India's Commerce Ministry to Address Non-Tariff Barriers Faced by Exporters

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India's Commerce Ministry to Address Non-Tariff Barriers Faced by Exporters

Team Finance Saathi

03/Jul/2024

Key Points:

The Commerce Ministry is developing a portal to register and address non-tariff barriers faced by Indian exporters.

The initiative aims to help achieve India's export target of US$ 1 trillion for goods by 2030 by removing barriers in key markets like the US, China, and Japan.

Key Indian exports such as food products, medicines, and industrial goods routinely face high non-tariff barriers in major global markets.

India's Commerce Ministry is taking significant steps to support the country's exporters by developing a new platform designed to register and address non-tariff barriers (NTBs). This initiative aims to help exporters navigate and overcome the myriad obstacles they face in international markets, particularly focusing on smaller items that often get overlooked. A senior official from the ministry highlighted the importance of this move, noting that the platform will allow traders to log their complaints, which will then be taken up with the concerned countries. The ministry intends to prioritize cases where these barriers impact large volumes of goods, ensuring swift resolution.

The economic think tank Global Trade Research Initiative (GTRI) has underscored the urgency of removing NTBs to meet India's ambitious export target of US$ 1 trillion for goods by 2030. GTRI's reports indicate that NTBs, often arbitrary and lacking scientific justification, significantly hinder India's export potential. The think tank suggests that India needs to upgrade its domestic systems to address quality rejections and take a firm stance against unreasonable standards or rules imposed by other countries.

GTRI Co-founder Mr. Ajay Srivastava elaborated on the challenges faced by Indian exporters. He pointed out that many exports are delayed due to time-consuming prior registration requirements and unreasonable domestic standards in other countries. Srivastava emphasized the necessity for India to engage with its trade partners to find reasonable solutions. He highlighted specific issues faced by India's food and agriculture products, which often struggle with higher pesticide levels, pests, and contamination from foot and mouth disease.

India's export landscape is dotted with numerous challenges stemming from NTBs in major markets such as the EU, US, China, Japan, and Korea. For instance, Indian exports of chilies, tea, basmati rice, milk, poultry, bovine meat, and fish frequently face high barriers in the EU. Similarly, Japan imposes stringent standards on sesame seeds, black tiger shrimps, medicines, and apparel. China poses challenges for food, meat, fish, dairy, and industrial products, while the US and South Korea have high barriers for shrimps and bovine meat, respectively.

In addition to these major markets, Indian products face NTBs in several other countries. For example, ceramic tiles encounter difficulties in Egypt, chili faces barriers in Mexico, and medicines are challenged in Argentina. Brazil and Russia also impose various non-tariff barriers on Indian goods. NTBs can arise when non-tariff measures (NTMs) intended to protect health and the environment become arbitrary and lack scientific justification, making it difficult for exporters to comply.

The new platform being developed by the Commerce Ministry is expected to bridge the information gap on these barriers, particularly for small items. By allowing traders to register their complaints, the ministry can systematically address and prioritize these issues. This proactive approach is anticipated to significantly enhance the ease of doing business for Indian exporters, thereby boosting their competitiveness in global markets.

GTRI suggests that to effectively tackle NTBs, India should not only focus on removing existing barriers but also upgrade its domestic systems to prevent quality rejections. Moreover, India should be prepared to retaliate against unreasonable standards and rules that obstruct its exports. This dual approach of addressing both external barriers and internal quality issues is crucial for achieving the ambitious export targets set by the government.

In conclusion, the development of this platform by the Commerce Ministry marks a significant step towards supporting Indian exporters in overcoming non-tariff barriers. By addressing these challenges head-on, India can enhance its export performance, contributing to economic growth and positioning itself as a key player in the global trade arena. The combined efforts of the government, trade bodies, and exporters will be essential in navigating the complex landscape of international trade and achieving the goal of US$ 1 trillion in exports by 2030.

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India's Commerce Ministry to Address Non-Tariff Barriers Faced by Exporters

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