Module 4:

Understanding the Market Opportunities from Market Access MAP,

India Trade Portal and Service Trade restrictiveness Index Data
LEARNING OBJECTIVES:

• Brief introduction to Trade Barriers

• How to use Market Access Map database?
• How to use India Trade Portal database?
• How to use Service Trade Restrictiveness Index (STRI) database?
LEARNING MATERIAL:

4.1 Importance of Understanding Trade Barriers for Exporters

When one exporter tries to capture the international market, they need to first apply the
market identification tools as obtained under the Trade Map database. They can further
supplement their analysis with various competitiveness indices constructed by data
obtained from Trade Map. The next step however is the knowledge on possible trade
barriers prevailing in the target markets. As the tariff barriers are coming down, newer
forms of Non-Tariff barriers (NTBs) are emerging in the world. Apart from merchandise
products, the imports in service sectors are also subject to interventionist policies by home
countries. Hence knowledge on both tariff rates and NTBs in target markets are equally
important.

The trade barriers imposed by various trade partners can be accessed from several trade
databases maintained by multilateral bodies, which are noted in Table 4.1. Though Tarde
Map provides data on tariff, it is not the primary focus of that resource. Hence one instead
should use other databases which primarily provide data on the possible tariff barriers (e.g.,
Market Access Map), NTBs (e.g., WITS, Market Access Map, India Trade Portal) andrules of
origin (ROOs) compliance (e.g., Market Access Map, India Trade Portal).

Table 4.1: Trade Barrier related Databases

Database Application Source
Trade Map All countries trade data with partners and ITC (undated a)
average tariff
WITS All countries trade data with partners and World Bank
tariff (undated)
Market Access Map Tariff and NTB data applied by all countries ITC (undated b)
TAO Tariff data applied by all countries WTO (undated a)
WTO I-TIP Tariff data and other form of trade barriers WTO (undated b)
India Trade Portal Tariff, Rules of Origin, Government schemes GoI (undated)
etc. on exports in partner markets
Service Trade Barriers on Trade in Services OECD (undated)
Restrictiveness
Index (STRI)

The tariff data is sometimes checked at HS 6-digit level where the exporter’s and importer’s
codes can be matched. However, when we check the data for a particular importer, then
the tariff line level data for the country can be accessed (e.g., 10-digit for USA). In the
following the possible ways in which the resources can be used are briefly explained.

4.2 How to use Market Access Map database?

The Market Access Map database provides a detailed account of tariff rates imposed by
various countries on products of interest, tariff rates imposed by an importer on various
countries, various forms of non-tariff barriers (NTBs), contingency measures (e.g., anti-
dumping duty, countervailing duties and safeguard measures) etc. It can be a very crucial
resource for Indian exporters in understanding the possible trade barriers. The Market
Access Map User Guide can be downloaded from the webpage itself for knowing various
applications of this tool (ITC, undated b).

Suppose a producer of T-shirts, singlets and other vests of cotton, knitted or crocheted(HS
610910) wants to export the product and wants to understand what the tariff rates are
across countries. For that, one can go to the quick search menu and opt for Compare Tariff
option, in which India can be noted as exporter and the HS 6-digit product is accordingly
mentioned. The output gives the tariff rates across all the countries in tabular form as noted
in Table 4.2. The barriers are also shown with a colour code, analogous to the traffic signal.
A darker share, namely Red (greater than 50 percent), brown (40 to 50 percent) or orange
(30 to 40 percent) indicates high tariff barriers and hence possible obstructions to export.
Difference shades of yellow and green signify moderate and low tariff barriers respectively.

Table 4.2: Tariff Barriers across countries on Indian Export of T-shirts, singlets and other
vests of cotton, knitted or crocheted(HS 610910)

Source: Obtained from Market Access Map (ITC, undated b)

For a clearer pictorial view of the trade barriers across the globe, one can go for the Map
option in the earlier output. The result is summarized in Figure 4.1. The colour codes are
now applied on all the importing countries (i.e., for export of India for HS 610910) in the
world on a two-dimensional plane. Hence by looking at the colour, one can ascertain
whether the country is offering a high or low trade barrier on Indian exports. It can be noted
from the figure that Australia (5 percent) and Saudi Arabia (5 percent) are offering low tariff
barriers on Indian exports, while barriers in Canada (18 percent) and Peru (11 percent) are
moderate. The barriers are however quite high in Brazil (35 percent) and South Africa (45
percent). The bubbles on the countries indicate Indian exports to those directions, enabling
one to check whether the lower tariff barriers are getting translated into higher trade flows
from India. If trade value happens to be low despite low tariff, then either demand in the
country might be low or some standard-related NTBs might be imposed on Indian exports.
 Figure 4.1: Tariff Barriers across countries on Indian Export of T-shirts, singlets and other
vests of cotton, knitted or crocheted (HS 610910)

Source: Obtained from Market Access Map (ITC, undated b)

Suppose now one wants to check the tariff USA imposes on HS 610910 on various countries
exporting the product to its territories. For that, one can go to the quick search menu and
opt for Find Tariff option, in which USA can be noted as importer and the HS 6-digit product
is entered. The output gives the tariff rates imposed by USA on all the import source
countries as noted in Table 4.3 (for select countries). The cursor can be taken on any tariff
regime and the countries included therein will be shown. The full country-wise details can
also be obtained when the data is downloaded. India, which enjoys no regional trade
agreement (RTA) relationship with USA, is included under the MFN group (i.e., the tariff the
WTO members face in other member countries) in row one (16.5 percent). North Korea and
Cube face the non-MFN tariff (90 percent). Other RTA partners of USA face the preferential
tariff of 0 percent, which is the margin of preference against Indian exports in the USA
market, barring the exception of South Korea.

Table 4.3: USA Tariff on Import of T-shirts, singlets and other vests of cotton, knitted or
crocheted(HS 610910)
Tariff Regime Applied tariff (as reported) (%)
MFN duties (Applied) 16.50
Non-MFN tariff 90.00
Preferential tariff for AGOA countries eligible for treatment of 0.00
certain textiles and apparel
Preferential tariff for Australia 0.00
Preferential tariff for Bahrain 0.00
Preferential tariff for Chile 0.00
Preferential tariff for Jordan 0.00
Preferential tariff for Morocco 0.00
Preferential tariff for Singapore 0.00
Preferential tariff for the republic of Korea 4.90
Source: Obtained from Market Access Map (ITC, undated b)

A longer time series data for tariff applied on Indian exports can also be obtained from
Market Access Map (ITC, undated b) and TAO (WTO, undated a) databases.

Finally, one may attempt to find the NTBs on Indian exports of HS 610910 in the USA
market. For that, one can go to the quick search menu and opt for Find Non-Tariff Measures
option, in which USA can be noted as importer, India as the exporter and the HS 6-digit
product is typed. The output gives the NTBs imposed by USA on Indian exports as noted in
Table 4.4 (for select measures). It is seen that various forms of Sanitary and Phytosanitary
(SPS) and Technical Barriers to Trade (TBT) Measures are being imposed on Indian exports
by the USA. By clicking on the relevant links and documents, further details can be accessed.

Table 4.4: USA NTBs on Import of T-shirts, singlets and other vests of cotton, knitted or
crocheted(HS 610910)
Title and summary of the legislation Requirements specified in the
legislation
Title: Title 7 - Agriculture. Subtitle B - Regulations of the 1 requirement
Department of Agriculture (Continued). CHAPTER III - ANIMAL (Details +)
AND PLANT HEALTH INSPECTION SERVICE, DEPARTMENT OF
AGRICULTURE. PART 305—PHYTOSANITARY TREATMENTS. Cold/heat treatment - (SPS)
Fumigation - (SPS)
Summary: Heat treatment
Title: Title 16 - Commercial Practices; Part 1500 - 1 requirement
HAZARDOUS SUBSTANCES AND ARTICLES; (Details +)
ADMINISTRATION AND ENFORCEMENT REGULATIONS
Restricted use of certain
Summary: (a) Under the authority of section 2(q)(1)(B) of substances - (TBT)
the act, the Commission declares as banned hazardous
substances the following articles because they possess
such a degree or nature of hazard that adequate
cautionary labeling cannot be written and the publ
Title: Title 16 - Commercial Practices; Part 1107 - 1 requirement
TESTING AND LABELING PERTAINING TO PRODUCT (Details +)
CERTIFICATION
Testing requirement - (TBT)
Summary: (a) A manufacturer of a children's product Certification requirement -
subject to an applicable children's product safety rule (TBT)
must maintain the following records: (1) A copy of the Traceability information
Children's Product Certificate for each product. The requirements - (TBT)
children's product covered by the certif
Source: Obtained from Market Access Map (ITC, undated b)

4.3 How to use India Trade Portal database?

Suppose one exporter intends to check the tariff preference and ROOs in Japan on HS
610910, an RTA partner of India, as well as the Indian government’sdomestic and export
venture supporting framework in place. For this purpose, one needs to use theIndia Trade
Portal, where no registration is required. The data can be drawn in a five-stage process
through selection of appropriate menus. First, the HS 6-digit code may be typed in the query
box. Second, then appropriate the trade flow (export in this case) and the actual tariff line
product (at the HS 8-digit level for India) can be selected. Third, the partner country (Japan
in this example) has to be selected. Fourth, the actual corresponding tariff line product in
the partner country (HS 8-digit or 10-digit for the partner country, as the case might be) can
be identified (either by securing the code from the importer or from trade promotion
agencies / chamber of commerce, if a first time exporter and there are multiple tariff lines
among the available options) and accordingly selected. In the fifth and final step, the
outputs are obtained, which is shown in Figure 4.2.

Figure 4.2: Policy Space for Indian Export of T-shirts, singlets and other vests of cotton,
knitted or crocheted (HS 610910) to Japan

Source: Obtained from India Trade Portal (GoI, undated)

The output can be interpreted in the following manner. First, by clicking on Export Policy it is
seen that the product can be exported freely. Second, clicking on Duty Drawback the
drawback rates and cap, if any, are shown. Third, it is seen that available interest subvention
rate for the product is 3 percent. Fourth, GST rates on the product are 5 and 12 percent
respectively, depending on whether per unit sales value exceeds Rs. 1000 or not. Fifth,
clicking on SPS-TBT menu one can see all the technical measures that might be imposed on
the Indian export product. Sixth, clicking on MEIS it can be observed that the support for
exports under the Merchandise Export Promotion Scheme is 4 percent.
From the main body of the table it is further observed that the MFN tariff imposed by Japan
on all the non-RTA WTO members is 10.9 percent (that is tariff faced by all the WTO
member countries, who are not part of Japan’s RTA framework). However, as an RTA
partner, India enjoys a preferential tariff of 0 percent (margin of preference). For entering in
Japan with the duty preference, India however has to comply with the ROO provisions,
which can be obtained from the PDF document noted in the table. The document shows
that the domestic value content in Indian exports to Japan, for being eligible to tariff
preference, should not be less that 35 percent ad valoremand any importing materials from
third countries should have undergone a change in tariff classification at the sub-heading
(i.e., HS 6-digit level).

4.4 How to use Service Trade Restrictiveness Index database?

The STRI database has been prepared by Organisation for Economic Co-operation and
Development (OECD)for 19 sectors in 44 countries, including both OECD countries and
partner nations. The database can provide crucial information to service exporters if they
are eyeing a particular market for export of a particular sector. There are three interactive
tools, namely – compare your country, policy simulator and regulatory database which can
be used for this purpose. No registration is required for accessing the data.

The possible barriers within the 22 sectors are placed under five broad categories -
Restrictions on foreign entry, Restrictions to movement of people, Other discriminatory
measures, Barriers to competition and Regulatory transparency. 0 and 1 represent open and
restrictive trade regimes respectively.

Suppose, one exporter is trying to understand the stringency of barriers on engineering

services across major countries. Then the detailed sector notes available in the STRI web-
page can be accessed. The summary as given by OECD, can be observed from Figure 4.3.

In the figure, the five policy barriers are represented by different colour shades, as a result
of which the policy differences and the area of stringency can be clearly observed. The
average barrier in the world is shown by the thick black line, and the countries lying below
the same are relatively open to engineering service imports. It is observed from the figure
that the bars are quite small for countries like Japan and France, indicating lower trade
barriers prevailing there. Poland on the other hand is having a stringent engineering service
trade regime.

Also the STRI in a country during 2014 is shown with a pink dot, enabling the reader to have
a temporal understanding of the service trade barrier over time. For instance in case of
France the pink dot lies above the corresponding bar, implying that trade barrier in
engineering service has declined in the country over 2014 to 2017. On the other hand, for
Turkey, the trade barrier has actually increased over the same period.

From the colour code it is further seen that in Poland the trade barriers are primarily on
movement of people. In Spain on the other hand there is considerable scope for enhancing
regulatory transparency. In Slovak Republic, foreign entry is largely restricted along with
movement of people, making the country most restrictive in import of this service category.
 Figure 4.3: STRI by policy area - Engineering services (2017)

Source: Obtained from STRI Database (OECD, undated)

Finally, suppose an exporter in currently exporting engineering service to Brazil and intends
to enter in the Chinese market in long run. One may compare the engineering service
openness in two countries by going into the Policy Simulator menu. For obtaining the output
one first needs to select the sector and then the countries (Brazil and China is this case)
which are to be compared. The output is shown with help of Table 4.5.

Table 4.5: Comparison of STRI for Brazil and China in Engineering Service
Barrier Description Brazil China
Number of Values Number of Values
Measures Measures
1 Restrictions on foreign 5 0.059 8 0.094
entry
2 Restrictions to movement 7 0.113 4 0.064
of people
3 Other discriminatory 1 0.009 3 0.028
measures
4 Barriers to competition 1 0.009 2 0.019
5 Regulatory transparency 4 0.055 2 0.028
Total 0.246 0.234
Source: Obtained from STRI Database (OECD, undated)
The output suggests that engineering service trade barriers in China on the whole (0.234) is
lower than Brazil (0.246). However, in terms of Restrictions on foreign entry (0.094), Other
discriminatory measures(0.028) and Barriers to competition(0.019) Chinese regulatory
barriers on imports of engineering servicesare more stringent than the corresponding
Brazilian measures. To know about the detailed barriers in Brazil / China, one can either go
to the regulatory database or can click on the number of measures indicated in the table.
Then the exact restrictive provisions on engineering services in the country of interest would
be shown in details.

Suggested Reading:

Government of India (undated). India Trade Portal. Available at:

http://www.indiantradeportal.in.
International Trade Centre. (undated a). Trade Map database. Available at:
http://www.trademap.org/Index.aspx.
International Trade Centre. (undated b). Market Access Map database. Available at:
http://www.macmap.org/.
Organisation for Economic Co-operation and Development (undated). Service Trade
Restrictiveness Index. Available at: http://www.oecd.org/tad/services-trade/services-
trade-restrictiveness-index.htm
World Bank. (undated b). World Integrated Trade Solution (WITS). Available
at:http://wits.worldbank.org/.
World Trade Organization (undated a). Tariff Analysis Online (TAO) database. Available at:
https://tao.wto.org/welcome.aspx?ReturnUrl=%2f.
World Trade Organization (undatedb). WTO Integrated Trade Intelligence Portal (WTO I-TIP)
database. Available at: https://www.wto.org/english/res_e/statis_e/itip_e.htm.
Learning Outcomes: Application of Knowledge

Case-Let 1: Mr. Duttis a major trader of Articles of apparel, of leather or composition leather
(excluding clothing accessories, footware)(HS 420310). He decides to export the product to
key European markets like Germany, Spain and Italy. How stringent are the tariff and Non-
Tariff barriers in these markets? Explain the obtained results.

Case-Let 2: Mr. Kapuris a major producer of Parts and accessories of motorcycles, incl.
mopeds, n.e.s (HS 871410). He decides to export the product to appropriate markets in the
globe. How can he identify the markets for this purpose and check the government export
schemes in place for them? Explain the obtained results.

Case-Let 3: Mr. Singhis an exporter of computer services and has decided to export to USA.
Before entering the market, he wants to understand what the barriers in USA on computer
service imports are. How can such an analysis be conducted? Explain the obtained results.
Review of Learning Outcomes:

1. One knows how the Market Access Map database can be used for identifying the
countries with low tariff and non-tariff barriers.

2. One knows how the India Trade Portal database can be used for understanding the tariff
barriers, government export promotion schemes and rules of origin provisions for
compliance in a regional trade agreement partner country.

3. One knows how the Service Trade Restrictiveness Index (STRI) database can be used for
knowing the possible forms of procedural, regulatory or other forms of barriers on a
particular service trade in a target market.