Non Tariff Barriers - Invisible Road Block?
The Dollar Business|September 2017

While there has been a lot of talk about tariffbarriers that Indian exporters face while shipping goods and services overseas, discussions on non-tariff barriers have been kept restricted to narrow confines. The reason is simple – lack of awareness about non-tariffbarriers amongst Indian exporters. The fact though is that non-tariffbarriers are increasingly posing a bigger challenge to India's exports than traditional tariffs. What can Indian trade authorities do to minimise the pain caused by these masked barriers to free trade, if not eliminate them altogether? The Dollar Business analyses.

Non Tariff Barriers - Invisible Road Block?

A few decades ago, high tariffs or import duties were considered to be the prime challenge to cross-border trade. But, over the years as markets opened up, tariffs have rapidly declined under the World Trade Organisation (WTO) regime. One would therefore imagine that free trade would have certainly received a thumping boost from the lowered tariffs. Not so.

Countries have now found new methods, some entirely justified while others not so, to restrict trade without increasing tariffs. Let us take the case of Algeria as an example. In FY2013, India’s exports from the automobile sector to Algeria was $437.28 million. Now compare this to FY2017 when India's exports of automobiles to the country grossed just $122.16 million, reporting a massive decline of over 72%! What brought about the fall?

While there were many changes in the world economy, a closer look reveals that during the said duration, Algeria imposed a series of regulations on imports of automobiles and components – from imposing a new regulation with regards to airbags in vehicles to a 17% VAT exemption for domestic manufacturers. Interestingly, the Algerian government is now attempting a clampdown on 'disguised' imports (where assembling and local parts are minimal). Similarly, some Indian exporters of garments to EU end up paying as much as $3 per piece to meet the labelling and packaging specifications that further eats into their already narrowing margins. There are umpteen similar cases.

This means a country or a region can effectively restrict imports without imposing higher tariffs on imports. These are called non-tariff barriers (NTBs), which are now posing a much bigger challenge to cross-border trade than tariff barriers. Reason − exporters are less aware of NTBs and in absence of ad-valorem taxes, as in the case of tariff barriers, they find it difficult to calculate the damage suffered.

NATURE OF THE BEAST

Esta historia es de la edición September 2017 de The Dollar Business.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición September 2017 de The Dollar Business.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE THE DOLLAR BUSINESSVer todo
'We Are One Of India's Biggest Trade Partners'
The Dollar Business

'We Are One Of India's Biggest Trade Partners'

References of a strong trade alliance between India and Netherlands can be traced back to the 17th century. Even today, the two nations boast of a robust relationship. In an interaction with The Dollar Business, H.E. Alphonsus Stoelinga, Ambassador of Netherlands to India, talks about the ways to further consolidate the strong bilateral relations and maximise opportunities for investors from both countries.

time-read
10 minutos  |
December 2017
'India Is A Priority Market For Amul'
The Dollar Business

'India Is A Priority Market For Amul'

When one talks about dairy products in India, the first name that perhaps comes to mind is Amul. R. S. Sodhi, Managing Director of Gujarat Co-Operative Milk Marketing Federation (GCMMF which owns the brand) Ltd., spoke with The Dollar Business about the USP of the cooperative, the continued relevance of its business model and Amul’s expansion across overseas markets.

time-read
5 minutos  |
December 2017
New-gen Newsmakers
The Dollar Business

New-gen Newsmakers

The Dollar Business Celebrates the Success of Rising Stars of Indian Foreign Trade for Them the Sky Is No Limit, It’s Just a Direction!

time-read
10+ minutos  |
December 2016
We Will Be Exporting to 30 Markets From India by End of 2016
The Dollar Business

We Will Be Exporting to 30 Markets From India by End of 2016

Daimler AG has been active in the commercial vehicle business in India since the 1950s. However, it only started manufacturing in the country in 2012 through its subsidiary Daimler India Commercial Vehicles (DICV). And since then there has been no looking back. The Dollar Business caught up with Erich Nesselhauf, MD & CEO, DICV, to know the secret to DICV's success.

time-read
4 minutos  |
December 2016
Rcep Can Boost Business Across a Large Region
The Dollar Business

Rcep Can Boost Business Across a Large Region

New Zealand and India have a lot in common – from their love for cricket to their Commonwealth heritage and much more. Despite this the bilateral trade between the two countries is yet to live up to its potential. In an exclusive interaction with The Dollar Business, Grahame Morton, High Commissioner of New Zealand to India, talks about various ways to improve social, political and trade ties between the two nations.

time-read
10+ minutos  |
October 2016
MEIS: When Change Is the Only Constant
The Dollar Business

MEIS: When Change Is the Only Constant

The Merchandise Export from India Scheme (MEIS), which was introduced in FTP 2015-2020, has undergone several changes. Recently again, while 2,901 tarifflines were added to the MEIS schedule, reward rates across 575 tarifflines were altered. While just the word ‘added’ may sound good to some exporters, for the most, frequent changes and ambiguities in notifications are confusing many.

time-read
6 minutos  |
October 2016
The Dollar Business

FTP Mid - Term Review : Will Exporters Woes Continue?

India's exporters got little from this year's Union Budget. The recently implemented Goods and Services Tax (GST) further left them confused. They now can't wait to learn what 'happy surprises' the mid-term review of the Foreign Trade Policy has in store for them. And not to say, their expectations from the mid-term review have changed in the past weeks. [It's just getting bigger!] The Dollar Business reaches out to India's EXIM community to learn what it desires from the FTP revision and how GST has impacted its wishlist.

time-read
10+ minutos  |
August 2017
Exporters Find It Tough To Honour High Volume Commitments
The Dollar Business

Exporters Find It Tough To Honour High Volume Commitments

Agricultural and Processed Food Products Export Development Authority (APEDA), established in 1985, has been instrumental in identifying new markets and providing better support systems to exporters of agricultural and processed food products. In a tête-à-tête with The Dollar Business, Devendra Kumar Singh, Chairman of APEDA, throws light on the various initiatives that APEDA is taking up to give exports a boost.

time-read
6 minutos  |
August 2017
Can India's Outsourcing Industry Survive The Trump Attack?
The Dollar Business

Can India's Outsourcing Industry Survive The Trump Attack?

Uncertainty has descended upon the $150-billion Indian outsourcing industry in anticipation of the protectionist regime under President Trump. Protectionism has been a popular election rhetoric across nations, and more so in recent times. And the voting masses seem to like it. Will Trump’s campaign cry for protectionism cross the boundaries of poetic drama and come alive as laws? There is no doubt that US being the largest consumer nation in the world, governments across the globe will keep a close watch on Trump’s policies. India will be no exception. The hot-button topic for India – ‘outsourcing’, has surfaced again and the impact of Trump’s announcements, be it restrictions on H-1B visas or penal taxes on US companies for outsourcing jobs, is being felt already in India. And this, coming during times when India's outsourcing industry has been experiencing a rough patch isn't an encouraging development. How hard will an avalanche of protectionist measures from the Trump regime hit India's outsourcing industry?

time-read
10+ minutos  |
February 2017
Our Sourcing From India Will Double In The Next Few Years
The Dollar Business

Our Sourcing From India Will Double In The Next Few Years

It's a known fact that the Indian government is working hard to increase defence and aerospace procurement from indigenous sources – from the current 40% to 70%, in the next 10 years. The Dollar Business recently caught up with Pratyush Kumar, President, Boeing India, to understand how manufacturers in India can leverage growth opportunities and what makes India a preferred sourcing destination for the American aircraft-maker.

time-read
4 minutos  |
February 2017