What is the common examiner trap about Economy in UPSC exams?

Examiners will test the distinction between tariffs and non-tariff barriers. A common trap is to ask which is the 'primary' barrier to trade today, expecting 'tariffs' as the traditional answer, while the correct answer is 'NTBs'. Another trap is swapping the NTB coverage percentages between the EU (94%), US (77%), and India (45%).

What should UPSC aspirants remember about Economy for Prelims?

1. Target this Data: NTBs affect ~90% of global trade; India's FTA utilisation rate is ~25% 2. Target this Nodal Body: WTO (World Trade Organization) - notified over 7,700 NTB measures in 2025 3. Target this Legal Point: India-EFTA TEPA (Trade and Economic Partnership Agreement) - legally binding NTB reduction

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NTBs Surge as Tariffs Decline: 90% Global Trade Affected, India FTA Utilisation at 25%

Q: Which international organization is responsible for notifying non-tariff barriers (NTBs) and trade measures among its member countries?

World Trade Organization, The article mentions that WTO members submit notifications of NTBs and health-related trade measures. The WTO is the primary international body for regulating trade between nations and ensuring transparency in trade measures.

Q: Consider the following statements regarding non-tariff barriers (NTBs): 1. NTBs include regulations, certifications, licensing rules, and product requirements that goods must meet before entering a market. 2. Since the establishment of the WTO in 1995, average tariff rates among its members have doubled. 3. India's FTA utilisation rate is about 25%, compared with 70%-80% for developed economies. Which of the statements given above is/are correct?

Both 1 and 3, Statement 1 is correct as the article defines NTBs as regulations, certifications, licensing rules, and product requirements. Statement 2 is incorrect because since the WTO's establishment, average tariff rates have fallen by nearly half, not doubled. Statement 3 is correct as the article states India's FTA utilisation is about 25% compared to 70-80% for developed economies.

Q: According to the article, what percentage of global trade is currently affected by non-tariff barriers (NTBs)?

~90%, The article explicitly states that NTBs today affect around 90% of global trade, which represents a sixfold increase over the past three decades. The other options are close distractors.

Q: What is the primary reason for India's low FTA utilisation rate of about 25% as highlighted in the article?

Non-tariff barriers making it commercially impractical to claim preferential benefits, The article specifically attributes India's low FTA utilisation to NTBs. For example, Indonesian registration requirements restrict Indian pharma exports, and Thai customs procedures force gems and jewellery exporters to reroute shipments. These barriers make claiming FTA benefits commercially impractical, not the lack of agreements or high tariffs.

Economy Intl. RelationsCORE

Target:UPSC GS-IIIMPSCSSC GATeachingBankingPrelims HighMains HighStatic GK Link

18 Jun 2026

~2 min

Source: The Hindu

Key Data:NTBs affect ~90% global tradeIndia FTA utilisation ~25%NTB coverage EU ~94%NTB coverage US ~77%NTB coverage India ~45%WTO NTB notifications 2025: over 7,700

Bodies:WTOEU

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~2 min · Quick mode

What This Article Covers

1.Non-tariff barriers (NTBs) now affect ~90% of global trade, a sixfold increase since 1995, while average tariffs among WTO members have halved.

2.India’s FTA utilisation rate is only ~25%, compared to 70-80% for developed economies, largely due to NTBs like Indonesian registration requirements and Thai customs procedures.

3.India's newer FTAs with UAE and EFTA include legally binding commitments to reduce NTBs, signaling a strategic shift in trade policy.

The Big Picture

Prelims · HighMains · High

This article explains that in the 21st-century global economy, non-tariff barriers (NTBs) like regulations, certifications, and product standards have overtaken tariffs as the primary obstacles to trade. For India, this is a critical insight as its FTA utilisation rate is only ~25%, and future trade success hinges on negotiating NTB reduction, not just tariff cuts.

Exam Lens

Quick Exam Facts From News

NTBs affecting global trade~90%

India's FTA utilisation rate~25%

NTB coverage in EU imports~94%

NTB coverage in US imports~77%

NTB coverage in India imports~45%

WTO NTB notifications in 2025Over 7,700

India-South Korea bilateral trade (2024-25)$27 billion

1-Minute Revision

›NTBs affecting global trade: ~90%
›India's FTA utilisation rate: ~25%
›Target this Data: NTBs affect ~90% of global trade; India's FTA utilisation rate is ~25%
›Target this Nodal Body: WTO (World Trade Organization) - notified over 7,700 NTB measures in 2025
›Target this Legal Point: India-EFTA TEPA (Trade and Economic Partnership Agreement) - legally binding NTB reduction

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News Snapshot

📉

Tariffs are no longer the main barrier

While media focuses on tariff numbers, NTBs like regulations, certifications, and product standards now determine market access and trade competitiveness.

🌐

NTBs surged as tariffs fell

Since WTO's establishment in 1995, average tariffs have halved, but NTBs now affect ~90% of global trade, with over 7,700 notifications in 2025 alone.

🇮🇳

India's low FTA utilisation rate

Despite FTAs with ASEAN, Japan, and South Korea, India's FTA utilisation is only ~25% due to NTBs, making regulatory harmonization the next frontier for trade.

Detailed Analysis & Strategic Depth

Context / Background

The article highlights a structural shift in global trade: since the WTO's establishment in 1995, average tariff rates among members have fallen by nearly half. However, governments have not abandoned protectionism; they have replaced tariffs with non-tariff barriers (NTBs). NTBs include technical regulations, environmental rules, health and safety requirements, packaging standards, and testing procedures. These are less transparent than tariffs but exert a far-reaching influence on trade.

Core Analysis & Implications

NTBs now affect ~90% of global trade, a sixfold increase over the past three decades. Over half of the 20,000 global product and safety regulations introduced in the last 70 years have emerged since 2000. The EU is the most extensive user of NTBs (covering ~94% of imports), using environmental and climate-related rules like CBAM and the EU Deforestation Regulation. The US uses export controls and entity lists for strategic competition. India, traditionally reliant on tariffs, is now expanding quality regulations on electronics, machinery, and chemicals to boost domestic manufacturing.

Future Outlook / Way Forward

India's newer trade agreements signal a shift. The India-UAE CEPA mandates automatic recognition of medicines approved by major global regulators. The India-EFTA TEPA (in force since October 2025) includes mutual recognition of standards and a dedicated sub-committee to address NTBs. For the first time, NTB reduction is a legally binding obligation. The article argues that if the West wants a serious economic pivot to the East, addressing regulatory barriers will matter far more than cutting tariffs.

Key Facts at a Glance

NTBs affecting global trade~90%

India's FTA utilisation rate~25%

NTB coverage in EU imports~94%

NTB coverage in US imports~77%

NTB coverage in India imports~45%

WTO NTB notifications in 2025Over 7,700

India-South Korea bilateral trade (2024-25)$27 billion

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Practice exam-style questions based on this article.

Q1Static LinkageEasyUPSC, SSC, Banking

Which international organization is responsible for notifying non-tariff barriers (NTBs) and trade measures among its member countries?

Q2Statement-basedHardUPSC, SSC

Consider the following statements regarding non-tariff barriers (NTBs):

1. NTBs include regulations, certifications, licensing rules, and product requirements that goods must meet before entering a market.

2. Since the establishment of the WTO in 1995, average tariff rates among its members have doubled.

3. India's FTA utilisation rate is about 25%, compared with 70%-80% for developed economies.

Which of the statements given above is/are correct?

Q3Data-centricMediumUPSC, Banking, SSC

According to the article, what percentage of global trade is currently affected by non-tariff barriers (NTBs)?

Q4Application/ImpactMediumUPSC, SSC, Banking

What is the primary reason for India's low FTA utilisation rate of about 25% as highlighted in the article?

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NTBs Surge as Tariffs Decline: 90% Global Trade Affected, India FTA Utilisation at 25%

Exam Lens

Quick Exam Facts From News

1-Minute Revision

News Snapshot

Tariffs are no longer the main barrier

NTBs surged as tariffs fell

India's low FTA utilisation rate

Detailed Analysis & Strategic Depth

Context / Background

Core Analysis & Implications

Future Outlook / Way Forward

Prelims Flashpoints

Key Facts at a Glance