference does not waive them, and they often gate clearance more tightly than duty does.

MIP — Minimum Import Price

A floor price below which a consignment may not be imported, used on lines such as pepper. It applies irrespective of the duty rate claimed.

IEC — Importer-Exporter Code

The DGFT-issued code every Indian importer or exporter needs before filing any consignment. It is a prerequisite, not a duty matter.