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Post-SAFTA NTMs
for Agricultural Trade:
Revelations from the
India–South Asia
Approach
Chandan Kumar1 and Nalin Bharti1
Abstract
Commitment of South Asian Free Trade Agreement (SAFTA) from South Asian
Preferential Trading Agreement (SAPTA) for trade liberalisation was one of the
hopes in South Asia. This article highlights untapped trade potential in agro-trade
between India and its trading partners in South Asia through Trade Potential Index
(TPI). This article evaluates post-SAFTA effects of non-tariff measures (NTMs) on
agro-products (HS 6-digit level) over the period 2004–2016. After 2004, many
agro-products of South Asia have suffered trade restrictions which create chal-
lenges over SAFTA implementation. This article inquires whether NTMs in post-
SAFTA has been trade creating or trade inhibiting in agro-trade for member
countries as per the earlier commitments. Research methodology for this study
includes qualitative and quantitative approach. Qualitative approach examines
agri-trade constraints faced between India and rest seven South Asian countries
and vice versa. Quantitative analysis explores prevailing trade barriers in selected
agro-products during 2002–2016 applying Regional Trade Barrier Index and NTM
Coverage Ratio. Results establish the presence of agri-trade barriers from South
Asian countries against India as well as India’s barriers against rest seven coun-
tries of South Asia. Study concludes that agri-trade restrictions prevail in South
Asia despite SAFTA which shows the slow process of trade liberalisation.
JEL Codes: F13, F14, Q17
Article
1 Department of Humanities & Social Sciences, Indian Institute of Technology Patna, Amhara, Bihta,
Patna, India.
Corresponding author:
Nalin Bharti, Department of Humanities & Social Sciences, Indian Institute of Technology Patna,
Amhara, Bihta, Patna 801103, India.
E-mails: nalinbharti@gmail.com; nalinbharti@iitp.ac.in
Foreign Trade Review
56(1) 117–135, 2021
© 2020 Indian Institute of
Foreign Trade
Reprints and permissions:
in.sagepub.com/journals-permissions-india
DOI: 10.1177/0015732520961309
journals.sagepub.com/home/ftr
118 Foreign Trade Review 56(1)
Keywords
Non-tariff measures, trade potential, South Asia, RTB index
Introduction
International trade has been affected by protectionism today (Murray, 1990).
Agriculture and food products have experienced widening and deepening of mar-
ket ties in the post-globalised world. Agriculture has become an emerging sector
with many challenges under the regime of World Trade Organization (WTO)
where non-tariff measures (NTMs) are constituent components in the construc-
tion, coordination and regulation of trade policies. NTMs are policy measures
other can ordinary custom tariffs that can potentially have an economic effect on
international trade in goods, or prices or both (UNCTAD, 2012). NTMs are hetero-
geneous policy tools prominently linked to international trade and used as alterna-
tives of tariffs to restrict trade (Deardorff, 1987; Fugazza, 2013). It has made
international trade costly in spite of presence of regulations favouring consumers,
environment and economy (Stiglitz, 2014). It distorts trade flows through various
channels (Chakraborty et al., 2019). NTMs reduce the export volumes and
decrease the gains from international trade (Jordaan, 2017).
South Asian countries have attracted the attention of policy makers due to sub-
stantial trade reforms (Pangariya, 1999). Forming South Asian Association for
Regional Cooperation and Agreement (SAARC) and South Asian Free Trade
Agreement (SAFTA) has considerably helped South Asia to improve trade connec-
tivity amongst selected trading partners to some extent. South Asia is regarded as
one of the least economically integrated regions in the world. South Asian
Preferential Trading Agreement (SAPTA) was adopted in 1995. Inefficiency of
SAPTA led to the formation of SAFTA in 2004 for trade generating capacities.
SAFTA came into effect on 1 January 2006, where member countries agreed to
reduce sensitive product list by different margins. The agreement aims to promote
trade and investment; reduce trade barriers and increase economic integration.
Article 6 of the agreement relates to tariffs, para-tariffs and NTMs. Article 8 relates
to harmonise standards and develop lab testing and certifications. There remains a
question that to what extent SAFTA has been trade creating or trade inhibiting. In
reality, despite this agreement in post-SAFTA, trade restrictions have prevailed.
In spite of large focus on NTMs, South Asian countries still prefer to import
agro-products from distant countries instead of availability of agro-products in
neighbouring countries. This is a serious concern as it leads to high prices for con-
sumers. Raihan et al. (2014) contended that NTMs are invisible barriers in South
Asia which acts as major constraints and affects trade liberalisation policies. Batra
(2007) opined that India has a more sustained growth amongst all the countries in
South Asia. Kelegama (2007) inquired that removal of trade impediments would
lead to more intra-regional trade in South Asia and high growth rate of India would
create spillovers for different regions of South Asia. In an interesting study, Mukherji
(2002) presented non-tariff barriers (NTBs) faced by selected South Asian countries
for the year 2007 and calculated the bilateral potential trade.
Kumar and Bharti 119
Against this background, this article shows the post-SAFTA agri-trade restric-
tions in specific agro-products, that is, Harmonised System (HS) six-digit classi-
fication. This study adds to the literature by examining two central questions.
First, what are post-SAFTA agri-trade restrictions between India and selected
members of South Asia and secondly what trade potential lies ahead of NTMs in
agri-trade.
Methodology
Qualitative approach of the study analyses South Asia’s agri-trade restrictions.
This study referred and compiled all the government imposed cases and disputes
of NTMs in agri-trade between India and rest seven trading partners in South Asia
through exploring different sources like the UNCTAD TRAINS NTMs database,
International Trade Centre (ITC) and WTO. Quantitative approach calculates
Revealed Trade Barrier (RTB) Index between India and SAARC countries and
vice versa to inquire trade barriers in intra-regional trade in South Asia. For this,
28 agro-products of HS six-digit level were calculated over the period 2002–2016.
Product details are illustrated in Appendix 1. Further, coverage ratio (CR) and TPI
were also calculated for 17 agro-products for India and its trading partners.
CR measures value of trade affected by NTMs for a particular product. At the
country level, it is proportion of value of imports affected by NTMs for a country.
It is also known as Country Based CR (CBCR) and is calculated for both import-
ing as well as exporting country. For importing country like India, it shows pro-
portion of a particular South Asian country’s imports that are affected by NTMs
notified by the importing country, that is, India. For an exporting county, that is,
any South Asian country it shows the proportion of a country’s exports that face
NTMs in an importing country. Its formula is:
CBCR( )/()100DV V
ikkk
R= (1)
where Dk is a dummy variable equal to 1 if an NTM is applied to item k or else 0.
Vk is value of imports of product k for importing country i.
TPI identifies products of high trade complementarities between exports of a
country and imports of the partner country. It is obtained by matching total export
supply of a particular product of a country i with the import demand for that prod-
uct of a trading partner. Products with high TPI are regarded important for bilat-
eral trade between two given trading partners and show high trade expansion. It is
estimated using the formula
[(,) ]minTPIimumIEGMBE=-
(2)
where
IE is value of India’s total export of a particular product,
GM is value of South Asia’s total import of particular product,
BE is value of bilateral exports of a particular product from India to South
Asia.
120 Foreign Trade Review 56(1)
RTB index shows to what degree a commodity’s share of imports in import basket
from a country is larger or smaller than the share of total imports of that commod-
ity in partner country’s total import baskets (summed over all products). In other
words, it shows whether imports of a particular commodity from a country is rela-
tively more or less important compared to partner country’s total imports from all
sources of that commodity. Its formula is:
[( /)(/ )]RTBMMMM
ik
j
ik
j
kik
j
iik
j
ik ik
j
'RRRR=
(3)
where
Mj
ik is value of country j’s import from country i of product k,
∑k Mj
ik is value of country j’s total import of all the product from country i,
∑i Mj
ik is value of country j’s import of product k from all the countries,
∑i ∑k Mj
ik is value of country j total imports.
If the ratio is <1, it is concluded that India is exporting a commodity relatively
more to the rest of the world than to any South Asian countries possibly due to
trade barriers in South Asia and vice versa.
Findings and Results
Table 1 provides description of how selected SAARC countries have used different
types of NTMs over India’s 23 selected agro-products of (HS 2-digit level) over the
period 1 January 2002 to 31 December 2016. Data for Bangladesh, Bhutan and
Maldives were unavailable. Nepal has initiated and applied most NTMs over India’s
agro-products. Nepal initiated 237 measures which included 113 Sanitary and Phyto
sanitary (SPS) and 91 Technical Barriers to Trade (TBT) measures during the same
period. This shows growing complexity in agri-trade between both the trading part-
ners. After Nepal, Sri Lanka and Pakistan have initiated total 86 and 81 measures
respectively. Sri Lanka has mostly used SPS measures. Pakistan has mostly used
export related measures for India amongst SAARC countries.
Table 2 presents the picture of how India has initiated different NTMs over rest
seven SAARC country’s agro-products. Data was unavailable for Afghanistan
and Bhutan. India has used total 199 measures which are mostly dominated by
contingent trade protective measures followed by SPS measures. Number of
measures imposed was applicable for all members of South Asia. India has also
widely used export related measures.
How South Asian Countries Restrict India’s Agro-Products?
A notable implementation of NTMs can be seen where rest seven South Asian
Economies (SAEs) imposed NTMs on India’s agro-products. Table 3 highlights
that SAEs have actively imposed NTMs on India’s agro-products which are
dominated by Pakistan and Nepal. Regular amendments in food safety norms and
Table 1. Details of NTMs Applied by SAARC Countries over India’s Agro-Products (2002–2016 in No.)
Country SPS TBT
Quantity Control
Measures
Price Control
Measures
Other
Measures
Pre-Shipment
Inspection
Export
Measures Total
Afghanistan 2 25 35 1 1 – 10 74
Nepal 113 91 2 19 5 – 7 237
Pakistan 10 26 14 – 1 6 24 81
Sri Lanka 36 33 – 3 – 1 13 86
Total 161 175 51 23 7 7 54 424
Source: UNCTAD (2018).
Table 2. Details of NTMs Applied by India Over all SAARC Trading Partner’s Agro-Products (2002–2016 in No.)
Country SPS TBT
Quantity Control
Measures
Price Control
Measures
Other
Measures
Pre-Shipment
Inspection
Export-Related
Measures
Contingent Trade Protective
Measures
India 44 20 28 2 5 – 33 67
Source: UNCTAD (2018).
122 Foreign Trade Review 56(1)
Table 3. South Asia’s NTMs on India’s Agro-Products
Country Products under NTMs
Bangladesh Bangladesh had banned and restricted India’s products like poultry and
other products, juices, spices, tobacco, rice, fish, wines and alcoholic items,
etc., on the ground of inefficient radioactive tests. Many products were
also restricted at different ports. Bangladesh had put a one month ban on
India’s raw jutes in November 2015.
Bhutan In 2016, Bhutan had banned India’s agro-products like cauliflowers, green
chillies, beans, etc., due to the presence of high pesticides. These products
were imported from state West Bengal and were infected with high
pesticides content.
Nepal On 1 January 2010, Nepal used price control measures and imposed 5 per
cent agricultural reform tax on India’s products like live plants and animals,
natural honey, edible fruits, soya bean, ground nut, cotton seeds, oil cakes,
mangoes, apples, pears, cereals, tea, coffee, spices, etc. On 15 March 2012,
Nepal notified that for all imports from India, a form named ARE 1 must
be included.
Pakistan On 1 January 1967, Pakistan imposed SPS measures and made rules for
imports of plant and plant material (HS060220) from India. On 1 March
2013, Pakistan used pre-shipment inspection and introduced Import
Policy Order, 2013 and made new procedural requirements for imports
of live bovine animals (HS010290), fresh or chilled potatoes (HS070190),
pineapples (HS080430), etc., from India.
On 1 July 2014, Pakistan used SPS measures and made amendments
in Import Policy Order due to infections by bovine spongiform
encephalopathy (BSE) in products like fresh or chilled edible oil of bovine
animals (HS020610).
Source: WTO (2019) and UNCTAD TRAINS NTMs Database 2018.
regulations of rest SAEs countries affects agri-trade negatively. Setting high
standards in food products has deteriorated the pattern of trade for many India’s
agro-products.
How India Restricts South Asian Countries Agro-Products?
NTMs have emerged as one of the reactionary tools in South Asia. Like other
South Asian partners, India has also retaliated and imposed many NTMs against
rest seven trading partners of South Asia. Since, India is the largest country in
South Asia with huge population and diversified agriculture, it applies different
kinds of NTMs to promote her own exports and restrict other countries imports.
Table 4 depicts how India has imposed many NTMs on agro-products of its part-
ners in South Asia.
Figure 1 shows the most affected agro-products which India faces in trade with
South Asia for year 2011. Product ‘grains of oats’ and milk and milk products
faced high NTMs. Figure 2 shows CR of Nepal with India for 2011. Many
Table 4. India’s NTMs on South Asia’s Agro-Products
Country Products Under NTMs
For all SAARC
countries
On 1 January 2004, India imposed SPS measures and required post-entry quarantine growing for 45 days for snowflake (HS060110).
During the same period, India notified all SAARC countries that a permission was required from the Department of Agriculture and
Cooperation for import of flax (seeds for sowing) (HS12040010). Weed seeds or pests should not be present in freesia (HS060110),
watermelon (seeds for sowing) HS12077010), etc. Crop inspection must be done for carnation seeds (HS060312).
Afghanistan On 1 January 2004, India notified that apple (HS080810) must be free from raspberry beetle pest. India made post-entry quarantine
period for 45 days for neorogelia (HS06029020). Weed seeds should not be present in aster (HS120930).
Bangladesh On 1 January 2004, India notified that finger millet (HS10082130) and okra sees for sowing (HS12099190) should be free from
quarantine weed seeds. India made requirement of Registration Certificates (RCs) necessary from Bangladesh importers from 1 July
2013. India also requires certificates for technical and health standards for few agro-products which are costly for Bangladesh. Major
agro-products affected were fruit juices, processed foods, wheat and wheat products, non-basmati rice and fishes, etc.
Bhutan On 1 January 2004, India notified Bhutan that pest should not be present in ginger (HS09101110). Post-quarantine growing was
2–3 months for ginger. India had rejected Bhutan’s fruit juice imports as India does not accept the certification process done
by Bhutan Agriculture and Food Regulatory Authority (BAFRA). India wanted Bhutan to prepare a certificate from the Kolkata
laboratory. Thus, a requirement of Mutual Recognition Certificate (MRC) from the BAFRA became a problem in trade.
Nepal India imposed many SPS measures on Nepal’s agro-products. On 1 January 2004, India notified post-entry quarantine for 45 days for
yew (plants for propagation) (HS06022090) and 60 days for Swertia (HS06029090). Post-quarantine growing was 2 to 3 months for
ginger (HS09101110) and 6–9 months for vanilla (HS060210). India made approval necessary from Department of Agriculture and
Cooperation for imports of castor seeds (HS12099190). India notified that weed seeds should not be present in radish finger millet
(HS10082130) and required mango (HS08045020) to be fumigated with methyl bromide (MB).
India banned tea imports from Nepal during March 2016 to May 2016 due to the presence of animal quarantine. It also made
quality test certificates necessary for tea imports. India also imposed quantitative restrictions on Nepal’s vegetable ghee. Nepal
suffers from lack of standardised tests and certification process which is done by their domestic laboratories. There is also no
Mutual Recognition Agreement (MRA) between India and Nepal. Indian organisation ‘Bureau of Indian Standards’ (BIS) does not give
accreditation to the tests done by Nepal Bureau of Standards and Metrology (NBSM) and Department of Food Technology
and Quality Control (DFTQC) of Nepal. Samples are firstly sent to select India’s cities for certification which takes long time and
creates burden for exporters. Nepal’s agro-products also face strict quarantine inspection fee and checks at the border posts of India.
(Table 4 continued)
Country Products Under NTMs
Pakistan Pakistan faces various NTMs by India in the form of labelling, packaging and stringent custom documentations. On 1 January 2004,
India used pre-shipment inspection and made rules for import of potato (HS070190) from Pakistan. During the same period, India
notified that sesamum (HS12074090), should be free from weed seeds.
India imposed strict regulations in the form of Textile Consumer Protection Regulation, 1988 which restricted Pakistan’s textile
exports. This regulation included measures like producer identification, production composition, colour, size, letters and signs.
Sri Lanka India imposed many NTMs on Sri Lanka’s fruits and vegetables due to low standards and technical regulations. On 1 January 2004,
India imposed SPS measures and required asparagus (HS070920) and rambutan ((HS060210) to be fumigated with MB and pest free.
During the same period, it notified that an approval was required from Department of Agriculture and Cooperation for import of
sugar apple (HS060210) and macadamia nuts (HS060210), etc. Post-entry quarantine was 45 days except for research for macadamia
nuts (HS060210). Weeds should not be present in asparagus (HS070920), etc. Lotus (seeds for consumption) (HS12129990) should
be free from tomato ring spot virus.
India had put a quota restriction on Sri Lanka’s pepper imports because large amount of imported pepper had led to fluctuations
in the domestic pepper prices. India had also imposed quotas on Sri Lanka’s vegetable oil imports in 2006.
Source: UNCTAD TRAINS NTMs Database 2018.
(Table 4 continued)
Figure 1. CR of India as Exporting Country to South Asia 2011
Source: Authors’ calculation based on UNCTAD and ITC database.
Figure 2. CR of Nepal as Exporting Country to India 2011
Source: Authors’ calculation based on UNCTAD and ITC database.
Figure 3. CR of Pakistan as Exporting Country to India 2013
Source: Authors’ calculation based on UNCTAD and ITC database.
Figure 4. CR of Sri Lanka as Exporting Country to India 2011
Source: Authors Calculation based on UNCTAD and ITC database.
Kumar and Bharti 129
agro-products of Nepal faced NTMs in India which is dominated by maize, pickle,
tomato juice, mixed fruit juices, turmeric and ginger. Figure 3 shows CR of
Pakistan with India for 2013. Figure 4 shows that compared to other SAARC
countries, CR of Sri Lanka with India was very less for 2011. It was observed that
very few products faced NTMs in bilateral trade between India and Sri Lanka like
for example sesamum seeds.
Table 5 shows RTB index for South Asia’s agro-exports to India during 2002–
2016. Mixed results were obtained, that is, zero and one for many agro-products.
Products such as selected live animals and fruits, wheat, rice, maize, etc., have
obtained zero. This shows that SAEs exported these commodities relatively more to
the rest of the world than to India due to trade barriers in India. Live animals are
hardly exported to India. India is itself self-sufficient in the production of livestock.
Fruits and vegetables were mostly imported to India. It was noted that vegetable
products imports from South Asia to India witnessed extraordinary boom.
Table 6 provides a distinguishing feature of trade barriers prevailing in exports
of India to rest seven SAEs. Non-basmati rice is mostly exported from India to
Table 5. RTB Index for South Asia’s Agro-Exports to India
Product 2002 2004 2006 2008 2010 2012 2014 2016
HS010410 0 0 0 0 0 0 0 0
HS010420 11.68 10.68 0 0 0 0 0 0
HS020130 0 0 0 0 0 0 0 0
HS030274 0 0 0 0 0 0 0 0
HS030281 0 0 0 0 0 0 0 0
HS030232 0 0 0 0 0 0 0 0
HS040590 0 18.39 11.55 14.38 3.92 10.91 87.92 15.03
HS060220 0 0 0 0 0 8.42 0 0
HS060240 0 0 0 0 0 0 0 0
HS060290 0 0 0.05 0.12 4.29 1.51 0 0
HS070190 0 10.68 9.39 0 0 0 0 0
HS070200 0 0 0 0 0 0 0 0
HS070310 0 0 0 14.47 15.67 0 34.31 13.87
HS071331 2.44 8.22 0.28 0.01 3.08 0.42 1.22 1.30
HS080410 36.81 59.79 40.11 41.70 47.28 25.79 46.40 50.31
HS080610 1.08 1.58 0 0.89 0.24 0.23 0.36 1.71
HS090411 0 31.92 41.97 55.71 76.77 74.63 48.29 36.34
HS100199 0 0 0 0 0 0 0 0
HS100510 0 0 0 0 0 0 0 0
HS100620 0 0 0 0 0 0 0 0
HS100640 0 0 0 0 0 0 0 0
HS130190 26.24 37.76 56.22 84.16 99.40 94.39 12.04 99.79
HS140490 80.90 41.30 62.60 124.30 139.37 145.18 133.46 43.46
HS180500 0 0.24 1.12 0.52 1.30 0.42 5.60 9.68
HS170490 2.26 1.69 12.73 11.22 2.38 4.38 17.41 21.27
HS170410 0.72 4.86 1.73 0 0 2.53 11.27 39.16
HS220110 12.71 73.22 60.83 16.04 0.30 0 10.58 83.97
HS220300 10.28 33.81 5.32 5.10 0 4.37 0.34 0.15
Source: Authors’ own calculation based on data from ITC UN COMTRADE database 2016.
130 Foreign Trade Review 56(1)
Table 6. RTB Index for India’s Agro-Exports to South Asia
Product 2002 2004 2006 2008 2010 2012 2014 2016
HS010410 NA 0 0 0 32.05 0 0 23.15
HS010420 0 0 39.55 45.09 37.62 41.45 30.61 27.01
HS020130 0 0 38.77 2.59 6.44 1.71 1.76 1.87
HS030274 NA – – – – – – –
HS030281 NA – – – – – – –
HS030232 0.20 0 4.54 4.77 15.76 0 1.17 0.08
HS040590 0.03 0.24 0.63 0.63 0.05 1.45 5.76 4.59
HS060220 0.07 0.10 0.16 0.02 0.02 0.06 0.10 0.08
HS060240 0 0.83 3.49 18.03 13.68 9.22 10.93 0
HS060290 0.97 8.39 1.20 1.46 0.84 1.28 3.20 1.84
HS070190 10.45 15.01 23.64 31.58 23.43 0.61 20.77 18.13
HS070200 18.95 17.97 12.83 43.07 34.80 3.97 28.44 23.16
HS070310 89.76 157.17 40.77 39.37 30.03 37.99 24.13 25.50
HS071331 4.73 0.80 1.77 0.23 0.80 1.33 0.00 0.04
HS080410 0.00 0.00 0.01 0.13 0.00 0.03 0.02 0.03
HS080610 4.66 4.90 6.42 2.03 9.32 4.20 1.73 3.49
HS090411 0.01 0.01 0.01 0.38 0.22 0.19 0.08 0.06
HS100199 NA NA NA NA NA 39.19 34.94 0.70
HS100510 0.31 4.60 6.28 11.45 10.99 8.96 2.54 7.04
HS100620 0 0 1.97 0.03 0 0 5.23 0
HS100640 23.46 7.57 16.33 5.27 3.58 33.43 25.73 26.46
HS130190 0.37 1.07 0.20 1.41 0.77 0.95 1.78 1.11
HS140490 30.80 17.64 18.78 15.78 14.46 11.80 9.21 8.13
HS180500 0 0 0 0 0.03 0.01 0.00 0.01
HS170490 6.64 5.78 5.93 6.83 7.71 12.49 10.56 8.77
HS170410 0.90 1.10 10.76 11.00 11.53 27.44 20.32 13.96
HS220110 0.73 0.62 0.50 0.84 0.52 0.23 0.30 1.70
HS220300 0.09 0 21.94 17.31 12.31 7.37 1.49 0.14
Source: Authors’ own calculation based on data from ITC (2016) database.
Note: NA denotes not available.
almost all South Asian trading partners but lesser to Pakistan. RTB value for bro-
ken rice (HS100640) was more than 1, which indicated that India’s trade with rest
SAEs in this product was more compared to other world. Live animals like goats
are mostly exported to South Asia but processed meat is quite restricted. Fresh or
chilled onions are second top products traded to South Asia. Dairy products are
also highly traded due to the recent developments through white revolution in the
country. Live plants imports from India were widely restricted. Overall, vegetables
have shown remarkable growth with South Asia. Mixed results were obtained
where fresh grapes trade has increased but fresh or dried date’s trade was very low.
Table 7 shows trade potential of India with rest SAEs for 17 agro-products dur-
ing 2002–2016. Overall, year wise, trade potential between these two trading part-
ners was maximum in 2010, that is, USD 4,092,944 thousand which decreased to
USD 3,630,732 thousand in 2016. Product wise, cotton has maximum bilateral
trade potential followed by cane or beet sugar. India offers a growing and increas-
ingly open market for rest seven SAEs. But, with the growing importance of
Table 7. TPI Between India and Rest Seven Trading Partners of South Asia (USD 1,000)
Product 2002 2004 2006 2008 2010 2012 2014 2016 Total
Pure Bred Breeding Bovines) (HS010210) 0 20 0 23 21 28 0 0 92
Fresh or Chilled Bovine Meat, Boneless (HS020130) 0 15 179 766 2,113 3,310 4,859 56 1,298
Frozen Shrimps and Prawns (HS030617) 0 0 0 0 0 0 5,409 8,731 14,200
Natural Honey (HS040900) 2,615 3,589 2,041 3,887 5,590 4,870 3,250 4,798 30,640
Guts, Bladders and Stomachs of Animals (Other Than
Fish) (HS050400)
81 111 88 987 473 588 860 414 3,602
Live Plants Including Their Roots, Mushroom Spawn
(HS060290)
1,247 1,373 4,491 6,457 6,562 8,441 9,383 10,065 48,019
Fresh or Chilled Onions and Shallots (HS070310) 3,653 46,268 21,589 81,908 153,355 3,052 70,954 30,905 823,368
Fresh or Dried Cashew Nuts, Shelled (HS080132) 606 1,194 1,669 1,265 9,530 12,203 4,295 34,476 65,238
Black Fermented Tea and Partly Fermented Tea
Whether or not Flavoured (HS090240)****
18,049 215,859 240,631 255,076 323,567 364,717 329,123 497,667 2,499,720
Semi-Milled or Wholly Milled Rice Polished or
Glazed or not (HS100630)
2,820 41,000 53,243 7,219 404,491 84,381 243,226 67,814 904,194
Wheat and Mesin Excluding Seed for Sowing and
Dorum Wheat (HS100199)
0 0 0 0 0 0 358,456 1,326,229 1,684,685
Soya Beans Whether or not Broken (HS120190) 0 0 0 0 0 0 7,170 388,082 395,252
Vegetable Saps and Extracts Excluding Liquorices,
Hops and Opium (HS130219)
3,742 4,647 3,458 10,152 15,216 27,031 28,279 32,003 124,528
Vegetable products (HS140490) 1,306 967 2,927 14,234 11,791 12,198 16,235 21,813 81,471
Cane or Beet Sugar and Chemically Pure Sucrose in
Solid Form (HS170199)
2,910 101,684 714,102 155,079 896,476 257,127 164,816 223,942 2,516,136
Chocolates and Other Containing Cocoa in Packaging
of <= 2 kg (HS180690)
356 1,747 3,846 7,720 8,630 32,031 57,768 99,756 211,854
Cotton Neither Carded Nor Combed (HS 520100) 6,271 101,494 825,082 1,039,406 2,255,129 2,413,186 79,498 883,981 7,604,047
Total 43,656 519,968 1,656,778 1,584,179 4,092,944 3,223,163 1,378,722 3,630,732
Source: Authors’ own calculation based on data from ITC (2016) database.
132 Foreign Trade Review 56(1)
NTMs, it is difficult to say if the trade potential in high value agro-products will
exist or not in the long term.
Discussion and Conclusion
NTMs were started with non-trade objectives like protecting health and environ-
ment and looking beyond the objectives of NTBs which were only for trade
restricting purposes. But in South Asia, the case is found different. Here, NTMs
have turned into NTBs. It was found that post-SAFTA; member countries have
not successfully reaped the benefits of trade due to emerging hidden trade barri-
ers. Almost all the trading partners have witnessed trade barriers within the
SAARC region. Exporting countries of South Asia are unable to meet the techni-
cal requirements of standards due to poor infrastructure, defective accreditation
boards and testing and laboratory at the land custom check points, etc., Nepal and
Bhutan have remained landlocked for long period of time due to no transit route
for investment opportunities with the neighbouring countries. Removing NTMs
from agriculture in South Asia is difficult because a large population is dependent
on agriculture for employment. Lack of NTMs awareness is one of the major
reasons behind trade restrictions. Thus, each country must be aware of different
trade procedures and regulations of one another. Trading partners must aim to
revamp the policies and regulations, identify, evaluate and eliminate NTMs for
rapid growth. Sensitive products should be identified and extensively promoted
for fast intra-regional trade in South Asia. Regional cooperation may be an impor-
tant tool to bring productive endeavours and new dimensions. Mukherji (2015)
suggested that countries like India, Pakistan and Afghanistan must try to seize the
emerging trade opportunities through removing NTMs and ensuring that NTMs
are used in a transparent manner otherwise NTMs may turn into a NTB. Based on
our own findings and also by other authors cited above, the focus should be given
to reduce NTMs, increase product competitiveness and diversification.
Connectivity, collaborations, international standards and trade agreements must
be developed to achieve high trade benefits within South Asia.
To conclude, it was pointed out that although SAARC members had agreed to
follow SAFTA but when it came to investing NTMs in agri-trade, results gave a
different picture. It is noteworthy to mention that the major objectives and
commitments of SAFTA are yet to be achieved and import penetration within the
members of South Asia is low. This article provides a concerted effort to show that
agri-trade between India and selected SAARC trading partners are poorly
disseminated with low shares. Trade barriers are present within South Asia in
spite of trade potential present in many agro-products between India and rest
SAEs (see Table 7). RTB index confirmed that low exports were present due to
existing trade barriers (as evident from Tables 5 and 6). This was also supported
by Tables 3 and 4. Study proves that post-SAFTA, NTMs have emerged as a key
challenge and substantially reduced intra-regional agri-trade in South Asia. Trade
of wheat between India and SAARC countries was severely affected during
2002–2012. Export ban was one of the major reasons that India had put in 2007.
Kumar and Bharti 133
Trade potential as well as RTB value for wheat between both the trading partners
was also nil during the same period. NTMs are also extensively used by rest
SAARC countries to restrict India’s agri-trade (see Figure 1). On the other side, it
was also revealed that India too restricted agro-products of trading partners like
Nepal and Pakistan (see Figures 2 and 3). CR of Sri Lanka as exporting country
to India was found in very few products (see Figure 4). Thus, in spite of recent
trade liberalisation, high levels of protection and export pessimism is found in
agri-trade in South Asia and, therefore, further reduction is required in trade
barriers. This study has implications for policy architect and agricultural exporters
of South Asia as it suggests ensuring transparency in NTMs in agriculture sector.
Finally, a proper trade facilitation may also be framed for each South Asian
country to reduce present trade impediments through simplifying, harmonizing
and standardizing trade procedures. Pro-active initiatives by each country can
bring more regional integration and future conformity amongst each other. This
study provides a future scope for quantifying NTMs in South Asia in other sector
by exploring repercussions with other methods.
Acknowledgement
The authors acknowledge the valuable suggestions given by anonymous reviewers
of Foreign Trade Review on the earlier draft of this article. First author would like to
thank late Dr Saman Kelegama (Institute of Policy Studies, Sri Lanka) and Dr Sumudu
Perera (University of Jayewardenepura, Sri Lanka) for initial valuable comments on the
earlier version of the paper presented at the International Conference on Economics and
Development (ICED), 15–16 June 2017, Colombo, Sri Lanka.
Declaration and Conflicting Interests
The authors declared no potential conicts of interest with respect to the research,
authorship and/ or publication of this article.
Funding
This research was nancially supported by the University Grants Commission (UGC)
Doctoral Fellowship, India.
Appendix 1
Product Code Product
HS010410 Live sheep
HS010420 Live goats
HS020130 Fresh or chilled bovine meat, boneless
HS030274 Fresh or chilled eels
HS030281 Fresh or chilled dogfish and other sharks
HS030232 Fresh or chilled tunas
HS040590 Fats and oils derived from milk, hydrated ghee butter
HS060220 Edible fruit or nut trees, shrubs and bushes
HS060240 Roses whether or not grafted
(Appendix 1 continued)
134 Foreign Trade Review 56(1)
Product Code Product
HS060290 Live plants incl. roots, mushroom
HS070190 Fresh or chilled potatoes (excl seed)
HS070200 Tomatoes, fresh or chilled
HS070310 Fresh or chilled onions
HS071331 Dried shelled beans of vigna mungo
HS080410 Fresh or dried dates
HS080610 Fresh grapes
HS090411 Pepper of genus piper neither crushed nor ground
HS100199 Wheat and mesin excluding seed for sowing and dorum wheat
HS100510 Maize seed for sowing
HS100620 Husked or brown rice
HS100640 Broken rice
HS130190 Lac; natural gums, resins
HS140490 Vegetable products
HS180500 Cocoa powder, not containing added sugar or other sweetening matter
HS170490 Sugar confectionery not cocoa
HS170410 Chewing gum
HS220110 Mineral water not containing sugar
HS220300 Beer made from malt
Source: ITC (2016).
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