In order to receive PSFTA benefits, the merchandise exported between Pakistan and Sri Lanka should comply with the following Rules of Origin criteria.
Wholly Obtained Products
All wholly obtained products such as tea, fish, spices etc. will be able to enjoy duty free benefits at each other's markets without difficulty, provided they are eligible for duty concessions.
Products not Wholly Produced or Obtained
These include the products manufactured using imported raw materials. In order to enjoy PSFTA benefits, the products should comply with the following criteria.
. The Domestic Value Addition (DVA) in the exporting country should not be less than 35% of the FOB value of the finished product and
. HS Codes of the imported raw materials and the finished products should be different at 6-digit level. (Change of Tariff Heading criteria)
Cumulative Rules of Origin
The Cumulative Rules of Origin encourage the contracting states ( India and Sri Lanka ) to source raw materials needed for their exports form each other. Accordingly, an exporter has to show only a minimum DVA of 25% of the FOB value of the finished product, provided the raw materials imported from the other contracting state accounts for not less that 10% of the FOB value of the particular product. (In other words, the aggregate value addition should not be less than 35% of the FOB value of the finished product, while the DVA in the exporting country should be minimum 25% of the FOB value)
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