Barriers to international trade

Lack of information

Entrepreneurs should thoroughly research the possibility of going global and use every possible
resource available to them such as government and private organizations' international exporting
and marketing information, in order to make valid decisions. Companies must also be willing to
make the necessary adjustments to their product stand services, promotional campaigns,
packaging, and sales techniques in foreign markets.

Attitude of the entrepreneur

The first step to building an export program is recognizing that the opportunity to export exists.
Attitude of the entrepreneur is so important. He should not think, he is too small to export.

Political barrier

The political climate of a country plays a major impact on international trade. Political violence
may change the attitudes towards the foreign firms at any time. And this impact can create an
unfavorable atmosphere for international business.
Human resource barrier

One of the challenges that international businesses have to address is achieving a balancing act
on how they manage cultural diversity. Customs vary widely in international cultures, from the
ways men and women relate, to dress code, to the role of gender when recruiting and assigning
positions. In addition to cultural diversity, international businesses have to deal with language
barriers. The language barrier can be among employees, or between employees and the
management. Employee communications should refer to the local culture and contain analogues
that the locals can relate to. In order for a business to communicate to its overseas employees, it
must first understand what makes sense to them.

Cultural barrier

A nation’s cultural and social forces can restrict international business. Culture consists of a
country’s general concept and values and tangible items such as food, clothing, building etc.
Social forces include family, education, religion and custom. Selling products from one country
to another country is sometimes difficult when the culture of two countries differ significantly

Technical barrier

Indian companies, farmers, ranchers, and manufacturers increasingly encounter non- tariff trade
barriers in the form of product standards, testing requirements, and other technical requirements
as they seek to sell products and services around the world. As tariff barriers to industrial and
agricultural trade have fallen, standards-related measures of this kind have emerged as a key
concern. Governments, market participants, and other entities can use standards-related measures
as an effective and efficient means of achieving legitimate commercial and policy objectives. But
when standards-related measures are outdated, overly burdensome, discriminatory, or otherwise
inappropriate, these measures can reduce competition, stifle innovation, and create unnecessary
technical barriers to trade. These kinds of measures can pose a particular problem for small- and
medium-sized enterprises (SMEs), which often do not have the resources to address these
problems on their own. Significant foreign trade barriers in the form of product standards,
technical regulations and testing, certification, and other procedures are involved in determining
whether or not products conform to standards and technical regulations.

Non-tariff barrier

Nontariff barriers include quotas, regulations regarding product content or quality, and other
conditions that hinder imports. One of the most commonly used nontariff barriers are product
standards, which may aim to serve as “barriers to trade.” Other nontariff barriers include packing
and shipping regulations, harbor and airport permits, and onerous customs procedures, all of
which can have either legitimate or purely anti-import agendas, or both.
Tariff barrier

Tariffs are taxes or duties that a government imposes on goods and serves imported into that
country. In essence, tariffs raise the price of imported goods making them less attractive to
consumers, and serves to protect the makers of comparable domestic products and services. A
quota is a limit on the amount of a product imported into a country. Quotas help protect domestic
markets by limiting quantities of foreign products.

Lack of finance

Many entrepreneurs cite lack of financing as a major barrier to international trade. Before
embarking on an export program, entrepreneurs should have available financing lined up.

Lack of network

Due to long geographical distances between the nations, goods are either sent through rail, road
or sea or air. All these modes of transport are expensive and may face the dangers of sea or air
perils such as explosions or accidents etc. There may be a delay in the delivery of goods that may
lead to the spoilage of certain perishable goods. Distance creates higher transport costs as well as
more risks.