Hidden Market Access Barriers in China: India’s Exports in Electrical Machinery

Abstract

India and China have significant bilateral trade flows leading to trade specialization in different product categories. The bilateral trade between these countries is clearly dominated by the Chinese exports. The trade figures show that the value of India’s import from China stood at USD 71.9 billion against its exports to China USD 12.4 billion. This paper evaluates the trade barriers faced by India in China’s market focusing mainly on electrical machinery sector. The empirical analysis shows that China has hidden trade barriers in electrical machinery sector by replacing the use of ad-valorem tariff with non-ad valorem tariff (AVE’s). This study will help India to address the issue of market access and demand removal of trade barriers in the electrical machinery sector while negotiating at the RCEP with China to address the issue of trade imbalance.

Keywords: RCEP Negotiations, Non-Ad-Valorem Tariff, Technical Barriers to Trade, Electrical Machinery, Time Series, China

JEL Classification: F13, F14, F15, F69