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Maximum Non-Tariff Barriers Faced In Us

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Last Updated : Jan 28 2013 | 12:33 AM IST

* In Japan, Indian roses are brought to auction platforms towards the end of the session, by when, prices have dipped;


* In Indonesia, non-Basmati imports from India are allowed a broken rice content of only 15 per cent. For China, Vietnam and Thailand, the permissible levels are 25 per cent;


* Kenya imports fruit from South Africa but does not allow similar imports from India, on the grounds that India's tropical climate affects quality;


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* The EU doesn't allow its members to import Indian whisky on the pretext that it is based on molasses and not cereal.

These are a few examples of the non-tariff barriers (NTBs) that Indian exporters face in various parts of the globe, according to a recent report prepared by the department of commerce.

The report suggests that Indian exporters tend to suffer more than other exporters on account of NTBs. Compared to the global average, the report says, Indian exports to the US face greater NTBs.

For instance, 25 per cent of India's exports in value-terms are subjected to safety requirements against the global average of 22 per cent, and 19 per cent are faced with labeling restrictions against 16 per cent from other countries.

Other than the usual suspects -- labour, environment, and sanitary and phyto-sanitary measures -- Indian exporters regularly come up against novel forms of trade restrictions in global markets. The report calls these "indirect" NTBs as opposed to "direct" NTBs such as quantitative restrictions, export subsidies, government procurement and import licensing.

The indirect NTBs that Indian exporters are subject to include measures like health and safety and technical regulations, customs valuation procedures and marks of origin restrictions.

Even anti-dumping duties, countervailing duties, regional subsidisation, subsidisation of public enterprises, tied aid, etc, come under this category.

Among the products to be hardest hit by the NTBs are textiles, nuts, fruit and vegetables, iron and steel, machinery, pharmaceuticals, wood and marine products.

Also, India's three largest trading partners -- the US, the EU and Japan -- account for a majority of the NTBs. Among these, the US accounts for the maximum number though developing countries are also on the list.

Apart from product-specific NTBs imposed by various countries, the report also lists out unilateral measures put in place by the US. These include "Special 301" measures, essentially to protect intellectual property rights.

Also, under the Water Resources Development Act, the US can impose ad valorem taxes of 0.125 per cent.

The report said that the tax burden on exports from the US and national freight for domestic consumption are relatively lower and exceptions are permitted.

This report, which was prepared in consultation with exporters and industry, is the second attempt to judge the impact of the NTBs on Indian exports.

The first was prepared in 1999. Both reports were prepared by HAC Prasad, economic advisor in the commerce department.

The current report is, however, the first attempt to quantify NTBs. For this, the report has drawn on the database of the United Nations Conference of Trade and Development (Unctad).

According to the Unctad estimate used by the commerce department, 44 per cent of India's of exports in 1999 worth around $35 billion, faced NTBs in the US.

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First Published: Jan 03 2002 | 12:00 AM IST

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