Countries like China, South Korea and Japan may boast of low tariffs but they have erected huge non-tariff barriers (NTBs), most of which are tailored to mask the ferocity of trade protectionism, in a bid to control the imports they deem undesirable.
An internal analysis of the Indian commerce ministry ahead of the country’s pull-out of the RCEP deal in November shows China has put in place 1,516 notifications that are nothing but technical barriers to trade (TBT), followed by South Korea (1,036), Japan (917) and Thailand (809), while India has initiated only 172 such steps. The total number of TBT measures put in place by all RCEP members, including India, stood at 5,909. India’s average applied tariff, however, stood at 17.1%, the highest among RCEP members, while China’s was 9.8%, South Korea’s 13.7% and Japan’s 4.4%.
Similarly, China has notified 1,332 sanitary and phytosanitary (SPS) measures, while South Korea and Japan have imposed 777 and 754 SPS barriers, respectively. The NTBs slapped by various trading partners came up for deliberations at an inter-ministerial meeting on December 23, chaired by commerce and industry minister Piyush Goyal. It was also revealed that while most of India’s key partners had built in elevated levels of NTBs, only about 10% of New Delhi’s imported products were subject to various standards.
Exporters say some of the common NTBs that they are subjected to are stringent rules on product certification, labelling standards and import approval requirements. Customs clearances face delays and often (especially in case of China) factory has to be inspected at the exporter’s expense. Customs value of the same item may vary for duty calculation depending on ports and rules are frequently changed and details are not easily available in English.