What Is a Letter of Credit? A Key in International Payments

Published on September 22, 2025

• 7 min read

Every day, billions of goods are transported from one country to another. This international trade has been possible due to trust between companies. As per the World Trade Organisation, global trade is valued at $25.3 trillion in 2022. The question is, how do companies trust each other, and how do exporters trust importers to pay them? Well, the trust comes from the letter of credit. It is a beneficial financial instrument that is used in international commerce. A Letter of Credit acts like a bridge of trust between the importer and the exporter.

This article will explore the necessary aspects of a letter of credit, including its definition, workings, advantages, and limitations.

Table Of Contents

What is a Letter of Credit?
Components of A Letter of Credit
How Does a Letter of Credit Work?
8 Types of Letter of Credit
Benefits of a Letter of Credit
Risks and Limitations of Letter of Credit
Get Your International Trade Seamlessly Operated With Shipping Solutions From WareIQ
Conclusion
FAQs About Letter of Credit

What is a Letter of Credit?

A letter of credit is a form of written commitment that a bank provides to the exporter on behalf of the importer. It contains the specified amount that the seller must receive once the goods are delivered. However, the seller must meet the terms and conditions listed in the letter of credit to receive the money.

LC, the full form for which is Letter of Credit, guarantees that the seller will get paid. It is also an essential document that mitigates risks for both buyer and seller in international transactions.

Components of A Letter of Credit

A letter of credit is a detailed document that has the following components:

Applicant: The buyer or the importer requesting the letter of credit.
Beneficiary: The seller or the exporter who will receive the payment.
Issuing Bank: The bank that the buyer asks to issue the letter of credit.
Advising Bank: The seller’s bank authenticates the letter of credit.
Amount: It is the value of goods on the letter of credit.
Expiry Date: It is the last date for the submission of documents.
Terms: These are the shipment terms for the shipping method, the port, and the delivery terms.
Documents Required: Includes documents such as a bill of lading, commercial invoice, packing list, insurance certificate, and certificate of origin.

How Does a Letter of Credit Work?

The letter of credit works as mentioned below:

First, a buyer and a seller agree on a transaction. As a seller would want security, they agree to use a letter of credit.
Next, the buyer has to apply for an LC from their bank, which is also known as the issuing bank.
Once the LC is issued, it is sent to the seller’s bank, also known as the advising bank.
As promised, the seller ships the goods and submits the required documents to the advising bank for payment.
The advising bank checks the documents for compliance purposes, and once everything is clear, forwards them to the issuing bank.
Once the papers are in order, the issuing bank checks the submitted documents, and payments are made to the seller.
The issuing bank then settles the payment with the buyer.

8 Types of Letter of Credit

It might seem uncommon, but there are several types of letters of credit, depending on the terms and conditions between a buyer and a seller. Below are the different kinds of letters of credit:

1. Confirmed LC

Along with the issuing bank, the advising bank guarantees payments, so the letter of credit is called the confirmed LC.

2. Revolving LC

A revolving LC is when a single LC can cover multiple shipments and allow the credit to be renewed at any time. It is usually used where regular shipments are made between the same seller and buyer.

3. Revocable and Irrevocable Credit

Revocable LC is where the bank has the full authority to change the terms and conditions without prior notice to the beneficiary. At the same time, an irrevocable LC is where the bank cannot change the terms and conditions.

4. Standby LC

Standby LC is a backup in case the buyer fails to pay the seller. It is a guarantee issued by the buyer’s bank to the seller.

5. Documentary LC

A documentary LC ensures that the issuing bank pays on behalf of the buyer once the specified documents are received.

6. Sight LC

This type of letter of credit ensures that the seller gets the payment once the seller produces the sight LC and sends it to the bank with the necessary documents.

7. Transferable Credit

As the name suggests, this LC allows the bank to transfer the payment to another party as requested by the original beneficiary.

8. Back-to-back Credit

In this type of LC, the seller can request that their bank issue an LC on behalf of the party that supplies goods to them.

Benefits of a Letter of Credit

The process may be lengthy for a transaction between a buyer and seller. However, there are several benefits since a buyer and seller transaction can happen across countries or continents. Here are the benefits of a letter of credit for both buyers and sellers:

For Buyer:

A buyer must only pay when the goods are shipped as agreed.
The risks are reduced when the trade is with new or overseas suppliers.
Buyers can align the payment terms with shipment schedules.

For Seller:

A letter of credit guarantees payment for the goods shipped.
A letter of credit reflects the buyer’s seriousness and financial standing.
Some letters of credit, such as Sight LCs, can ensure immediate payments.

Risks and Limitations of Letter of Credit

While there are many benefits to using a letter of credit for both the buyer and the seller, certain limitations and risks are also involved, and they are listed below:

It can increase the cost by including fees for issuance confirmation and document handling.
Every document needs to be accurate for the smooth flow of payment.
The buyer and seller must depend on the respective banks for adherence, timelines and standards.
Since banks don’t deal with goods, there is a chance of fraud, too.

Get Your International Trade Seamlessly Operated With Shipping Solutions From WareIQ

WareIQ’s smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times.

Our solution offers the following capabilities:

Multi-carrier engine enabling fast deliveries across 24,000+ pin codes

Control Tower & automated workflows to minimise NDR & RTOs

Same/Next-day delivery courier options

Seamless Integration with your WMS, ERPs and Storefronts

Shipping Badges to display precise Estimated Delivery Dates (EDD)

Custom branded tracking pages and notifications to enhance customer experience

Conclusion

With global trade, sellers and buyers worldwide can become business partners. The distance can create questions regarding the trust between an importer and an exporter. A letter of credit can be a metaphoric handshake across borders in such situations. Since it comes with a bank-backed framework, it ensures that payments get through and the goods are delivered in the best shape so that both importer and exporter are satisfied.

Related read – Letter of Undertaking in Shipping: What It Is and When to Use It?

FAQs About Letter of Credit

Is an LC the same as a bank guarantee?

No, a letter of credit ensures that payment is made when the supplier honours the conditions. On the other hand, a bank guarantee will make the payment in case of a default.

Is a letter of credit legally binding?

Yes, a letter of credit is completely legally binding and enforceable.

Can I transfer a letter for credit?

Yes, an LC can be transferred completely or partially to another party.

What happens if the buyer does not pay the issuing bank?

The issuing bank will still make a payment to the seller. Afterwards, the bank will recover the amount from the buyer.

Supercharge your fulfilment with WareIQ now, contact our team.

Author

Mariyam Jameela

Mariyam Jameela works as a content writer at WareIQ. With a proven track record of working with renowned brands such as GO Digit, Urban Ladder, Juspay, Hong's Kitchen, and many more. She actively contributes to the creation of blog posts centered on eCommerce operations, fulfillment, and shipping, in addition to providing insights on various strategies and techniques tailored for eCommerce sellers

Read all of Mariyam Jameela's Posts

Different Types of Tariffs and Tariff Codes with Examples

Have you ever ordered something from overseas and noticed that taxes are higher than the actual cost of the product? Well, that is a tariff, an inclusive aspect of global trade. Talking about international trade, in 2024, global trade reached a record of $33 trillion. However, a study from the UN Trade and Development suggests that the worldwide trade growth by 2025 is a little uncertain. In these times, traders must understand tariffs and tariff codes to ensure smooth international trade growth. It is also essential, as tariffs highly impact product pricing, diplomatic relations, and supply chain strategies. This article will provide examples of the different types of tariffs and also explain different tariff codes. What Does Tariff Mean in Logistics? Tariffs are taxes imposed by the government on goods imported into the country and exported out of the country. Tariffs impact the cost of goods in the country, as when a product is imported, the overall cost increases due to different tariffs applicable, making it much more expensive for consumers. Besides impacting the product’s cost, tariffs also affect companies’ decisions about the final price of a product and the structure of their supply chain. 8 Different Types of Tariffs As there are many different types of tariffs, it is essential to understand every type so that traders can do international trade seamlessly. Here are eight types of tariffs in international trade that a trader must be aware of: 1. Ad Valorem Tariffs This type of tax is usually a percentage based on the value of the imported goods. It is mostly used for luxury goods, apparel, and electronics. Example: If the product value is $1000 and the ad valorem tariff is 15%, the duty to be paid is $150. 2. Specific Tariffs This type of tariff is usually fixed in nature, and it is based on the quantity, whether it is per kilogram or per unit. The product’s price does not matter, as it is based only on the quantity. It is mostly used for raw materials and agricultural products. Example: If the specific tariff on coffee beans is $2 per kg, the importer must pay $200 for 100kg. 3. Compound Tariffs A compound tariff is the combination of both a specific tariff along with an ad valorem tariff. It is often used for products that need tighter regulations. Example: A compound tariff might resemble a combination such as 5% of the value + $3 per item. For an item that costs about a hundred dollars, the duty is $5 (ad valorem tariff) + $3 (specific tariff) = $8 per unit. 4. Protective Tariff A protective tariff is designed to shield domestic industries from their foreign competitors. The final price makes the imported goods more expensive than domestically produced goods. Example: A country imposes tariffs on foreign agricultural products to secure local production. 5. Retaliatory Tariff This type of tariff is imposed as a response to possible unfair trade practices which are imposed by other countries. Example: The US increased the tariff on China’s exports to 145%, and in retaliation, China increased the tariff on US exports to 125%. 6. Revenue Tariff Revenue tariffs are imposed to generate income for the government instead of protecting local industries. Example: Developing countries can impose tariffs of 10 to 15% on imported goods to fund public infrastructure. 7. Import Tariff The tariff imposed on the item imported into a country is called the import tariff and is the most commonly used tariff. Example: The US imposes import tariffs on imported automobiles from Europe. 8. Export Tariff Export tariffs are tariffs that apply to goods that are sent out of a country. Export tariffs are openly used to restrict the export of rare resources. For example, if a country has fewer resources for agricultural goods, it will impose a higher export tax to restrict exports. Different Types of Tariff Codes Tariff codes or Harmonised Systems (HS) codes are codes used in global trade to classify exported or imported goods. These codes are developed by the World Customs Organisation (WCO). A tariff number or a code helps to determine the applicable rate while ensuring that there is complete customs compliance. It also helps in facilitating international trade documentation seamlessly. Structure of Tariff Code Code is numerical and varies in length depending on the country. It is usually 6 to 10 digits. The initial six digits are the HS code or the harmonised tariff system code. Apart from the six digits, the country adds additional digits to specify products per their needs. Example: TARIC (Integrated Tariff of the European Union) is used in Europe, apart from the HS code. Meanwhile, the HTS (Harmonised Tariff System) is used in the United States. How Are Tariffs and HS Codes Important for International Business? For an organisation that conducts international trade, it is essential to understand both the tariff and the respective tariff code, as it can affect them in more than one way: Applying the wrong tariff code can eat away at your profit margins. A wrong HS code classification can delay your shipment, result in penalties, and even get your goods seized. When correct HS codes are applied, it can help claim preferential tariff rates under the fair trade agreement and get duty exemptions or reductions. If your business can predict the tariff cost, it can also help you choose the right supplier, estimate costs more accurately, and plan inventory around imports. Understanding the custom tariff code and applying proper HS codes allows you to set your price competitively while staying profitable; it also helps in avoiding last-minute cost shocks. Applying correct tariff classification codes during customs clearance can build a solid track record with customs, logistics partners, and financial institutions. Get Accurate HS Code Assignment and Tariff Handling With Specialised Solutions From WareIQ WareIQ’s smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times. Our solution offers the following capabilities: Multi-carrier engine enabling fast deliveries across 24,000+ pin codes Control Tower & automated workflows to minimise NDR & RTOs Same/Next-day delivery courier options Seamless Integration with your WMS, ERPs and Storefronts Shipping Badges to display precise Estimated Delivery Dates (EDD) Custom-branded tracking pages and notifications to enhance customer experience Also read - Understanding Custom Duty in India: A Comprehensive Guide Conclusion Tariffs and the respective tariff codes are cornerstones for any business that is involved in international trade. Whether you own an e-commerce business or you are into managing global supply chains, it is essential to understand how the tariffs and the subsequent HS code classification work. The understanding will allow you to have seamless processing. It will also help you to save money, time and regulatory hiccups. Suggested read - U.S. Trade Update: End of De Minimis Exemption and New Tariffs on India-Origin Shipments FAQs About Tariffs and Tariff Codes Does every import coming into the country impose tariffs?No, although a majority of imports will have tariffs, there can be some products that can enter a country duty-free as part of trade agreements.What is the main difference between a tariff and a tariff code?A tariff is a tax often imposed on imports or exports; conversely, a tariff code is the tariff classification that helps identify goods.Do tariffs have any effect on e-commerce businesses?Yes, as tariffs can increase the landed cost of the product production imported into the country. It impacts the prices, the profit margin and also the competitiveness in the e-commerce industry.Does every country have the same HS code?The first six digits are standard HS codes, while there can be additional digits depending on the country and its national classification.

September 23, 2025

CPT Incoterms: What Does CPT Mean in International Shipping?

According to a UN trade and development report, global trade hit a staggering $33 trillion in 2024. This growth has been possible due to a clear understanding of Incoterms. Also, the International Chamber of Commerce (ICC) mentions that different incoterms define different tasks, costs and risks in a trade transaction. One such term is CPT-carriage paid to. As per the Incoterms of 2020, CPT Incoterms is a multi-model rule where the seller's risk starts with export, the seller delivers the goods to the agreed carrier, and the freight is paid for the goods to be shipped to a designated location. The shipment's risk is further transferred to the buyer when the shipment is handed over to the carrier. The term CPT has different roles and obligations for a buyer and a seller. In this article, we will explain what is CPT and about CPT Incoterms and what the roles under it are. What is CPT? CPT—Carriage Paid To is an incoterm that means that the seller delivers goods to a carrier at a designated location and pays for the transportation to the selected location. The transportation can be by air, road, rail, or sea. Under CPT, both sellers and buyers have their distinct obligations. CPT Incoterms, among others, is essential for land and intermodal shipments. Also, traders more often use the CIF term for maritime shipments. Incoterms like CPT are significant to understand, as they specify who is responsible for the payment and arrangement of shipment, insurance, customs clearance, documentation, and other logistical activities. Responsibilities of Seller and Buyer Under CPT The roles and responsibilities concerning shipments of a seller and buyer are clearly defined as per CPT Incoterms and are explained below: Seller's Responsibility Arranging and ensuring that the goods are delivered to the carrier at a preset location. The seller must handle all export clearances, licensing, and inspections required in the country of origin. The seller is responsible for paying for the main carriage at the agreed location. This will also include loading the goods onto the transport at the origin and paying freight charges, terminal charges, carriage charges and handling fees until the destination terminal. The seller must also provide the buyer with all important transportation documents, such as the bill of lading, bill, and truck consignment note. This helps the buyer claim the goods. In the case of a shipment sent via sea, the seller must issue a negotiable lading bill. Buyer's Responsibility Buyers' first responsibility is to take care of the goods when they get delivered via a carrier at the pre-decided location. A buyer must handle import clearances and pay for import duties and taxation in the destination country. The buyer must also arrange any outward carriage beyond the decided destination and pay for the unloading at the final destination. Under CPT Incoterms, the buyer is not obligated to get insurance for the goods. However, it is a fair practice. Buyers can obtain insurance once the risk passes. Advantages and Disadvantages of CPT Like others in Incoterms, CPT has advantages and disadvantages for buyers and sellers. Let us understand the pros and cons of the CPT Incoterm for both parties: Advantages and Disadvantages for Sellers Advantages Cost Control The seller can control and pay for the main transport until the final destination. It helps predict the cost and leads to better scheduling. Sellers can also leverage freight contracts to avail of better rates than buyers. Consolidated Shipments Sellers who ship regularly can easily coordinate deliveries if they use their carrier. This will also help to reduce the chance of congestion at the loading point. Simplify Process As the seller takes care of the logistics in the country of origin, the buyer will not have to worry about it. Also, the seller handles export packaging, loading and customs clearance to simplify the entire process till the carrier delivers the shipment. Versatility CPT Incoterms is a concept that works with all modes of transport, offering flexibility for mixed shipments. Disadvantages Transport Responsibility It is the seller's responsibility to bear the cost of delivering the goods to the location in the buyer's country. This means the seller might be exposed to delays or price changes if anything goes wrong with the carrier. Limited Control After Delivery The seller cannot ensure the shipment's safety once the goods are handed over to the carrier. Advantages and Disadvantages For the Buyer Advantages Convenience The seller handles the long-haul part of a journey. Hence, the buyer only has to deal with the local import steps once the shipment arrives at the destination. This makes managing logistics easier for the buyer. Saves Cost Since the seller negotiates freight rates, the same can be reflected in the sale price. The buyer can benefit from the seller's buying power without negotiating. Disadvantages Early Transfer Risk One of the biggest drawbacks for buyers is that the risk starts once they get the goods with the carrier, even though the seller controls the main transportation. This becomes even more complex when a buyer may not be aware of the location or the condition of the goods. Hence, the buyer cannot claim against the carrier until the documents are present. Cost of Imports The buyer has to handle the unloading, customs clearance, and import duties when the shipment reaches the destination. Hence, it can increase the import cost. Also, if these costs are not anticipated, it can further lead to delays. Also check - DAP vs DDP: Which Shipping Term Is Right for You? Streamline Shipping Operations With WareIQ WareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times. Our solution offers the following capabilities: Multi-carrier engine enabling fast deliveries across 24,000+ pin codes Control Tower & automated workflows to minimize NDR & RTOs Same/Next-day delivery courier options Seamless Integration with your WMS, ERPs and Storefronts Shipping Badges to display precise Estimated Delivery Dates (EDD) Custom branded tracking pages and notifications to enhance customer experience Conclusion CPT (Carriage Paid To) is an Incoterm used in the shipping industry, irrespective of the mode of shipment. Under CPT, the seller handles the main carriage, but the buyer bears the shipment risk in the destination country. Transparency is essential for traders choosing CPT, and the place of the delivery and destination must be specified. It is also necessary to ensure that both sides understand when the risk will actually be transferred to the other party. Related - Mastering Incoterms in Logistics: Key Terms You Need to Know FAQs About CPT Who is responsible for the trade cost as per CPT Incoterm?The seller is the one who is responsible for arranging and paying for the shipment shipped to a specific destination.Does CPT apply to sea shipments?Yes, CPT can be used for all modes of transport, whether sea, road, rail, or air.Is CPT different from CIP?CPT stands for Carriage Paid To, while CIP stands for Carriage and Insurance Paid To. Unlike CPT, under CIP, the seller must also purchase insurance for goods shipped to a specified destination.Who will be responsible for import duties and taxes under CPT?The buyer is responsible for import clearance, taxes and any other formalities required to be fulfilled in the destination country.

September 19, 2025

Certificate of Origin: Why It’s Crucial for International Trade

A Certificate of Origin is an important commercial document which plays a vital role in international trade. It states the country where the goods in the shipment are obtained, produced, processed and manufactured. Besides the information about the goods in a consignment, the certificate is also essential to determine if the goods comply with the trade agreements. It also helps in customs clearance processes, as it informs customer authorities about the correct imposition of taxes. As per a study by WCO, the Certificate of Origin can be digitised in the future. It thus becomes essential to know the intricacies of the Certificate of Origin. In this article, we will learn the definition of a Certificate of Origin, the types of Certificates of Origin, the process of obtaining a Certificate of Origin, and other important aspects. What Is a Certificate of Origin? When it comes to the meaning of Certificate of Origin, it is the document used in international trade. It verifies the origin of the goods being exported and is critical for determining which taxes will be levied according to trade agreements. It is also known as the country of origin certificate. Some of the details that are mentioned on the Certificate of Origin are: Name and the address of the exporter Manufacturer Details Description of the product The country of origin Quantity and weight of the product Importer details HSN code Modes of transportation Invoice number Digital signature Verification from the issuing authority Significance of a Certificate of Origin in International Trade Since the Certificate of Origin for export contains all the details about a shipment, it plays a pivotal role in international trade. Below is the list of the importance of the COO: It ensures smooth transit of goods across the borders by providing all the necessary information about the shipment to the customs authorities. The Certificate of Origin ensures compliance with international tax and trade regulations, allowing companies to benefit from favourable international trade conditions. The tax rate and tariff applicable to the exported goods are decided based on the Certificate of Origin. This document is detrimental and helps determine trade measures to be taken on the exported goods. Some countries can qualify for preferential treatment, and a COO can be a deciding factor in whether they receive preferential treatment or not. It also helps avoid duties under different trade agreements. It also helps access the international market, where the Certificate of Origin is mandatory. A Certificate of Origin helps maintain accurate statistics and records for economic analysis. It serves as a critical document in resolving disputes relating to the origin of goods between countries. Different Types of Certificate of Origin There are two categories of Certificate of Origin, and they are explained below: Non-Preferential Certificate of Origin It is an ordinary certificate that contains information about the exporter and other important details about the shipment. These details signify that the shipment of goods is not qualified for preferential treatment under a trade agreement. Hence, the exporting country must pay the normal tariffs and taxes as per the agreement. Preferential Certificate of Origin As the name suggests, preferential COO indicates that the type of goods shipped by the exporter can avail of preferential treatment under the trade agreement. With the preferential COO, the exporter can get reduced tariffs and certain exemptions under the free trade agreements. For example, exports between Mexico, the United States, and Canada are provided with exemptions under the USMCA free trade agreement. When trade occurs between these countries, a preferential Certificate of Origin is required. However, in some cases, a bill of lading or commercial invoice can also suffice. Who Issues A Certificate of Origin? The Chamber of Commerce primarily issues Certificates of Origin, but certain government agencies and trade associations also have the authority to do so. However, the DGFT (Directorate General of Foreign Trade) or the Union Ministry of Commerce and Industry should authorise the issuing body. How To Get a Certificate of Origin? Obtaining a COO requires several steps, which are mentioned below: Check Eligibility The first step in obtaining a Certificate of Origin is to check if the products you are exporting are eligible for application according to the importing country's trade regulations and agreements. Collate Documents Once you know you are eligible, the next step is to gather the documents required to obtain the COO. Some of the documents/information that you would need include: Duly filled COO form Invoice Packing list Bill of lading Cover letter Product Description IEC Code Digital signature certificate Purchase order from the importer Shipping bill Cover letter Application Complete the Certificate of Origin application form and attach the required documents. Then, submit it to an authorised body that issues the COO. COO Type Selection Based on the trade agreements with the importer's country, select whether it will be a Preferential COO or a non-preferential COO. Verification The authorised body will conduct verification to check the authenticity of the submitted documents and the origin of the goods. Further enquiries or inspections might be necessary. Payment of Fees Once the inspection is satisfactorily completed, you can pay the fee. After the payment, the authorities will issue the COO. You can now include the COO with the shipping documents for smooth customs clearance. Also, if the customer authorities have any further requirements, you can coordinate with the issuing authority for next steps. This can also be done in case of discrepancies. Also read - MSDS Certificate: Essential Guide for Safety and Compliance in India With WareIQ, Get Seamless Customer Clearance WareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times. Our solution offers the following capabilities: Multi-carrier engine enabling fast deliveries across 24,000+ pin codes Control Tower & automated workflows to minimise NDR & RTOs Same/Next-day delivery courier options Seamless Integration with your WMS, ERPs and Storefronts Shipping Badges to display precise Estimated Delivery Dates (EDD) Custom-branded tracking pages and notifications to enhance customer experience Conclusion A Certificate of Origin (COO) is one of the key documents when an exporter exports goods to another country. It is essential for a smooth customer clearance process and compliance with trade regulations, and it also helps in availing of application tariff exemptions, if any. Whether the goods are being exported to a country with which the country of origin has a Free Trade Agreement or not, a COO is necessary. Depending on the destination country, an exporter can choose a preferential Certificate of Origin (COO) or a non-preferential one. A DGFT-authorised body can issue a COO; hence, it is necessary to submit proper documents to the issuing body to receive a COO. Related - Certificate of Conformity in Global Trade FAQs About Certificate of Origin What is the Certificate of Origin used for?A Certificate of Origin (COO) helps verify the country of origin for exported goods. It is also a necessary document for knowing the applicable tariff rates and maintaining compliance with trade regulations.Can a Certificate of Origin be availed online?Yes, it can be availed of electronically. The process to obtain a COO has to be completed online.What is the difference between a Preferential COO and a Non-preferential COO?Preferential COOs are COOs that certify that the goods being exported qualify for reduced tariff rates as per trade agreements. On the other hand, Non-preferential COOs are ordinary COOs which certify that goods do not qualify for reduced tariffs.What details are present on the COO?The Certificate of Origin contains details about the manufacturer, the exporter, the importer, a product description, the weight and quantity of goods, the country of origin, a commercial invoice, and shipping details.Who issues a Certificate of Origin?A Certificate of Origin is issued by bodies authorised by the DGFT (Directorate General of Foreign Trade). In India, the COO is authorised and issued by the Indian Chamber of Commerce (ICC) and the Trade Promotion Council of India (TPCI).

September 18, 2025