Tariff and Non Tariff Barrier

International Business Management

Objectives of Protection
To protect domestic Industries from Foreign Competition To direct the foreign trade in accordance with national priorities To promote indigenous research and development

To conserve foreign exchange reserve of the country

To make balance of payment position favorable To curb conspicuous consumption

To mobilize revenue for the government

To discriminate against certain countries
International Business Management

Demerits of Protection
Protection is against the interest of the consumers as it increases price and

Reduces variety and choice.

Protection makes producers and sellers less quality conscious

Protection encourages domestic monopolies

Inefficient firms may feel secure and it discourages innovation.

Protection leaves the arena open for corruption

Protection reduces the volume of foreign trade
International Business Management

Tariff Barriers
Tariffs in international trade refer to the duties or taxes imposed on internationally traded goods when they cross the national borders.

International Business Management

Types of Tariff basis of Quantification

A Indian importer of Chinese computer may be required to pay a duty of Rs1000 per computer regardless of the price Specific Tariff A US importer of a Japanese trucks valued at $20000 would be required to pay a duty of $3000 to the Govt. ( $20000 X 15% = $3000). This 15% is an Ad Valorem Tariff.

A Indian importer of a Television might be required to pay a duty of Rs2000 plus 5 percent of the value of the television Compound tariff
International Business Management

Types of Tariff basis of origin and destination

Export Duties
Import Duties

Transit Duties

International Business Management

Types of Tariff

basis of application between different countries

Single - Column Tariff

Double - Column Tariff

Triple Column Tariff

International Business Management

Types of Tariff basis of purpose they serve

Revenue Tariff
Protective Tariff

Countervailing and Anti-Dumping

duties

International Business Management

Non Tariff Barrier

1. 2. Voluntary Export Restraints Administered Protection Safeguards Health and Product Standards Custom Procedure Consular Formalities Licensing Government Procurement State Trading Monetary Controls Environment Protection Law Foreign Exchange Regulations
International Business Management

International Business Management

International Business Management