India's Push for Global Trade Growth Hindered by Non-Tariff Barriers

16 Aug, 2023

India's Push for Global Trade Growth Hindered by Non-Tariff Barriers

Amid considerations for expanded free trade agreements aimed at dismantling tariff barriers, the surge of non-tariff barriers (NTBs) in the wake of the pandemic is casting a shadow over India's trade liberalization endeavors.

These non-tariff barriers encompass quotas, embargoes, technical regulations, and standards, as well as conformity assessment procedures designed to ensure the safety, quality, and performance of traded goods.

Several vital Indian exports encounter persistent NTBs. For instance, products such as chilies, tea, basmati rice, milk, poultry, bovine meat, and fish face heightened barriers when destined for the European Union. Similarly, sesame seeds, shrimps, medicines, and apparel confront obstacles when headed to Japan, while food, meat, fish, dairy, and industrial items encounter challenges when entering China.

Non-tariff barriers present a more intricate challenge compared to tariffs in trade regulation. While tariffs influence prices and businesses can adapt, the intricacies of compliance, intricate regulations, and the time required to meet technical and safety prerequisites can dissuade numerous small and medium-sized enterprises.

Numerous Indian exporters grapple with the complexities and delays associated with obtaining authorizations, clearances, and mandatory testing at laboratories. Furthermore, certain nations impose their unique standards and regulations that diverge from international norms. Consequently, exporters contend with elevated costs to satisfy these rigorous stipulations, occasionally necessitating alterations to production processes or revealing deficiencies in infrastructure and production technology, thereby impacting their global exports.

Primarily stemming from developed countries and regions such as the United States and the European Union, these barriers reflect a strategic response to the limited maneuverability in adjusting tariffs, due to their already low bound tariffs under World Trade Organization agreements.

While ongoing negotiations for new free trade agreements address technical barriers to trade, it remains impractical for these agreements to encompass the entirety of emerging trade barriers as countries devise innovative hindrances to international trade.