India's Electronics Imports from Vietnam Rise 9.5% in FY26 Amid Review of ASEAN Rules of Origin

October 27, 2026

India's electronic goods imports from Vietnam reached approximately USD 5.36 billion in FY26, according to IBEF's India–Vietnam trade profile. Published reporting places the FY25 figure at around USD 4.9 billion and describes the annual increase as approximately 9.5%. The increase reflects import value rather than physical shipment volume. It comes as India and ASEAN continue negotiations to review the ASEAN–India Trade in Goods Agreement (AITIGA), including its rules-of-origin provisions.

At the 15th Joint Committee meeting in Jakarta from October 6 to 9, 2026, rules of origin remained among the issues under discussion. The rise in imports does not, by itself, establish misuse of preferential tariffs or transshipment. Importers should instead ensure that goods claimed under AITIGA meet the applicable origin criteria and are supported by adequate documentation.

What Do the Reported Vietnam Import Figures Show?

Published reports indicate that India's electronics imports from Vietnam increased from approximately USD 3.88 billion in FY23 to USD 4.50 billion in FY24, USD 4.90 billion in FY25 and USD 5.36 billion in FY26. The reported 9.5% year-on-year increase in FY26 refers to import value rather than shipment volume. The figures should be attributed to their original statistical source, with the relevant product classifications verified before publication.

Reported product categories include displays, camera modules and finished electronic devices such as smartphones. However, these examples should not be treated as a verified product-wise breakdown of total imports.

Cost competitiveness, supplier availability and preferential tariff treatment may influence sourcing decisions. However, preferential customs duty is available only when the product meets the applicable rules of origin, documentation requirements and tariff conditions under the ASEAN–India trade agreement.

Why Are India–Vietnam Sourcing Activities Facing Scrutiny?

The reported increase in the value of electronics imports from Vietnam has brought greater attention to preferential tariff eligibility under the ASEAN–India Trade in Goods Agreement (AITIGA).

Industry commentary has raised concerns about whether some goods shipped through Vietnam may originate in third countries, including China. However, rising import values do not establish transshipment, origin misdeclaration or misuse of preferential tariff benefits.

Rules of origin remain an important subject in the ongoing AITIGA review. Discussions include potential changes to origin requirements, although any proposed amendments must be distinguished from provisions currently in force.

For Indian manufacturers, the practical priority is verifying suppliers, understanding where substantial manufacturing takes place and ensuring that preferential tariff claims are supported by appropriate origin documentation.

What Are the Rules of Origin Under AIFTA?

The agreement is formally the ASEAN–India Trade in Goods Agreement (AITIGA), and Indian customs rules refer to it as AIFTA. Under the origin rules notified in India in 2009, a product that is not wholly obtained qualifies only if two conditions are met. First, ASEAN-India content must be at least 35% of the FOB value. Second, the non-originating materials must have undergone at least a change in tariff sub-heading, meaning a change at the six-digit Harmonized System level.

The final manufacturing process must also take place in the exporting country. Some coverage describes only the 35% threshold, which is incomplete. Specific products may also be subject to product-specific rules. Importers should read the current rules and the tariff schedule for their exact classification, as this summary is not a substitute for them.

What Is the Difference Between Shipped from Vietnam and Originating in Vietnam?

The country of shipment is where goods were loaded for export. The country of origin is where they were wholly obtained or sufficiently transformed under the rules. A product can be shipped from Vietnam but originate elsewhere, for example if it was only repacked, relabelled or lightly assembled from imported parts. Assembly in Vietnam therefore does not automatically qualify a product for preferential tariffs. Manufacturing or assembly in Vietnam does not automatically establish preferential origin. Eligibility depends on satisfying the applicable AIFTA origin criteria, including qualifying transformation requirements and any relevant exceptions.

How Can Importers Establish Preferential Tariff Eligibility Under CAROTAR 2020?

The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR) require Indian importers claiming preferential tariff treatment to exercise reasonable care in establishing that imported goods satisfy the applicable origin criteria. Importers must make the prescribed declarations and maintain sufficient origin-related information. CAROTAR also requires relevant supporting information and documents to be retained for at least five years from the date of filing the Bill of Entry.

Depending on the product and origin claim, relevant records may include the prescribed certificate of origin, commercial invoice, transport documents, manufacturing-process information, input-material details, tariff classifications and value-addition calculations. Where customs authorities request additional information, importers must respond within the applicable procedural timelines. The scope of the request and subsequent verification process are governed by CAROTAR and the relevant trade agreement. A certificate of origin does not automatically guarantee preferential duty. Customs authorities may examine whether the goods satisfy the applicable origin requirements.

How Can Origin Verification Affect Duties and Landed Costs?

If a preferential-duty claim is denied, the applicable non-preferential customs duty may become payable, subject to the tariff classification and other applicable customs provisions. The resulting cost difference depends on the product's HS classification, the prevailing tariff rate and any other applicable duties or exemptions. Verification or clearance delays may also increase storage, demurrage and working-capital costs.

Not every product imported from Vietnam qualifies for zero customs duty. The applicable preferential rate depends on the product's tariff classification, India's relevant tariff commitments and compliance with the agreement's origin conditions.

Importers should calculate landed costs using the applicable tariff for each product and assess the financial exposure if preferential treatment is unavailable. Contracts should clearly allocate responsibility for origin documentation, duty reassessments and related costs.

What Risks Arise from Third-Country Sourcing, and How Can Manufacturers Verify Suppliers?

Sourcing through overseas traders or contract manufacturers can limit visibility into production processes and the origin of materials. This creates risks when importers cannot substantiate preferential tariff claims during customs verification. Manufacturers should assess supplier ownership, production facilities, manufacturing capabilities and material sourcing before finalising procurement contracts.

Verification should include relevant bills of materials, manufacturing records, product classifications, origin documentation and traceability of critical components. Contracts should establish documentation responsibilities, information-sharing obligations and appropriate audit rights. Supplier verification is most effective before procurement commitments are made, rather than after a customs query arises.

What Is the Current Status of the ASEAN–India Trade Agreement Review?

India and ASEAN are reviewing the ASEAN–India Trade in Goods Agreement, including provisions relevant to market access and rules of origin. Any proposed changes to origin criteria, verification procedures or preferential tariff arrangements must be distinguished from requirements already in force.

Indian importers should continue applying the existing legal provisions and relevant customs notifications unless revised rules are formally adopted and brought into effect. Manufacturers sourcing electronics, machinery and industrial components from ASEAN countries should monitor the review and assess how potential changes could affect procurement costs and supplier selection.

A rising import number is not a compliance finding. For Indian importers, the practical point is that preferential duty depends on proof of origin, so the evidence should be in place before the shipment arrives.

IMARC Engineering’s Perspective

For Indian manufacturers, sourcing decisions should consider more than the quoted purchase price. Supplier capabilities, origin eligibility, customs requirements and total landed costs can materially influence procurement economics.

Three priorities deserve attention: verifying overseas suppliers and their manufacturing capabilities, diversifying sourcing to reduce supply-chain exposure, and evaluating domestic manufacturing opportunities where import dependence creates recurring cost or availability risks.

IMARC Engineering supports businesses through supplier identification, strategic sourcing, location assessment and manufacturing localisation studies. These services help manufacturers evaluate procurement alternatives and investment decisions using technical, commercial and operational considerations. Preferential origin determinations and customs compliance should be reviewed with qualified trade advisers and the relevant customs authorities.