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Non-Tariff Measures Affecting India’s Textiles and Clothing Exports : Findings from the Survey of Exporters

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  • Gordhan K. Saini

    (IGIDR)

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    Abstract

    This paper reports findings from the survey of Indias textiles and clothing exporters. The survey method has been used to identify and assess the impact of Non-Tariff Measures (NTMs) and the Cost of Compliance (COC) expenditure by the exporters. A structured questionnaire has been used to gather data from a sample of 135 exporters across eight export centers of India i.e. Bangalore, Chennai, Coimbatore, Ludhiana, Mumbai, New Delhi, Panipat and Tirupur. Results reveal that the EU and USA are most restrictive region/country covering nearly three-fourth of total NTM incidences. The technical regulations, product & production process standards and conformity assessment for technical barriers are the most frequently used NTMs among the aggregated five categories. The average COC as percentage of turnover is inversely related to the firm size, which is 0.63% for large firms and 1.32% for small firms. However, about 58% of the firms spend less than 0.5% of their turnover on COC which is much lower than overall average of 1.12% and only 26% firms spend more than 1% of their turnover in complying with NTM standards. The COC is not exorbitant and justifiable given its long term benefits. Some of the common issues about NTMs are buyer nomination of the suppliers and testing & certification agencies, stringent social compliance measures, and discriminatory treatment on the basis of standards, import duty and other benefits. Unexpectedly, the NTMs are not only seen as marketing and promotional tool but also they promote efficiency and competitiveness within the industry. Further, financial crisis has reduced the export orders/volumes and the impact is more severe on high end fashion garments where product and market diversification is unlikely due to ever changing customer preferences.

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    Bibliographic Info

    Paper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number 22936.

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    Date of creation: Jan 2009
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    Handle: RePEc:eab:tradew:22936

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    Related research

    Keywords: non-tariff barriers; Non-Tariff Measures; Cost of Compliance;

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