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INTRODUCTION:..................................................................................................2 REASON FOR IMPOSING A TARIFF:......................................................................2 EFFECTS ON WELFARE:.......................................................................................2 EFFECTS WHEN A LARGE COUNTRY IMPOSES AN IMPORT TARIFF:.....................3 WORLD SUGAR SUPPLY AND DEMAND:..................................................................4 INDIA:.................................................................................................................5 ARGENTINA:........................................................................................................6 UNITED STATES:.................................................................................................8 AUSTRALIA..........................................................................................................9 NON TARIFF BARRIERS: INDIA’S EXPORT TO ASEAN............................................10 Barriers Related to Product Standards.............................................................11 Barriers Related to Process Standards.............................................................12 CONCLUSION:......................................................................................................13 Summary and Policy Implications of NTBs........................................................13 TARIFF IMPOSING COUNTRIES:.........................................................................14 BIBLOGRAPHY:.....................................................................................................14 BIBLOGRAPHY:


The benefits of trade have been known for more than two centuries, at least since the work of David hume, Adam Smith, and David Ricardo. The controversial nature of trade, particularly its effect of redistributing income within each participating country. The policies countries use to restrict trade are called barriers of trade, one of which is the tariff. A tariff is a tax imposed on a good as it crosses a national boundary. Tariffs were the most commonly used type of trade restriction; in recent years, however, use of tariffs has declined, and use of a variety of other trade restrictions has increased. Average tariff levels have fallen both in the United States and abroad, largely as a result of international negotiations conducted under the General Agreement on Tariffs and Trade (GATT), now called the World trade Organization (WTO), a forum created after World War II for international negotiation of trade issues.

A country might impose a tariff for any of four reasons, which are as follows: 1. A tariff, like any tax discourages consumption of a particular good. 2. A tariff, like any tax, is to generate government revenue. Developed countries rarely impose tariffs specifically to raise revenue, because those countries have the infrastructure necessary to administer other taxes. 3. Imposing tariffs is to discourage imports to eliminate a balance-of-trade deficit. A country designing a tariff to reduce a trade deficit would apply the tariff to a broad range of goods. 4. Most common purpose of tariffs, and the one on which we’ll focus, is as a protectionist policy-a way to “protect” or insulate a domestic industry from competition by foreign producers of the same good.


A tariff’s impact on production, prices, and consumption translates into an effect on the small country’s welfare. We need a measure of welfare, called consumer surplus and producer surplus. Consumer Surplus measures the satisfaction consumers receive from a good beyond the amount they must pay to obtain it. Producer Surplus measures the revenue producers receive beyond the minimum required to induce them to supply the good. There is another term called revenue effect, a transfer from consumer surplus to the government that collects the tariff revenue. The amount of revenue raised by the tariff equals the quantity of imports with tariff. The tariff transfers this revenue from consumers to the government, and most analyses assume that the government uses the revenue to finance spending it otherwise would finance with some type of domestic tax. Therefore, the tariff’s the revenue effect represents not a net welfare loss to the country but merely a transfer. Other term called redistribution effect-the consumer surplus that the tariff transfers to domestic producers. Like the revenue effect, the tariff’s redistribution effect isn’t lost to society, but rather transferred from consumers to domestic producers of good. The transfer takes place through the higher prices consumers pay and domestic producers receive with the tariff. The tariff production effect, with the tariff, units of on good through another good are now produced domestically rather than imported. Producing each of those units domestically involves production cost. Dead weight loss to the small country but lost through inefficient domestic production. Efficiency requires each unit of a good to be produced by the low-opportunity-cost supplier. Other term consumption effect is the loss of consumer surplus that occurs because consumers no longer can obtain units of a good at some price with the tariff.

A large country constitutes a share of the world market sufficient to enable it to affect its terms of trade. When this condition is satisfied, the country may be able to use an import tariff to improve its terms of trade. Therefore, a large country can in some cases improve its welfare by imposing a tariff, an outcome impossible for a small country. Some developing countries, for example, produce a large share of the world total of some products and therefore possess some market power. Imposition of an import tariff by a large country has two effects on the country’s welfare. The first, called the volume-of-trade

effect, occurs when the tariff lowers welfare by discouraging trade. Second, by lowering the price foreign producers receive, the tariff causes a terms-of-trade effect that enhances welfare in the tariff imposing country. The tariff rate that maximizes the net benefits to the country is called the optimal tariff. The optimal tariff for a small country always equals zero because of the absence of any terms-of-trade effect. A large country begins from unrestricted trade, increasing the tariff raises welfare up to a point beyond which welfare begins to decline. Policies such as optimal tariffs that try to improve the welfare of the domestic country at the expense of others are called beggar-thy-neighbor policies. The beggar-thy-neighbor character of tariffs implies that they risk retaliation by trading partners. Thus to explain the tariffs and its behaviour and impact on the country due to those tariffs two types of countries are taken one is the non-tariff country and tariff imposing countries. NON-TARIFF COUNTRY: Exports from India to All ASEAN countries. TARIFF IMPOSING COUNTRIES: • • • • India. Argentina. Australia. United States.

To explain only a single commodity is taken i.e. sugar where the production and consumption among these countries are shown.

The world sugar supply in the marketing in year 2008/2009 is 161.70 million tons, raw value, down 3.48 million tons from 2007/2008. The reason of this down ward supply was due to unprecedented 45% fall in Indian production, 14% fall in EU, 16% fall in China, 7% fall in Thailand and about one third decline in Pakistan. Only Brazil had raised its output by 5%. While the demand continued to rise 2.91% during 2008/09 but it was lower than the earlier year because world economic crisis hurt the income component. World Centrifugal Sugar Supply, production and distribution (Million tonnes Raw Value):

Marketin g year 2004/05 2005/06 2006/07 2007/08 2008/09

Beginning stocks 38.83 35.14 30.95 39.93 44.86

Total sugar production 140.10 144.15 164.18 165.18 161.70

Total impor t 42.88 42.71 46.10 45.95 46.59

Total supply 222.52 222.01 241.23 251.37 253.15

Total export 46.32 47.72 50.44 50.24 51

world consumptio n 141.06 142.78 150.86 156.27 160.81

Ending stocks

35.14 30.95 39.93 44.86 41.34

Indian sugar production is typically follows a 6 to 8 year cycle, wherein 3 to 4 years of higher production are followed by 2 to 3 years of lower production. Two consecutive years (2005/06 and 2006/07) of record sugar production resulted in abnormally large stocks and low prices, setting in motion the downtrend in sugar cycle in 2007/08, which is continued to downward in the upcoming year 2008/09. The dispute with the state government, cane crushing by sugar mills has delayed in cane price payment to farmers; consequently former has coupled with relatively higher prices of food grains and also sugarcane, this lead to the declination in sugarcane production area about 16 percent from 2007 to 2008/09. Due to this reason the domestic sugar production has sharply dropped. Heavy rains and floods during July-August in the northern states, have also adversely affected cane yield prospects. Consequently, 2008/09 centrifugal sugar production is decline to 24.83 million tons, nearly 16.11 percent lower than last year. The Centrifugal sugar production in 2008/09 is revised lower to 24.83 million tons on higher diversion of cane for production of alternative sweeteners.

Indian Centrifugal Sugar Supply, production and distribution (Million tonnes Raw Value): Marketing Year Beginning Stocks Total Sugar Production Total Imports Total Supply Total Exports Domestic consumption Ending Stocks










2006/07 2007/08 2008/09

4.18 10.16 12.19

30.78 28.93 24.83

0 0 0

34.95 39.09 37.02

2.68 3.70 1.30

22.11 23.20 24.30

10.16 12.19 11.42

Since the consumption of the sugar is increasing from year to year thus the tax imposed when imported is different as per the types of the sugar.
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For cane or beet sugar and chemically pure sucrose, in solid form the rate of duty is 100%. Other sugar, including chemically pure Lactose, Maltose, Glucose and Fructose, in solid form; sugar syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; Carmel the rate of duty is 30%. Sugar confectionary (including white chocolate), not containing cocoa the rate of duty is 45%.

Overview Argentine agriculture is relatively capital intensive, today providing about 7% of all employment and, even during its period of dominance around 1900, accounting for no more than a third of all labour. Having accounted for 20% of GDP as late as 1959, it adds, directly, less than 10% today; however, agricultural goods, whether raw or processed, still earn over half of Argentina's foreign exchange and, arguably, remain an indispensable pillar of the country's social progress and economic prosperity. Production increase in year: The Argentine sugar sector has shown a remarkable production increase in recent years. However, there was no need of increasing the planted area in a considerable way. While the whole area corresponding to the producing provinces (Salta, Jujuy and Tucumán) is around 250,000 hectares, the volumes obtained indicate a clear growth.


Production, Export, Import, consumption & Value in Million US$ Year Product Import in Tons Expo Consump ion in rt in tion in Tons Tons Tons 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1649140 1749184 1568156 1557703 1607423 1655616 1924779 1815845 2138826 2438492 63401 393 1456 1583 1367 972 402 7384 2826 2983 1397 32 1781 06 1958 94 1844 82 1146 00 2710 24 1773 14 2290 56 5357 80 7142 64 1469915 1468664 1283858 1284864 1396439 1294920 1585655 1489881 1500815 1614216

Millio n US$ 425 450 415 420 422 450 525 485 575 651

Below the data shows the evolution of sugar production in Argentina in the last 10 years, in volume. • The production increase and record harvests achieved by this sector are the result of investments in the growing activity and in the industrial processing made in the last ten years. In 2005 production was 2,138,826 tons of crude sugar (17.8% higher than the previous year). In 2006 production of crude sugar increased 14%, reaching 2,438,492 tons. As commented in a previous report, investments were directed to:


• •

Machinery and installations at sugar mills with equipment that incorporated the most recent technological innovations. Concentration of sugarcane plantations in the most suitable areas and replanting with higher yield species, the most outstanding being the LCP85-384 brought from Louisiana, United States. Incorporation of new generation combine harvesters that in addition to being more efficient can harvest green sugarcane without the traditional previous burning. This caused a remarkable improvement from an ecological viewpoint and placed our country as leader in the use of these systems. Record harvest and production of 2.68 million tons of crude sugar were estimated for the present year (10% higher than the previous year), but a series of problems seem to be hindering this objective. In the first place the lack of gas delayed the beginning of the harvest (only at the start, as the main input used to continue the harvest is the same bagasse). In the second place, rainfall registered reduced the firmness of the land hampering the introduction of combine harvesters into the field. Finally, also important was the negative impact of frost and of low temperatures suffered by the north region that will reduce the sugarcane yields. As a consequence, it is estimated that 2007 production will repeat the figures of 2006. The sugar sector supplies mainly the local market, and is trying to increase exports aiming at achieving higher production levels. The results of these efforts are reflected in the chart 2, that shows the comparative evolution of production and exports in the last decade. It can be observed that in recent years as production increased, there was a consequent increase in exports. 2006 production (2.4 million tons of crude sugar) was 32% higher than that of 2004 (1.8 million tons of crude sugar), and in the same period exports increased 217.20%. Below data shows Argentine sugar exports in volume and in dollars for the period 1996-2006. Exports from January to April of the current year reached 12,342.5 tons of crude sugar (equivalent to an estimated amount of US$ 3,702,750), and it is anticipated that exports will reach 600,000 tons by the end of the year & other important parameters registered by this activity are imports and sugar consumption. The chart summarizes the global evolution of this sector in the last 10 years. The international scene shows that Brazil (1st world producer) will have an estimated growth of 11.2% in sugarcane production and that this production will be increasingly directed to industrial processing.

• •

India (the 2nd world producer) is anticipating a dramatic growth of 42% in sugar production compared to the previous year. Russia (main importer of this product) has the objective of increasing productivity precisely to avoid imports and get free from the fluctuation of international prices. These factors are to be added to the fact that in the world there are 9 million tons exceeding world demand. The result of this is a fall in the international price that is usually referred to the London Contract Nr. 5 for white sugar. The quotation reached its peak of US$ 500 in 2006. At the moment, it is around US$ 309, and in spite of having decreased it continues to be a very good price.

U.S. sugar production in 2005/06 is forecast at 7.2 million tons, an increase of 1 percent from last year's production. U.S. production of sugar processed from sugarbeets in 2005/06 is forecast at 3.9 million tons, up 3 percent from 2007, while sugar produced from sugarcane is projected at 3.3 million tons, down 1 percent. U. S. sugar exports in 2005/06 are forecast at 136,000 tons, down 19 percent from the previous year's shipments. The U. S. ships mainly to Canada, Mexico, and Jamaica. For fiscal year 2007, the United States allocated 1.6 million tons of sugar under the raw sugar tariff rate quota (TRQ) (see table on this page). Throughout the year, according to stocks-to-use ratio published in the WASDE, tranches of 200,000 tons were cancelled or allocated. During FY 2008, the January tranche was cancelled, while the March and May tranches was allocated. Central America Productio 3474 3180 3493 3500 3594 3656 3936 n Import Export 0 35 32 0 12 5 11 3758 4052



2101 1756 1963 2125 2092 2148 2184

2093 2384 1601 1614

Consump 1392 1414 1434 1463 1482 1532 1589 tion Ending Stocks 320 336 464 376 408 389 772




South America Productio 2193 2503 2717 2403 2796 3145 34326 3613 3719 7 4 n 1 5 9 6 6 8 Import Export 1312 1089 870 930 941 669 633 708 851

8974 1039 1288 9279 1331 1612 17402 2028 2093 2 5 1 1 8 6

Consump 1482 1509 1553 1554 1593 1612 16538 1676 1740 2 1 tion 4 0 3 3 0 2 Ending Stocks 1467 2175 2003 2147 1806 1685 2850 2651 2195

Average import tariff in USA for Sugar is 63.8. Average import tariffs, by commodity and importing region all Commodities AVG. is 6.4. Agriculture AVG. is 10.4.

Australian production of sugar cane is forecast to fall by 3 per cent to 35 million tons in 2007-08 as a result of adverse seasonal conditions. Drought in southern Queensland And excessive rainfall in northern Queensland are expected to reduce cane and sugar Yields in 2007-08. In addition, in New South Wales and southern Queensland, some frost affected cane has been cut for fodder. In the central and Herbert– Burdekin regions, where approximately half of Australia’s cane is grown, a return to average seasonal conditions, a late start to the season, and an increase in the area planted with higher yielding varieties have boosted average sugar yields compared with 2006-07.In most of northern Queensland, cane production has recovered from cyclone Larry, although excessive rainfall close to and during the harvest is forecast to reduce cane and sugar yields. Cane production in the regions supplying the Tully and Babinda mills is forecast to fall by around 500 000 tonnes to 2.4 million tonnes. In the neighbouring region that supplies the Mulgravemill, sugar cane production is forecast to fall by150 000 tonnes to 1.15 million tonnes as rainfall has-been below average. Water allocations in the region around Bundaberg, which is responsible for about 6 per cent of Australia’s sugar cane production, will be reduced to3 per cent of the previous year’s amount in 2007-08.As less water will lead to lower yields; sugar cane production in this region is forecast to fall by around600 000 tonnes to 1.6 million tonnes. Further inland, cane production in the region supplying the Isis millions forecast to unchanged, although lower sugar yields are expected as frost has damaged the cane. In 2007-commercial cane sugar

(CCS) values are forecast to average 13.2 per cent, 0.3percentage points higher than in 2006-07. An increase in CCS values in the important central and Herbert–Burdekin regions is expected to more than offset the effects of lower CCS values in the northern and southern regions. Despite a smaller Australian cane harvest, a higher average CCS value relative to last season means that sugar production will not fall by as much as the cane harvest. Australian production of sugar is forecast to be slightly lower in 2007-08 than in 2006-07, at 4.63million tones. Lower productions will flow through to lower exports. With lower world prices and an assumed appreciation of the Australian dollar relative to 2006-07, the value of exports is forecast to fall by 27 per cent to $985 million.
Australia 1998 2005 1999 2000 2001 2002 2003 2004

Production Imports Total Supply Exports Domestic Consumpti on Ending Stocks

















































Import tariffs on sugar- 3.1%, Import tariffs on Sugarcane, Sugar beet2%, Average Import Tariff- 4.5%, Import tariffs on agriculture commodity2%, Quota allocation-126,552(metric tons).

While market access would improve on account of reduction of import duties, it may be thwarted due to the application of non-tariff measures. It is important to define non-tariff barriers. Any restriction imposed on the free flow of trade is a trade barrier. Trade barriers can either be tariff

barriers, that is levy of ordinary customs duties within the binding commitments undertaken by the concerned country in accordance with Article II of GATT or non tariff barriers, that is any trade barriers other than the tariff barriers. Non-tariff barriers can take various forms. Broadly these can be categorised as under: • • • • • Import Policy Barriers Standards, Testing, Labelling and Certification requirements Anti-dumping & Countervailing Measures Export Subsidies and Domestic Support Government procurement

The study finds that the incidence of non-tariff measures on India’s exports to ASEAN and Sri Lanka has increased ASEAN and Sri Lanka has increased. The incidence is higher for India’s exports to Indonesia, Philippines, Malaysia and Thailand than for exports to Singapore, Vietnam and Sri Lanka. At the firm level, most of the barriers were related to the application of measures on Technical Barriers to Trade and Sanitary and Phytosanitary Measures. The study points out that for some products (e.g., peanuts) standards amongst the ASEAN countries vary significantly making it difficult for Indian exporters to target the ASEAN market as a region. In meat products, importers made unreasonable demands for processes which discriminated against small and medium enterprises. The study also indicated that there were barriers related to certification, registration and testing.

Barriers Related to Product Standards
Barriers related to product standards are the main concern of India's export today. The potential to use product standards as hidden trade barriers is immense. If even a small part of this potential is allowed to be exploited, the implementation of the free trade regime could become dominated by protectionists and those who would welcome trade retaliation and counter retaliation. However, transparency and harmonisation of standards could become trade facilitators in addition to providing technical quality and safety parameters. Rice: In India there about 600 varieties of rice are grown. These include both basmati and non- basmati rice. During a survey it was seen that there are wide variations in the specifications by importers on the percentage of broken rice, both in case of basmati and non basmati rice. For example, Indonesia imports 25% broken non – basmati rice unlike other ASEAN countries like Malaysia and Singapore that import 20% broke (non-basmati) rice. Sri Lanka, accepts up to 100% broken rice (nonbasmati).This indicates that there is a multiplicity of product standards even among ASEAN countries and it becomes very difficult for exporters to meet individual country demands. Thus harmonisation of standards is very important to begin with.

Peanuts: Aflatoxin contamination of groundnut is a widespread problem in most groundnut-producing countries. It is a type of a fungus which is a natural syndrome for any groundnut farmed under rain fed conditions. The Aflatoxin contamination does not affect crop productivity but it makes the produce unfit for consumption as toxins are injurious to health. Most countries specify the Aflatoxin limit for the exports of groundnut. At present the permissible limit of Aflatoxin for groundnuts in the European union is 2 ppb whereas in case of the ASEAN countries like Malaysia and Indonesia the limits stands at 5ppb. Quite interestingly the survey revealed that Singapore has put a stipulation of 0% Aflatoxin (below the traceable limits) for any import of groundnut in the country. Now given the present agricultural scenario of the country, exporters from India consider the Aflatoxin levels specified by Singapore as a non tariff barrier. The above is a clear case of setting up a standard without any scientific justification and risk assessment which is advocated in the SPS Agreement. Countries are using the liberty of adopting higher standards in SPS Agreement as non tariff barriers to protect their interests. Exporting countries should take this up as bilaterally for future trade negotiations. Yarn: Importers insist on special qualities of yarn which pose a constraint to Indian exporters. Importers from Thailand are demanding fire retardant yarn. However, in India it is very difficult to guarantee fire retardant yarn as most of the Indian mills do not manufacture such yarn. This type of yarn is more expensive than the normal yarn but the importer is willing to pay the required amount. Indian exporters lack the capacity and technology to meet such specifications of yarn. There is only one mill in India (In Kolkata) which has the required technology and infrastructure to meet the buyers specifications. The mill does not have the capacity to suffice international demand of fire retardant yarn, hence we loose out on clients. This does not indicate the prevalence of an NTB but is a clear case of lack of technology and capacity. The Government of India should help industry to upgrade the technology and capacity building. Capsules: In the pharmaceutical health industry, gelatin is used to make the shells of hard and soft capsules for medicines, dietary/health supplements, syrups, etc. It is highly digestible and serves as a natural protective coating for medication. Gelatin form thermally reversible gels with water, and the gel melting temperature (<35°C) is below body temperature, which gives gelatin products unique organoleptic properties and flavor release. This type of gelatin is derived from animal hide and bone, hence there are problems with regard to kosher and Halal status. It was found in the course of the survey that for exports of capsules to ASEAN countries such as Indonesia, Malaysia and Thailand the exporter needs to procure the Halal certificate from the Government of India (Ministry of health) mentioning that the gelatin is derived from Halal animal. While the time and cost involved in obtaining such certification is not much, it is an irritant for exporters, as it is required only for three ASEAN countries.

One way to overcome this irritant is to accept the certification for Halal only once and not repeatedly for every consignment.

Barriers Related to Process Standards
Many countries link up quality of the product with production processes also. Thus, what is under surveillance, is not just the end - product but also the process of production of end - product. In India, where most primary production takes place at very unorganised, small - scale units, such primary-level quality assurances are hard to give. PPMs is a major issue between Indian exporters and importing countries. The exporting country contention is that the importing countries should be bothered about quality of the final product not the manufacturing process. It is because every country has different natural resources and method of production. The importing countries method of production cannot be applied in importing countries. Thus Indian exporters face lot of barriers on PPM account.

Category II Barriers

This section deals with case studies related to barriers such as import quota, licensing, prohibitions and anti-dumping duties. Import quota: Import trade quota is a trade barrier that sets the maximum quantity (quantitative restriction) or value of a commodity allowed to enter a country during a specified time period. It was observed during the course of the study that certain countries like Vietnam impose a quota on the imports of some products like auto components. Exporters find it difficult to plan production till they get their quotas. Licensing: Licensing is a means to control imports, depending on compliance with specific criteria, used by various countries to safeguard their domestic industry. These schemes can be applied for a variety of purposes, according to both economic and noneconomic regulatory goals. Although products like pharmaceuticals and pesticides are subjected to mandatory licensing in all countries, Myanmar demands licensing of tyres as well. In order to export tyres to Myanmar the exporter needs to get registered with the Directorate of Trade. This registration allows the exporters to export their products freely to Myanmar. Similarly, the exports of isolators and valves are subject to licensing in Vietnam. This is undertaken as importers are allowed to import materials, equipment and machinery for the purpose of establishing their own production lines and producing goods in accordance with their investment licenses. The importers are not allowed to import goods for trading purposes. Prohibition: We could also find some cases where prohibition is a major non tariff measures taken by the domestic government to safeguard imports. Prohibition can be selective with respect to commodities and countries of origin/ destination, it includes embargoes and may carry legal sanctions. Prohibition is sometimes in the form of intrinsic specification of the products are considered to be unhygienic and ill- maintained which further aggravates the agony that Indian exporters are currently facing.

.Anti-dumping duties: Dumping is said to occur when the goods are exported by a country to another country at a price lower than its normal value. In our study there was no evidence of any anti-dumping cases. However, the Ministry of Commerce, Government of India, Annual Report indicates that Indonesia has initiated 6 cases against India in products such as ampicillian, black carbon, hot rolled coils, pthalic anhydride, ferro manganese and silicon manganese and wire rods. None of the other ASEAN countries or Sri Lanka has initiated any anti-dumping cases against India.

Summary and Policy Implications of NTBs
We can point out the non-tariff barriers that Indian exporters face while exporting to ASEAN and Sri Lanka. Using secondary data the study finds that the incidence of non-tariff measures imposed by ASEAN and Sri Lanka has increased during 1997-98 to 2002-03. In 1997-98 India’s exports to Indonesia, Singapore, Philippines, Thailand and Sri Lanka were not subjected to any kind of NTMs while only a small proportion of exports to Malaysia (6.6%) and Vietnam (3%), were subjected to NTMs. By 2002-03, there was an increase the proportion of exports subject to NTMs. Thus, in 2002-03, 9% of India’s exports to Singapore, 29% of exports to Indonesia, 37% of exports to Philippines, 32% of exports to Malaysia, 25% of exports to Thailand, 4% of exports to Vietnam and 0.5% of exports to Sri Lanka were subjected to NTMs. The study indicates that Indian exporters are facing some non-tariff barriers while exporting to ASEAN and to Sri Lanka. The study revealed that 32% of the firms indicated that they faced some kind of barrier. Further the study revealed that a larger proportion of smaller firms (exports less than Rs. 20 million) faced nontariff barriers than larger firms. The case studies give important indications for policy. The study points out that within ASEAN countries there are different standards. In some countries standards are very high and unreasonable e.g, aflotoxin level in peanuts in Singapore. Thus it makes it difficult for Indian exporters to target the ASEAN market as a region. Exporters have to comply with different standards in different markets, which have similar needs. Exporters have also pointed out that these higher product standards were not required for intra regional trade. It was also seen that importers made unreasonable demands for processes e.g., HACCP certification and own slaughterhouse. These kinds of barriers are set up without keeping in mind the domestic manufacturing practices in the exporting market. There are several domestic and technological constraints which need to be addressed at our end. Some of the companies do not have basic technology even for standardized products, and they perceive it as a nontariff barrier e.g., yarn. Also there is a multiplicity of standards within India. There are various organisations involved in standard setting and

implementation who lack co-ordination amongst themselves. Such conditions make it difficult for exporters to export a standardised product. There is also lack of information about foreign standards among Indian exporters, particularly on changing standards. Advance information on changing standards can equip exporters to meet standards. A plethora of other factors such as local taxes, domestic infrastructure, complex and lengthy procedures, inspector raj, etc., add to the cost of compliance of international standards making it difficult for Indian exporters.

Thus through the analysis we could know that even there is a production in Sugar commodity there is a deficiency in the demand which is met annually. Thus the trading happens Australia is the leading producer of sugar and India has lost its charm in the world market, trade happens at this scenario. India dose compensate in one type of sugar as the other classification it has the deficiencies thus 30%-45% of custom tariff is charged. Thus increase in demand and scarcity in the production of sugar there is a Price hike.


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• • Referred to World Economy- Trade and Finance - V. Yarbrough. The Economist. Article referred “Economic analysis of India Sugar Industry”. Article referred “Indian Sugar”.