India Urges Russia to Address Non-Tariff Barriers to Boost Trade

India Urges Russia to Address Non-Tariff Barriers to Boost Trade

Sub: Economy

Sec: External Sector

• India’s Request:
  • India is urging Russia to address non-tariff barriers (NTBs) in sectors such as marine products and pharmaceuticals.
  • The aim is to boost Indian exports and reduce the trade imbalance between the two countries.
• Bilateral Trade Target:
  • Target: Achieve bilateral annual trade of $100 billion by 2030.
  • Current Trade: About $65 billion in 2023-24.
• Leadership Commitment:
  • The trade target was set by PM Narendra Modi and Russian President Vladimir Putin at a recent summit in Moscow.
  • Both leaders agreed to work on increasing Indian exports to reduce the trade deficit.
• Commerce Secretary highlighted the focus on different sectors and the need for Russia to look into NTBs and mentioned plans for another trade delegation visit to Russia to discuss better market access.

Focus Areas for Increased Market Access

• Engineering Products
• Electronics

Impact of Economic Sanctions on Russia

• Following Western sanctions on Russia after its attack on Ukraine in February 2022, India’s imports of discounted crude oil from Moscow have increased significantly.
  • Imports from Russia (2023-24): $61 billion.
  • India’s Exports to Russia (2023-24): Approximately $4 billion.

Conclusion

India is pushing for Russia to address non-tariff barriers to help boost its exports and achieve the ambitious bilateral trade target of $100 billion by 2030. Increased market access for Indian products, particularly in sectors like engineering and electronics, is crucial for reducing the trade deficit and enhancing economic cooperation between the two nations.

Non-Tariff Barriers (NTBs)

Non-Tariff Barriers (NTBs) are restrictions that countries use to control the amount of trade across their borders, which are not in the form of a tariff. These barriers can be in the form of regulations, standards, testing, certification, and other requirements that products must meet before they are allowed to enter a country or be sold.

Types of Non-Tariff Barriers

• Import Quotas:
  • Limits on the quantity of goods that can be imported.
  • Example: A country may limit the import of a specific agricultural product to protect domestic farmers.
• Subsidies:
  • Financial support from the government to local businesses.
  • Example: Subsidies for local farmers reduce their costs, making them more competitive than imported products.
• Standards and Regulations:
  • Requirements related to product quality, safety, and health standards.
  • Example: Stringent health standards for food products that foreign suppliers must meet.
• Customs Procedures:
  • Complex and lengthy customs procedures can act as barriers.
  • Example: Extensive documentation and slow processing times for imports.
• Licenses:
  • Requirements for importers to obtain licenses before importing goods.
  • Example: Import licensing for pharmaceuticals to ensure quality control.
• Voluntary Export Restraints (VERs):
  • Self-imposed export limits by exporting countries.
  • Example: A country voluntarily limiting its export of steel to another country.
• Embargoes:
  • Official bans on trade with specific countries or products.
  • Example: Trade embargoes imposed on countries due to political reasons.
• Sanitary and Phytosanitary Measures:
  • Measures to protect humans, animals, and plants from diseases, pests, or contaminants.
  • Example: Restrictions on imports of livestock due to disease outbreaks.
• Anti-Dumping Measures:
  • Actions taken to protect domestic industries from foreign companies dumping products at below-market prices.
  • Example: Imposing duties on imported steel sold at unfairly low prices.
• Technical Barriers to Trade (TBT):
  • Regulations, standards, testing, and certification procedures.
  • Example: Specific packaging requirements for imported goods.

Impact on Trade

• Increased Costs:
  • Compliance with NTBs can increase the cost of goods for exporters.
• Reduced Competitiveness:
  • NTBs can make foreign products less competitive compared to domestic products.
• Market Access:
  • NTBs can restrict or limit market access for foreign suppliers.