India is working on a compromise proposal to resolve differences with the European Union on issues such as rules for determining the origin of goods, and thereby duty concessions as part of bilateral free trade agreement (FTA) talks.The proposal is being prepared for certain goods such as chemicals after considering the value chain of exported products and positions reflected in some of India's recent FTAs such as with the EFTA (European Free Trade Association). These rules are vital for checking any circumvention of FTA rules and flow of cheap imports into India.The development comes ahead of EU trade commissioner MaroS Šefcovi's likely visit to India later this month. "Product-specific rules of origin are being discussed. We have exchanged our key asks and their commercial significance is being assessed," said an official.Product-specific rules of origin specify that goods which do not originate in a partner country must undergo a change in tariff classification or a specific manufacturing or processing operation for obtaining origin status and tariff concessions.117924738India's earlier trade pacts had simple rules of origin linked to the wholly-obtained criterion from the trade partner country, value-added criteria or change in tariff heading parameter, which means transformation of a product leading to a change in its duty classification. However, the rules are getting more complex to offer greater flexibility to specific goods.The compromise proposal also assumes significance as the EU had earlier proposed process rules for India like its other FTAs. In textiles, it had suggested some processes related to spinning for yarn to be considered of European or Indian origin. India-EU trade reached $180 billion in FY24, with India exporting $106.31 billion in goods and services and the EU exporting $94.79 billion. The tenth round of India-EU FTA negotiations is scheduled for March 10-15 in Brussels with both sides expected to look at bridging their differences on issues such as rules of origin and government procurement.