Non-Tariff Measures, Technological Capability Building and Exports in India's Pharmaceutical Firms

Ganeshan Wignaraja and Frederick Nixson

No 2004-06, UNU-INTECH Discussion Paper Series from United Nations University - INTECH

Abstract: As tariffs fall over time, attention inevitably focuses on non-tariff measures (NTMs). Governments are increasingly imposing mandatory technical regulations on products for reasons of security, health or the environment and have facilitated the introduction of non-mandatory (voluntary) standards for products in order to facilitate their utilisation. The WTO administers the implementation of the Agreement on Technical Barriers to Trade (TBT) and the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), which together constitute the core of modern NTMs. This paper presents a case study of the effects of NTMs on Indian pharmaceutical exports (bulk drugs and formulations). Within the broad context of India's recent export performance, market access, competitiveness and technological capability building, the study utilises enterprise-level data to identify the type and nature of NTMs faced in export markets, the compliance with NTMs (including preliminary estimates of the costs of compliance), technology strategies of enterprises in response to NTMs and institutional support. The study highlights differing perceptions as to the significance of NTMs, the importance of firm-level research, lessons for other low- income economies and the need for enterprises to adopt offensive technological strategies. The study concludes by identifying a number of domestic constraints and market failures that are at least as important as NTMs in explaining India's relatively poor export performance

Keywords: Non-tariff Measures; WTO Agreements; Technological Capability; Exports; Pharmaceuticals; India (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (3)

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