India-Japan CEPA: How to Import Japanese Machinery and Auto Parts at 0% Customs Duty

The India-Japan CEPA covers over 9,000 tariff lines, with the vast majority of industrial goods receiving 0% BCD. For Bengaluru's Peenya and Jigani industrial corridors — where machine tools, auto components, and electronics manufacturing dominate — these savings directly reduce capital expenditure and production costs. Critically, CEPA benefits apply only to originating goods — products manufactured in Japan with sufficient local value addition. Goods merely transhipped through Japan from a third country do not qualify.

These rates reflect the fully implemented CEPA tariff as of 2026. Some products had phased reductions over 10 years from 2011 and reached 0% in 2021. Always verify the current DGFT CEPA schedule for your specific HS code before budgeting, as minor amendments occur periodically. For a complete overview of all India's FTAs, see our India FTA guide.

The Form Japan-India — officially the Japan CEPA Certificate of Origin — is issued by two main authorized bodies:

• JETRO (Japan External Trade Organization) — the primary issuing body for CEPA CoOs. JETRO has offices across Japan including Tokyo, Osaka, and Nagoya, and offers both paper-based and electronic CoO services. Many large manufacturers and trading houses prefer JETRO due to its streamlined online application process and same-day processing for registered exporters.
• Japan Chamber of Commerce and Industry (JCCI) and regional chambers — also authorized to issue Form Japan-India. Smaller suppliers and regional manufacturers often use their local chamber of commerce, particularly in industrial cities like Hamamatsu, Hiroshima, and Fukuoka.

The CoO is shipment-specific. It must contain:

• Exporter name, address, and registration details;
• Importer name and address (the Indian buyer);
• Product description matching the commercial invoice exactly;
• HS code (6-digit or full national code);
• Quantity, unit, and FOB value;
• Origin criterion (e.g., "Wholly obtained" or "RVC 40%" or "CTH" for Change in Tariff Heading);
• Authorized signature, stamp, and date of issue.

Electronic CoO is increasingly available through JETRO's online platform. Electronic certificates carry the same legal weight as paper originals and are harder to forge. Indian customs accepts electronic CoOs provided they are authenticated through the issuing body's verification system. For first-time importers, we recommend requesting a paper original alongside the electronic version until your CHA confirms the specific customs port accepts electronic submissions.

The Rules of Origin under Japan CEPA typically require either 40% Japanese Regional Value Content or a qualifying Tariff Shift Rule. For most industrial machinery and auto parts manufactured in Japan's domestic factories, this threshold is easily met. However, for products assembled in Japan from significant Chinese or Korean component imports, the RVC calculation must be verified. A bearing made in Japan from Japanese steel qualifies easily; a machine assembled in Japan from 70% Chinese electrical components may not. Read our Japan import guide for freight routing and supplier due diligence.

Let us walk through a real-world example that Bengaluru manufacturers face regularly: importing a CNC machining centre from Japan.

Shipment details: CNC machining centre, HS 8457, CIF value ₹30,00,000.

CEPA saving: ₹2,92,050 on one machine. For a Peenya factory buying 5 CNC machines in a year, the total CEPA saving is ₹14,60,250 — enough to fund additional tooling or a second production line.

The same logic applies to bearings (HS 8482), where MFN BCD is 7.5% and CEPA BCD is 0%. A Bengaluru auto component manufacturer importing ₹50 lakh of Japanese bearings annually saves ₹3,75,000 in BCD alone, plus additional IGST reduction. For capital goods imports, combining CEPA with the EPCG scheme can drive total duty savings above 25%.

Does Japan CEPA apply to second-hand machinery?

Used or second-hand machinery is generally excluded from CEPA benefits. The agreement covers new goods unless specifically stated otherwise. Additionally, second-hand machinery imports into India require a certificate of age, CPCB clearance, and in some cases BIS inspection. If you are considering used Japanese equipment, budget for full MFN BCD (7.5–15%) plus all applicable compliance costs. For new machinery, CEPA remains the most cost-effective import pathway.

While Japan CEPA is exceptionally valuable for industrial importers, there are situations where it provides little or no benefit:

• Products already at 0% under ITA-1. Most computers, semiconductors, and telecommunications equipment already attract 0% BCD under the WTO Information Technology Agreement. CEPA does not create additional savings for these products. Always check whether your HS code falls under ITA-1 before assuming CEPA is your only path to zero duty.
• Exclusion list products. The CEPA has a negotiated exclusion list covering certain agricultural products, sensitive textiles, and a small number of industrial items where India or Japan retained protective tariffs. Rice, certain seafood products, and selected leather goods remain excluded. Check the DGFT CEPA schedule for your HS code.
• Services and intangible imports. CEPA covers trade in goods and has limited provisions for services. Pure software licenses, cloud services, technical consulting fees, and royalty payments are not covered by CEPA duty reductions.
• Goods with insufficient Japanese origin. If a Japanese supplier assembles products predominantly from Chinese or Korean components with less than 35–40% Japanese value addition, the goods do not qualify for CEPA benefits. This is the most common pitfall for importers buying from Japanese trading houses that source across Asia.

For machinery and auto parts — the core imports for Bengaluru's industrial belt — CEPA almost always delivers meaningful savings. If you are unsure whether your specific product qualifies, send us the HS code and supplier details for a free eligibility check. Our Peenya freight team handles Japan-to-Bengaluru machinery imports weekly, and our machinery import guide covers compliance, packaging, and inland delivery.