Indian Pharma Exporter Claims India-UAE CEPA Preference for First Time — 0% Duty on USD 2.1M Shipment

Curated by Vinod Kumar Jain & Amit Jain · All Frontier Global · free, no login

India-UAE

Challenge

An Indian pharmaceutical company had been exporting tablet formulations to UAE at 5% UAE import duty since 2020. India-UAE CEPA entered force in May 2022 providing 0% duty on pharma HS codes (Chapter 30) from Day 1. However, the company continued paying 5% duty for 18 months post-CEPA as their UAE importer was unaware of the CEPA preference and the Indian exporter had not obtained a CEPA-compliant Certificate of Origin.

Solution

AJG audit identified 18 months of unclaimed CEPA preference on USD 2.1M shipments — total unclaimed duty saving of approximately USD 105,000 (5% of USD 2.1M). For future shipments: DGFT-authorised Certificate of Origin (specific to India-UAE CEPA) was obtained through PHARMEXCIL. Rules of origin compliance was verified: the tablet formulations (HS 3004) were manufactured entirely in India using Indian API with 40%+ India value addition. UAE importer was briefed on presenting the CEPA COO at UAE customs to claim 0% duty.

Outcome

First CEPA-preference shipment with COO: 0% duty applied by UAE customs. Annual duty saving for the exporter and UAE importer (shared benefit): USD 73,000 on USD 1.46M annual pharma exports. The UAE importer reduced the shelf price of two Indian generic products by 4%, improving market penetration. Historical unclaimed duty: not retroactively recoverable under UAE customs rules — a direct cost of 18 months of non-utilisation.

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