Difference between Tariff and Non-Tariff Barriers

By Sudheer Kumar K|Updated : May 24th, 2021

'Tariff and Non-Tariff Barriers' is a very important sub-topic under Foreign Trade in Indian Economy. Trade barriers are imposed to protect domestic companies by putting restrictions on the movement of goods among nations. These barriers are classified into two categories – tariff barriers and non-tariff barriers.

Table of Content

Tariff and Non-Tariff Barriers

Tariff barriers are nothing but tax or duty imposed on the goods which are traded to/from abroad. These are imposed mainly to increase country's revenue and to protect local firms from foreign competition.

Non-tariff barriers are the obstacles or trade restrictions to international trade, other than tariffs –such as a quota, embargo, sanction or license–that countries use to further their political and economic goals.  These are administrative measures implemented by the country’s government to discourage goods brought in from foreign countries to promote domestically produced items. 

Difference between Tariff and Non-Tariff Barriers

S. No.Tariff BarriersNon-Tariff Barriers
1tax or duty imposed on imported goodstrade restrictions or obstacles to international trade
2World Trade Organization (WTO) permitted the imposition of tariff barriers to its member nation but at a reasonable rate onlyWTO abolished the imposition of import quotas and voluntary export restrictions.
3imposed in the form of Taxes or Dutiesimposed in the form of regulations, conditions, requirements, formalities, etc.
4increases the price of imported goodsaffects the quantity or price or both of the imported goods.
5controls high profits to importersimporters can make more profits
6to increase revenue of the statesno revenue is accrued by the government
7to protect local firms from foreign competitionto favor domestic firms against foreign suppliers

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