Non-Tariff Barriers (NTBs)
Indian Economy
- PYQs8
- Articles1
Background
Understanding NTBs is crucial for analyzing global trade dynamics, the effectiveness of trade agreements, India's trade policy challenges, and the evolving nature of protectionism in the 21st century. It directly impacts India's export competitiveness and import regulations.
Non-tariff barriers (NTBs) are policy instruments other than tariffs that restrict trade. They include a wide range of regulations, certifications, licensing rules, product requirements, technical standards, environmental rules, health and safety requirements, and testing procedures that goods must meet before entering a market.
Facts & tables
- Global Trend
- Post-WTO (1995), average tariff rates declined, but NTBs surged, now affecting around 90% of global trade.
- Nature
- NTBs are less transparent and harder to measure than tariffs, operating within complex regulatory systems.
- Deployment
- Major economies (EU, US, India) deploy NTBs differently, often for protectionism, strategic competition, or industrial strategy.
- Impact on FTAs
- NTBs significantly undermine the effectiveness and utilization rates of Free Trade Agreements (FTAs).
| Type | Reference |
|---|---|
| Conceptual area | International Trade |
| Conceptual area | Protectionism |
| Conceptual area | Trade Policy |
| Body | Role |
|---|---|
| World Trade Organization (WTO) | Monitors and facilitates reduction of trade barriers, receives notifications of ntbs |
Prelims angle
Prelims angle: Multi-statement analysis
Prelims angle: Conceptual understanding
- NTBs are non-tariff measures restricting trade (regulations, standards, licensing).
- Surged post-WTO as tariffs declined, now affecting ~90% of global trade.
- Less transparent, higher compliance costs, especially for SMEs.
- Undermine FTA effectiveness (e.g., India's low utilization rates).
- New FTAs (UAE CEPA, India-EFTA TEPA) focus on mutual recognition to address NTBs.
| Year | Framing tags |
|---|---|
| 2026 | Cause and effect relationships, Multi-statement analysis |
| 2023 | Multi-statement analysis, Factual recall |
| 2021 | Multi-statement analysis, Conceptual understanding |
| 2020 | Multi-statement analysis, Conceptual understanding |
| 2017 | Factual recall, Terminology-based question |
| 2017 | Multi-statement analysis, Factual recall |
| 2017 | Definition-based questions, Policy measures |
| 2016 | Statement-based questions, Factual recall |
Timeline
-
International Trade
Conceptual area
-
Protectionism
Conceptual area
-
Trade Policy
Conceptual area
-
Prelims 2016
Statement-based questions, Factual recall
-
Prelims 2017
Factual recall, Terminology-based question
-
Prelims 2017
Multi-statement analysis, Factual recall
-
Prelims 2017
Definition-based questions, Policy measures
-
Prelims 2020
Multi-statement analysis, Conceptual understanding
-
Prelims 2021
Multi-statement analysis, Conceptual understanding
-
Prelims 2023
Multi-statement analysis, Factual recall
-
Prelims 2026
Cause and effect relationships, Multi-statement analysis
-
The real barriers to trade are no longer tariffs
Non-Tariff Barriers (NTBs) have replaced tariffs as the primary obstacles to international trade, encompassing diverse regulatory and technical requirements. They significantly impact market access and FTA utilization, necessitating new approaches in trade negotiations and policy.
See also
Past papers
2016–2026 · 7 questions
In the news
The real barriers to trade are no longer tariffs
Non-Tariff Barriers (NTBs) have replaced tariffs as the primary obstacles to international trade, encompassing diverse regulatory and technical requirements. They significantly impact market access and FTA utilization, necessitating new approaches in trade negotiations and policy.
Try these PYQs
With reference to the Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?
1. Quantitative restrictions on imports by foreign investors are prohibited.
2. They apply to investment measures related to trade in both goods and services.
3. They are not concerned with the regulation of foreign investments.
Select the correct answer using the code given below:
Statement 1 is correct: The Trade-Related Investment Measures (TRIMS) agreement under the World Trade Organization (WTO) prohibits quantitative restrictions on imports by foreign investors. This means that countries cannot impose conditions like mandatory local sourcing or trade-balancing requirements that distort free trade. Statement 2 is incorrect: TRIMS only applies to trade in goods, not services. The regulation of trade in services falls under the General Agreement on Trade in Services (GATS), not TRIMS. Statement 3 is correct: TRIMS is not directly concerned with the regulation of foreign investments. Instead, it focuses on investment measures that affect trade in goods, ensuring that they do not create barriers to international trade. Hence, option C is the correct answer.
Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above is/are correct?
The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency. Statement 1 is correct. India has ratified the Trade Facilitation Agreement (TFA) of the WTO. This signifies India's official acceptance and implementation of the agreement's provisions. Statement 2 is correct. The TFA is indeed a part of the WTO's Bali Ministerial Package of 2013. This package refers to a collection of agreements reached during the Ninth Ministerial Conference of the World Trade Organization in Bali, Indonesia. The TFA was a landmark achievement within this package. Statement 3 is incorrect. The Trade Facilitation Agreement (TFA) came into force in February 2017, not January 2016. It required ratification by two-thirds of WTO members before taking effect.
Consider the following statements:
The effect of devaluation of a currency is that it necessarily:-
1. improves the competitiveness of the domestic exports in the foreign markets.
2. increases the foreign value of domestic currency.
3. improves the trade balance.
Which of the above statements is/are correct?
Statement 1 is correct. When a country devalues its currency, it becomes cheaper for foreign buyers to purchase the country's exports. This can lead to increased demand for exports, making domestic producers more competitive in the international market. Statement 2 is incorrect. Devaluation actually decreases the foreign value of the domestic currency. The whole point is to make the domestic currency less expensive relative to foreign currencies. Statement 3 is also incorrect. While improved export competitiveness can lead to a better trade balance (more exports, fewer imports), it's not a guaranteed outcome. Other factors like import prices, global demand, and domestic production costs can also influence the trade balance. Devaluation can also lead to increased import costs if the country relies on imported raw materials. Therefore, the correct code is 1 only.
Broad-based Trade and Investment Agreement (BTIA)’ is sometimes seen in the news in the context of negotiations held between India and
The Broad-based Trade and Investment Agreement (BTIA) is negotiated between India and the European Union (EU).
Which of the following is/are the most significant implication(s) of obtaining Oeko-Tex certification for Eri Silk in the global textile industry?
1. It allows Indian exporters to compete in high-end markets that prioritise chemical-free products.
2. It confirms that Eri Silk meets international safety, environmental, and quality standards, enabling its entry into premium eco-conscious markets.
Select the answer using the code given below:
Statement 1 is Correct: The OEKO-TEX certification ensures that textiles are rigorously tested and proven free from harmful substances, heavy metals, and toxic chemicals. This certification acts as a major endorsement, directly enhancing the global marketability of Eri Silk and allowing Indian exporters to confidently compete in high-end international markets that prioritize sustainable, chemical-free, and ethically produced textiles. Statement 2 is Correct: The certification confirms that a textile meets strict international safety, environmental, and human health standards. This is highly valued by buyers in premium, eco-conscious global markets, particularly in Europe and North America. Combined with its Geographical Indication (GI) status and reputation as a cruelty-free "peace silk," the certification cements Eri Silk's position as a premium eco-friendly fabric, enabling its entry into these premium markets. Therefore, both statements are correct, making the correct option C.
Show 3 more PYQs
With reference to the International Monetary and Financial Committee (IMFC), consider the following statements:
1. IMFC discusses matters of concern affecting the global economy and advises the International Monetary Fund (IMF) on the direction of its work.
2. The World Bank participates as an observer in IMFC’s meetings.
Which of the statements given above is/are correct?
Statement 1 is Correct: The International Monetary and Financial Committee (IMFC) serves as a vital forum for discussing global economic issues and providing guidance to the International Monetary Fund (IMF). It brings together finance ministers, central bank governors, and other high-level officials from member countries to discuss challenges and opportunities facing the global economy. They also advise the IMF on its policy direction and work program. Statement 2 is Correct: The World Bank, while a separate institution, collaborates closely with the IMF. While not a formal member of the IMFC, the World Bank typically participates as an observer in IMFC meetings. This allows for better coordination and exchange of information between the two institutions on matters of mutual interest, such as global economic stability and development. Hence, option C is the correct answer.
The term ‘Digital Single Market Strategy’ seen in the news refers to -
The Digital Single Market Strategy refers to an initiative by the European Union (EU) that aims to create a unified digital market across all member states. Overall, the Digital Single Market Strategy aims to stimulate growth in the European digital economy by fostering innovation, competition, and consumer confidence in the online marketplace.
Consider the following statements :
Statement-I : India accounts for 3.2% of global export of goods.
Statement-II :Many local companies and some foreign companies operating in India have taken advantage of India's 'Production-linked Incentive' scheme.
Which one of the following is correct in respect of the above statements?
* Statement I is incorrect: India's share in global merchandise trade is only 1.8% and 4% in global services. India plans to increase its export share in global trade from 2.1% to 3% by 2027 and 10% by 2047. * Statement II is correct: The PLI scheme is open to both domestic and international manufacturers. Samsung as well as Indian firms such as Dixon Technologies, UTL, Neolyncs, Lava International, Optiemus Electronics and Micromax are also expanding their factories to take advantage of the PLI scheme.