India-UAE CEPA and Herbal Ingredients: What Buyers and Suppliers Need to Know

The India-UAE Comprehensive Economic Partnership Agreement (CEPA), which entered into force on 1 May 2022, is the most significant bilateral trade framework affecting Indian herbal ingredient and Ayurvedic product exports to the Gulf in decades. For procurement teams, product developers, and sourcing managers operating in the UAE and broader GCC markets, understanding what CEPA changes — and what it does not change — is now a core sourcing competency.

This article covers the CEPA framework as it applies to herbal ingredients, botanical extracts, essential oils, and Ayurvedic products: tariff schedules, rules of origin requirements, documentation obligations, and the practical sourcing implications for international buyers.

What CEPA Is and Why It Matters for Herbal Sourcing

A Comprehensive Economic Partnership Agreement is a bilateral trade treaty that goes beyond simple tariff reduction. India-UAE CEPA covers goods, services, investment, and intellectual property. For physical goods — including herbal ingredients and Ayurvedic products — the most immediately relevant provisions are:

Preferential tariff rates on qualifying Indian-origin goods entering the UAE
Rules of origin criteria that goods must meet to qualify for preferential treatment
Simplified customs procedures and documentation frameworks
Provisions supporting conformity assessment and regulatory cooperation

Prior to CEPA, Indian herbal exports to the UAE faced standard Most Favoured Nation (MFN) tariff rates. Under CEPA, a significant range of herbal and botanical product categories receive preferential — in many cases zero — duty treatment, reducing landed cost for UAE buyers sourcing from India.

The agreement is structured around a phased tariff reduction schedule. Some categories achieved zero duty immediately on entry into force. Others follow a staged reduction over 5, 7, or 10 years. A small number of sensitive categories are excluded from preferential treatment entirely.

Relevant HS Codes and Tariff Treatment

Herbal ingredients, botanical extracts, and Ayurvedic products fall across several chapters of the Harmonised System (HS) nomenclature. The most relevant for buyers and suppliers in this category include:

Chapter 12 — Oil seeds, miscellaneous grains, seeds and fruits: Covers many botanicals in raw form — fenugreek seed, psyllium husk, fennel, coriander, and similar. Many Chapter 12 products receive favourable CEPA treatment.

Chapter 13 — Lac, gums, resins, and other vegetable saps and extracts: This is the critical chapter for standardised herbal extracts — ashwagandha extract, boswellia extract, turmeric extract, amla extract, and the broader range of botanical extracts used in nutraceutical, cosmetic, and functional food applications. Chapter 13 products have been significant beneficiaries of CEPA preferential rates.

Chapter 09 — Coffee, tea, maté and spices: Covers herbal teas, spice-based botanical ingredients, and related categories. Relevant for buyers sourcing functional tea ingredients or spice-based Ayurvedic blends.

Chapter 33 — Essential oils and resinoids: Covers essential oils, hydrosols, and aromatic extracts — a significant Indian export category including sandalwood, vetiver, rose, jasmine, and steam-distilled medicinal plant oils.

Chapter 21 — Miscellaneous edible preparations: Relevant for certain Ayurvedic food preparations, herbal concentrates, and functional ingredient blends classified as food preparations.

Chapter 30 — Pharmaceutical products: Classical Ayurvedic formulations classified as medicines may fall under Chapter 30, with different tariff treatment than food supplement categories.

Important: HS code classification determines tariff treatment. The same physical product — turmeric extract, for example — may be classified differently depending on concentration, intended use, and the form in which it is presented. Buyers and their customs brokers should confirm the applicable HS code before assuming CEPA preferential rates apply.

Rules of Origin: The Qualification Requirement

Preferential tariff treatment under CEPA is not automatic. Goods must qualify as Indian-origin under the agreement’s rules of origin (RoO) criteria. This is where many buyers and suppliers encounter complexity.

CEPA’s rules of origin for goods generally require one of the following:

Wholly obtained criterion: The product is entirely produced in India from Indian inputs. For primary agricultural botanicals — raw herbs, seeds, plant materials — this criterion is straightforward to meet.

Substantial transformation criterion: For processed goods — extracts, standardised powders, formulations — the product must undergo sufficient processing in India to be considered Indian-origin. CEPA uses a combination of value-added thresholds and change-in-tariff-classification rules to define substantial transformation.

For most Indian herbal extracts and Ayurvedic formulations manufactured in India from Indian botanical raw materials, the rules of origin requirements are met without difficulty. The complexity arises in specific scenarios:

Re-exported goods: If an ingredient was imported into India from a third country and then re-exported to the UAE with minimal processing, it will not qualify as Indian-origin under CEPA.
Blended products with significant imported inputs: If a formulation contains substantial quantities of imported raw materials, the value-added calculation may fail to meet the threshold.
Toll-processed goods: Where a buyer supplies raw materials to an Indian manufacturer for processing, the rules of origin assessment depends on the specifics of the arrangement.

For the majority of standard Indian botanical and Ayurvedic ingredient exports — ashwagandha, tulsi, triphala, neem, boswellia, amla, and similar — grown and processed in India, rules of origin compliance is not a practical barrier.

Certificate of Origin: The Key Document

To claim CEPA preferential tariff treatment at UAE customs, the exporter must provide a valid Certificate of Origin (CoO) issued under the CEPA framework.

In India, Certificates of Origin for CEPA are issued by:

Export Inspection Council (EIC) of India
Authorised agencies under the Ministry of Commerce, including various Export Promotion Councils and Chambers of Commerce authorised for this purpose

The Certificate of Origin must:

Identify the goods by HS code and description
Confirm the country of origin as India
Reference the India-UAE CEPA specifically
Be issued by an authorised Indian body
Accompany the shipment or be available to UAE customs at the time of import

Buyers should confirm with their Indian suppliers that CEPA Certificates of Origin are being correctly obtained and presented. A supplier unfamiliar with CEPA documentation may default to standard MFN import procedures, causing the buyer to pay higher duties unnecessarily.

Practical Sourcing Implications for UAE Buyers

For procurement teams and product developers sourcing Indian herbal ingredients for UAE operations, CEPA creates several concrete advantages:

Reduced landed cost: Where CEPA preferential rates apply, the reduction in import duty directly improves sourcing economics. For high-value botanical extracts, duty savings on a regular import programme can be material.

Competitive positioning: UAE-based manufacturers and brands using Indian-origin herbal ingredients under CEPA can price more competitively against products sourced from non-CEPA origins, or retain margin while maintaining price parity.

Supply chain formalisation: CEPA’s documentation requirements — particularly the Certificate of Origin — incentivise buyers and suppliers to formalise their supply chains. Informal or undocumented supply arrangements cannot access preferential treatment, creating a commercial incentive for compliance.

Regulatory alignment signal: The CEPA framework includes provisions for regulatory cooperation between India and UAE authorities. Over time, this is expected to reduce friction in conformity assessment, testing, and certification mutual recognition — benefiting buyers who need both Indian export documentation and UAE import compliance.

What CEPA Does Not Change

It is equally important for buyers to understand the limits of CEPA’s scope:

CEPA does not replace product-specific compliance requirements. Halal certification, UAE MOHAP registration, Dubai Municipality food safety requirements, and Emirates Authority for Standardisation and Metrology (ESMA) standards all remain fully in force. CEPA reduces tariffs; it does not alter product safety or labelling regulations.

CEPA is bilateral — UAE only. Preferential treatment under India-UAE CEPA applies to goods entering the UAE. Re-export from the UAE to Saudi Arabia, Kuwait, Qatar, Bahrain, or Oman does not automatically carry CEPA benefits. GCC-wide tariff treatment for Indian goods re-exported from the UAE depends on separate GCC rules and the specific circumstances of the re-export.

CEPA does not cover all product categories. Some categories remain on exclusion or sensitive lists and do not benefit from preferential rates. Buyers should verify the specific tariff treatment applicable to their HS code before building sourcing models that assume CEPA savings.

CEPA is not a substitute for supplier qualification. Tariff advantages are irrelevant if the underlying supplier cannot meet quality, documentation, and delivery requirements. CEPA improves the economics of good sourcing; it does not make poor sourcing viable.

CEPA in the Context of Broader India Trade Policy

India-UAE CEPA was the first of a new generation of Indian bilateral trade agreements and has been followed by agreements with Australia (ECTA, entered into force 2022) and ongoing negotiations with the EU, UK, Canada, and GCC as a bloc.

For buyers with multi-market sourcing strategies, this trajectory is significant. India is systematically building a preferential trade agreement network that progressively improves the economics of Indian-origin goods across major wellness markets. Buyers who establish India supply chains now — and build the supplier relationships, documentation capabilities, and compliance infrastructure — will be better positioned to capture compounding tariff advantages as additional agreements come into force.

The UK-India Free Trade Agreement, under negotiation as of mid-2026, is expected to include significant provisions for agricultural and processed food products including herbal ingredients. EU-India FTA negotiations, similarly active, would be transformative for Indian botanical exports to Europe if concluded. Buyers building India sourcing programmes today are positioning ahead of what is likely to become a significantly more favourable trade environment.

Working with a Sourcing Partner Who Understands CEPA

Navigating CEPA correctly requires suppliers who understand the Certificate of Origin process, buyers or their customs brokers who understand how to apply preferential rates at UAE customs, and a sourcing structure that ensures goods genuinely qualify under the rules of origin.

At Ayris Global, we work with Indian manufacturers and exporters who are experienced with CEPA documentation and export compliance. When we source on behalf of UAE or GCC buyers, we ensure that Certificate of Origin requirements are built into the shipment process from the outset — not treated as an afterthought at the point of export.

We source across the full range of herbal ingredients, botanical extracts, essential oils, and Ayurvedic products relevant to UAE and GCC buyers, from manufacturers with the certifications, export experience, and documentation capability that international trade requires.

If you are sourcing Indian herbal ingredients for UAE or GCC markets and want to ensure you are correctly structured to access CEPA preferential treatment — and sourcing from verified, compliant Indian manufacturers — contact us at sourcing@ayrisglobal.in with your requirements. We will provide a sourcing proposal that accounts for both the commercial and regulatory dimensions of your supply chain.

Related reading:
Halal Certification for Indian Herbal Ingredients: UAE and GCC Guide — the compliance requirement that sits alongside CEPA for GCC market entry
CoA, MSDS and Phytosanitary Certificates for Herbal Imports — the full documentation stack for international herbal ingredient shipments
How to Evaluate an Indian Herbal Ingredient Supplier — supplier due diligence framework for international buyers