Why NTM is a Challenge in Trade Relations? Evidence from India–Africa Agricultural Trade

Abstract

India and Africa have experienced the rapid expansion of bilateral trade during the last two decades. The India–Africa trade is understudied in general and in the agriculture sector. Very few considerable efforts have been made to study the agro-trade restrictions between both the economies. Therefore, the purpose of this paper is to empirically identify the recent evidence of non-tariff measures (NTMs) imposed on the agro-products between India and Africa, which also work as non-tariff barriers. It is perceived that India being one of the frequent users of NTMs in the world poses many challenges for its trading partners. Based on the Revealed Trade Barrier (RTB) index, using 28 agro-products (HS-4 digit level), this paper assesses bilateral agro-trade barriers. The frequency index ( Fi) and coverage ratio ( Cr) were used to analyse the complex nature of NTMs. The study findings show that both trading partners imposed a wide range of NTMs on each other’s agro-products, which resulted in the discriminatory effects on trade. Comparatively, India has imposed the lesser number of NTMs on Africa’s agro-products. Despite the recent bilateral trade agreements between both the economies, trade barriers were frequently noticed. The paper suggests applying strategic trade policies and reduction of NTMs along with harmonisation of standards to flourish the bilateral agro-trade.

Sustainable Production, Non-Tariff Measures, and Trade Performance in RCEP Countries

“…The increasing significance of NTMs as trade policy measures has attracted policymaker and researcher attention to NTM implementation and the impact on international trade flows [4,[12][13][14][15][16][17][18][19][20]. Most authors have focused on the impact of NTM liberalization through free trade agreements (FTAs), as NTMs are commonly assumed to distort trade [12,15,[31][32][33].…”

“…This possibility has motivated policymakers and researchers to seek to understand how NTMs affect trade performance [12,13]. A sizeable literature has been published on the impacts of NTMs on trade [4,[14][15][16][17][18][19][20]. Most research has tended to focus on the implications of NTMs in general, and hence, several current studies have shifted attention to NTMs with specific purposes: improving supply chains [21,22], enhancing quality [23,24], and increasing export competitiveness [25,26].…”