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In collaboration with Bain & Company and the World Bank

See full report for more details: www3.weforum.org/docs/WEF_SCT_EnablingTrade_Report_2013.pdf

Agenda

• Executive summary- Main lessons and policy implication- Case index

• Report- Background- Main lessonsReducing supply chain barriers to trade could increase GDP up to 6x

more than removing tariffsTrade increases from reducing supply chain barriers can be achieved

only if specific tipping points are reachedRecommendation to countries and companies – the devil is in the

details- Policy implication: Think supply chain!

• Case example summaries

Executive summary (1/2) – Main lessonsReport examines supply chain barriers to trade and combines a macroeconomic analysis with 18 in-depth company case studies. It summarizes insightful lessons for governments and companies.

A. Reducing supply chain barriers to trade could increase GDP up to six times more than removing tariffs. They have been under-managed by both countries and companies-Reducing supply chain barriers to trade could increase GDP by nearly 5% and trade by 15%-Reducing barriers benefits households by lowering prices and improving employment prospects

B. Trade increase from supply chain barriers reduction can be achieved only if specific tipping points are reached-The effects of reducing barriers are not gradual; changes occur when tipping points are reached-A barrier’s consequences vary by industry-Barriers are harder to overcome for smaller businesses-Clear regulations and better coordination among agencies are needed

C. Recommendations to countries and companies — the devil is in the details-Governments need to remove relevant sets of barriers for their industries. They should be aware that certain companies have a vested interest in preserving barriers

-Companies may not recognize costs where they should

Executive summary (2/2) –Policy implication: Think supply chain!

• Create a domestic agenda to improve national supply chain performance- Create a national mechanism to set policy priorities for improving supply chain efficiency

based on objective performance data and feedback loops between government and firms

- Create a focal point within government with a mandate to coordinate and oversee all regulation that directly affects supply chain efficiency

- Ensure that SME interests are represented in the policy prioritization process and that solutions are designed to address specific constraints that disproportionately impact small and medium-sized enterprises (SMEs)

• Options for international cooperation- Pursue a whole-of-the-supply-chain approach to negotiating barrier removal, whether

through multilateral or regional agreements- Launch a global effort to pursue conversion of manual and paper-based documentation

to electronic systems, using globally agreed data formats

Report is built on 18 case examples from 21 companies

# Case exampleNorth

AmericaLatin

AmericaEurope North

AfricaSub-

Saharan Africa

Middle East

Asia-Pacific

1 Agriculture Co. Brazil2 Apparel Co.3 Chemical Co. Brazil4 Computer Co. Russia5 CPG Co.6 eBay7 Express Delivery Co.8 Global Co.9 Handset Distribution Brazil*

10 Healthcare Co. China11 IATA12 Mexican Chemical Co.13 PC Co.14 Pharmaceuticals China**15 Rubber Products16

Semiconductor Co. Brazil Russia China + India

17 Shipping Co. China18 Tech Co. India

Market Access

Border Admin.

Infra-structure

Bus. Envi-

ronment

Brazil, Russia, India and China (BRIC countries) are only covered in cases where pointed out.* Case covers Brazil and other Latin America; ** Case covers China and other Asia-Pacific.Note: Company names have been disguised to avoid sensitivities.

Geographic coverage Barrier coverage

Covered

Global case

Detailed case examples can be found in the report.

Agenda







Enabling Trade Programme

• The World Economic Forum’s Enabling Trade Programme delves into the fundamental attributes that govern a nations ability to benefit from trade.

• By bringing together the key actors, the programme helps policy-makers appreciate private sector priorities for action.

• The Enabling Trade Programme (2012) aims to foster a supply chain approach to trade negotiations by quantifying the impact of supply chain barriers

• The work is informed by the Global Enabling Trade Report

7

A reduction in tariffs has led to increased trade, but negotiations have stalled

International trade volumes have grown with reduced tariffs But negotiations have stalled

Source: Tariffs adapted from Coatsworth and Williamson (2002) and Mitchel (1992) referenced in Nenci (2009); World Bank World Trade from World Trade Organization Report 2012; Headlines from Reuters, The Sunday Telegraph, The Australian, and Dow Jones 8

0

2

4

6

8

10

0

5

10

15

$20T

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

World Trade($T)

Average of World Tariffs(%)

World Trade

Average World Tariffs

This report takes a holistic view andidentifies four types of supply chain barriers

Market access Border administration

Telecom and transport

infrastructure

Business environment

• Domestic and foreign market access- Quotas- Import fees – not tariffs (e.g.

tax schemes)- Local content requirements- Rules of origin - Technical, sanitary &

phytosanitary measures or other requirements

- Import/export licenses

• Efficiency of customs administration

• Efficiency of import-export procedures (e.g. coordination between border agencies; admin. burden of complying with standards)

• Transparency of border administration(e.g. facilitation payments)

• Availability & quality of transport infrastructure

• Availability & quality of transport services

• Availability and use of information and communications technologies (ICTs)(e.g. tracking, electronic tolls, communication)

• Regulatory environment- Regulatory environment –

investment policy- Regulatory environment –

hiring foreign workers- Other regulatory

environment (incl. trade finance)

• Physical security

Definition: The lack of infrastructure, institutions, policies, and services facilitating the free flow of goods over borders

Note: The Global Enabling Trade Report identifies nine pillars; this is an extended list including several sub-pillars as tested in a separate survey for this study 9

1 2

3

4

5

6

7

8

9

The barriers have varying consequences interms of costs, delays, volume and risk

Consequence Costs Delay Volume Risk

Barrier

Increased operational

costs

Increased investment/

working capital

Increased average delay

Increased variable delay

(unpredictability)

Decreased volume

Increased (political) risk

(unpredictability)

Domestic and foreign market access

Efficiency of customsadministration

Efficiency of import-export procedures

Transparency of border administration

Availability and quality of transport infrastructure

Availability and quality of transport services

Availability and use of ICTs

Regulatory environment

Physical security

• Customer satisfaction/ opportunity costs/lawsuits

• Increased FX risk

• Increased theft/breakage

• Increased buffer stock

• Increased stock in transit

• High depreciation/scrap rate

• Either incur risk or insurance (i.e. hedging or spreading risk)

• Require higher return on investment (lowers volume)

Potential implications

Illustrative

Companies combine US$ 800 billion in revenue &represent many industries and geographies

Industry (# of companies)

Country coverage

North America

Latin America

West Europe

East Europe

North Africa

Sub-Saharan

Africa

Middle East

Asia-Pacific BRIC

Agriculture (1) ~40

Healthcare (3) ~40

Pharmaceuticals (2) ~100

Chemicals (2) >20

Technology (5) >65

Apparel (1) >15

Consumer goods (2) ~100

Internetmarketplace (1) >45

Express delivery (2) Global

Shipping (1) Global

Air transport (1) Global

Note: Brazil, Russia, India and China are excluded from their respective geographic groups, and grouped within BRIC.Healthcare excludes pharmaceuticals; Asia-Pacific includes Australia.

Focus of case study

Company presence

Agenda







Reducing supply chain barriers could increase GDP up to 6x more than tariff removal

• Reducing supply chain barriers to trade could increase GDP by nearly 5% and trade by 15%- By reducing just border administration and telecom and transport infrastructure barriers halfway to the

world’s best practice (i.e. Singapore), global GDP could increase US$ 2.6 trillion (4.7%) and exports US$ 1.6 trillion (14.5%)

- In comparison, tariff removal would only increase global GDP by US$ 0.4 trillion (0.7%) and exports by US$ 1.1 trillion (10.1%); the gains would also be more specific to countries and industries

- Reducing barriers is more effective as it eliminates resource waste, whereas abolishing tariffs mainly reallocates resources; however, removing certain supply chain barriers would require more investments

• Reducing barriers benefits households by lowering prices and improving employment prospects- Reducing supply chain barriers lowers costs and hence lowers prices for both consumers and firms

importing production inputs- Consumers would get access to a wider variety of goods- The boost in GDP is likely to stimulate employment growth; in the long run, removing the barriers is

likely to lead to increased productivity and wages

Reducing supply chain barriers has alarger effect than removing tariffs

*Based on export value; includes only the effect of “Border Administration” and “Telecommunication and Transport Infrastructure”.Source: Ferrantino, Geiger and Tsigas, The Benefits of Trade Facilitation - A Modelling Exercise. Based on 2007 baseline.

Countries improve trade facilitation halfway to global best practice

Countries improve trade facilitation halfway to regional best practice

All tariffs removed globally

The GDP effect of reducing supply chain barriers is much higher than for tariffs

The quantification only reflects borderadministration and infrastructure barriers

15Note: Survey question – “In the last year, which pillars within the four main issue areas had the highest impact?” Includes retail & manufacturing industries only, N=65Source: World Economic Forum survey.

Only ~60% of supply chain barriers covered by model

Survey indicates impact could be 60-70% larger

Reducing supply chain barriers spreads GDP gains more widely than removing tariffs

Total 0.7% 2.6% 4.7%Oceania 0.1 1.7 4.3

China, Hong Kong SAR, Taiwan 3.9 3.7 7.6

Japan 0.2 1.1 2

Korea 1 3 4.9

South and Central Asia 1.5 4.5 9.3

South-East Asia 0.5 1.8 8

United States and Canada 0.1 1.5 2.8

Mexico 0.2 2.6 4.4

Brazil 0.2 1.5 3.6

Rest of Americas 0.2 3.5 7.5

Europe, except former Soviet Union 0.2 3.3 4.5

Russia and other former Soviet Union 7.2 3.5 7.4

Non-oil Middle East and North Africa 0.4 3.6 8.5

Sub-Saharan Africa 0.6 4.4 12

Other oil producers 0.2 3.6 6.8

Tariffremoval

Modest scenario

Ambitious scenario

Source: Ferrantino, Geiger and Tsigas: The Benefits of Trade Facilitation- A Modeling Exercise, based on 2007 base line.

Ambitious scenario: The strongest increasewould be seen in Africa and South-East Asia

4-5% 6-8% ≥9% Exports2-3% Imports

GDP increase TRADE increase

Oceania

South-East Asia

South and Central Asia

Mexico

Brazil

Rest of Americas

Europe, except FSU*Russia and other

FSU*

Non-oil Middle East and North Africa

Sub-Saharan Africa

United States and Canada

Korea

China, Hong Kong SAR, Taiwan

Japan

11% 7%

11%26%

38% 39%

30%

74%

2% 6%

46%34%

63% 55%

26%10%

65%49%

71%

33%

12% 18%

9% 9%

11% 3%

31% 34%

1% 2%

Other oil producers

*Former Soviet UnionSource: Ferrantino, Geiger and Tsigas: The Benefits of Trade Facilitation- A Modeling Exercise, based on 2007 base line; Ambitious Scenario.

Increase in global income could also stimulate employment

Source: Council of Economic Advisors to US President (2009); Ball et al., 2012; Crivelli et al., 2012.

Lower range of 171 country study

Higher range of 171 country study

Council of Economic Advisors to US President

Study based on US data beginning in 1948

Modest scenario (2.6% GDP increase)

Aggressive scenario (4.7% GDP increase)

Agenda







Trade increases can be achieved only ifspecific tipping points are reached (1/2)

• The effects of reducing barriers are not gradual; changes occur when tipping points are reached- Even though the macroeconomic model assumes continual functions, company

decisions are usually binary – they either chose to produce/sell in a specific market or don’t

- Incremental reductions in trade barriers may not have an impact until a certain set of barriers is removed

- Once a tipping point is reached, the impact on trade and foreign direct investment can be significant

• A barrier’s consequences vary by industry- The effect of supply chain barriers differs by industry depending on its product

characteristics: time sensitivity, exposure to regulation, value-to-bulk and supply chain complexity

- Companies commonly respond to delays and unreliability by holding additional inventory, which affects industries differently

Trade increases can be achieved only ifspecific tipping points are reached (2/2)

• Barriers are harder to overcome for smaller businesses- Overcoming supply chain barriers often requires significant upfront investments, which

represent fixed costs and might be prohibitive for SMEs- SMEs are often unable to realize economies of scale associated with international

shipping- SMEs will have trouble voicing their concerns

• Clear regulations and better coordination among agencies are needed- Lack of uniform customs rules makes it more costly for companies to operate in multiple

foreign markets and requires significant investment- Coordination can be lacking within countries, especially when an industry falls under the

jurisdiction of multiple government agencies

What if tariffs are removed?

Costs related to barriers

Source: Euromonitor 2011 data for labour costs; Bain analysis; company interview.

Effect of barrier reduction occurs at tippingpoints for specific industries and countries

No tariffs for Africa & EU

Excessive broker’s fee and difficult

transport to port add 4% to free on board

(FOB) cost

But barriers add costs that can tip the balance to the next low-cost country

Madagascar’s labour costs and lack of tariff give it a competitive advantage

Every industry will have its ownsensitivities

Insurance rates demonstrate the sensitivity of certain products to customs delays

Source: Insurances rates for air transport as provided by IATA.

The effect of supply chain barriersdepends on product characteristics

Product characteristic Examples specific impact of barriers

Value to bulk

Exposure to regulation

Time sensitivity

• PC Co. imports computer hardware into Saudi Arabia. Because of valuable cargo, delays at the border can lead to theft

• Chemical Co.’s imports fall under the jurisdiction of multiple US government agencies; lack of coordination can lead to seizure of unclaimed cargo

• Pharma Co. exports medications that must be kept at controlled temperatures; administrative delays at customs can cause product to become unusable

Supply chain complexity

• A highly sophisticated supply chain magnifies barriers: primary inputs face barriers and are then used in secondary or tertiary inputs which face barriers again

11%-15%

Note: Assumes same average revenue per listing in domestic and international markets; author calculations based on US eBay pilot studies preliminary results.Source: Company data; interviews; based on preliminary, targeted US pilot results; authors’ calculations.

International

All Domestic

Total

International salesDomestic sales

And company size matters ̶ SMEs faceproportionally higher barrierseBay pilots suggest significant upside from reducing barriers

Lack of standardized regulations andcoordination between agencies creates barriers

Poor coordination between agencies delays shipments

Rules of origin and local content requirements vary across markets

0

20

40

60

80

100%100 100 100 100

DEA BIS

Chem Co. US import delay byproduct

Mainagencycausingdelays

Apply to certification

body or accredited lab

Inspection

Issue certification

Production

Shipping

Saudi Arabia

Production

Apply to local inspection and

quarantine centres

Pre-shipmentinspection

Issue certification

Shipping

Source: Egypt General Organization for Export and Import Control (GOEIC ); Saudi Arabia Standard Organization.

Egypt requires production before the certification can be started

Certification processEgypt

Agenda







Recommendation to countries andcompanies – the devil is in the details• Governments need to remove the sets of barriers relevant to their industries

- Governments must understand their existing industries and potential future industries in order to prioritize barriers most costly to such industries

- Governments can then develop tailored strategies to reach the tipping points that will unlock trade and investment in such industries

- Singapore’s strategic initiatives have made it one of the most open economies in the world

• Governments should recognize that some companies have a vested interest in preserving barriers- Examples of these companies:Local firms may seek protection from import competitionSome companies’ added value resides in addressing barriersCompanies that have already made significant investments to address barriersFirms that perceive status quo as inevitable

- Governments should realize some relevant stakeholders do not exist yet or have no voice

• Companies may not recognize costs where they should- Companies must account for costs beyond traditional factor costs (e.g. greater inventory, increased

risk of theft)- Costs associated with supply chain barriers may offset more obvious savings, such as lower labour

costs

The consequences of barriers differ andcan be more relevant to a specific industry

Note: Includes manufacturing, retail and logistics, N=108Source: World Economic Forum survey.

Singapore’s targeted approach allowed itto reach #1 on the Enabling Trade Index

2008

#2

2010

#1

2012

#1

Source: World Economic Forum Global Enabling Trade Report 2008, 2010, 2012.

World Economic Forum’s Global Enabling Trade Index (ETI): Singapore

Phases in Singapore’s growth that shaped its development

Pre-1965Import substitution policy

1965-70sExport oriented strategy

1970s-80sCapital intensive,

higher tech industries

1980s-2000sRegionalization

2000s+Hub of knowledge driven industries and services

Inde

pend

ence

in 1

965

from

Mal

aysi

a

Companies should recognize costs –producing in Mexico has hidden costs

Initial view suggests Mexico is 25% cheaper

Border administration, inadequate infrastructure,

reduced availability of local suppliers, security and lower productivity

labour increase the cost 16%

Net benefit of 9%

Note: Hypothetical example based on Bain experience.

Consequence Costs Delay Volume Risk

Barrier

Increased operational

costs

Increased investment/

working capital

Increased average

delay

Increased variable

delay (unpredict-

ability)

Decreased volume

Increased (political)

risk(unpredict-

ability)Domestic and foreign market accessEfficiency of customsadministrationEfficiency of import-export procedures

Transparency of border administration

Availability and quality of transport infrastructure

Availability and quality of transport services

Availability anduse of ICTs

Regulatory environment

Physical security

Companies should take a comprehensiveapproach to supply chain decisions

Factor costs

Barrier costs

Compare alternatives

Strategic implications

Agenda







Policy implication: Think supply chain!

• A domestic agenda to improve national supply chain performance- Create a national mechanism to set policy priorities for improving supply chain efficiency

based on objective performance data and feedback loops between government and firms

- Create a focal point within government with a mandate to coordinate and oversee all regulation that directly affects supply chain efficiency

- Ensure that SME interests are represented in the policy prioritization process and that solutions are designed to address specific constraints that disproportionately impact SMEs

• Options for international cooperation- Whether through multilateral or regional agreements, governments should agree to

pursue a whole-of-the-supply-chain approach to negotiating barrier removal- Launch a global effort to pursue conversion of manual and paper-based documentation

to electronic systems, using globally agreed data formats

Policy implication: Think supply chain!

Policy recommen-

dations

Internationalcooperation

Create a single agency that has a mandate to coordinate

and oversee all regulation that directly impacts supply chain

efficiency

Launch a global effort topursue conversion of

manual and paper-based documentation to

electronic systems, using globally agreed data formats

Ensure that SME interests are represented in

the policy prioritization process and solutions are designed to address specific constraints

that disproportionately impact SMEs

Whether through multilateral or regional agreements, governments should agree to pursue a “whole-

of-the-supply-chain” approach rather than pursuing negotiations in different pillars or silos

22

33

44

55

11 Create a national mechanism to set policy priorities forimproving supply chain

efficiency based on objective performance data and feedback loops between government and

firms

Agenda







Cases Summary (1/4) (download report for detailed case studies)# Name Description Summary

1 Agriculture Co.

Agriculture commodities in

Brazil

Internal transport and communications infrastructure in Brazil, coupled with customs procedures barriers, affect agriculture commodity supply chains that start in remote locations

Lack of infrastructure creates delays and demurrage costs of ~US$ 25,000 per vessel per day Lack of information and communication technology reduces operating efficiencies of truck fleet by

4% Managing customs paperwork takes some 12 times longer in Brazil than in the European Union (full

day vs a couple of hours)

2 Apparel Co.Apparel

manufacturer in Madagascar

Supply chain barriers in Madagascar – shipping services and border administration – threaten to erode the country’s labour cost-competitive advantage

Supply chain barriers account for about 4% of total revenues through higher freight costs, increased inventories and customs charges

Country faces high opportunity cost – for every 1% gain in fast fashion segment, some US$ 54 million is generated for the economy

3 Chemical Co.Importing

chemicals into US and Brazil

Chemical industry faces high market access restrictions through licenses, import procedures and lack of government agency coordination

Delays in chemical products are sensitive because of storage problems, demurrage charges, and potential confiscation of products

Obtaining licenses and lack of coordination of five agencies in the US leads to delays in up to 30% of shipments – each late shipment costs US$ 60,000 per day

Inefficiencies and uncertainty in Brazil force company to choose secondary importing procedures –they pay US$ 40,000 fee per shipment vs US$ 1,500 with the primary procedures

4 Computer Co.

Computer market access

in Russia

Product testing and licensing lead to large administrative costs and delay time-to-market anywhere from 10 days to eight weeks depending on specific product type

Price uplifts – the arbitrary price-setting of shipment imposed by customs on imports – cause higher value-added tax (VAT) that increases costs in some instances up to 30% of invoice price

5

CPG Co. (consumer packaged

goods)

Risk and business

environment in Africa

Political and social instability, economic mismanagement, corruption and security increase company costs and financing ability in Africa; they drive company investment decisions

Poor quality of infrastructure in roads, ports and services creates inefficiencies that translate into higher prices; input raw material costs may even increase almost up to 200% in certain countries

Note: Company names have been disguised to avoid sensitivities.


6 eBay Unlocking SME trade

Complex regulations, poor international shipping services, and high fixed costs of international trade discourage SMEs, who often enter markets only with reliable shipping and transparent or few regulations

Using preliminary eBay and outside data, the authors estimate that removing such barriers could trigger between 60% and 80% increase in cross-border SME sales

7Express Delivery

Services Co.

Customs barriers in global express

delivery

Delays arising from customs clearance bottlenecks and border administration inefficiencies are the major barriers express delivery companies encounter

Lack of risk analysis methods, limited customs operating hours, and lack of process standardization and coordination cause delays that may amount to 25% of the shipping cost company pays per package

8 Global Co. Manufacturing facility in Mexico

Based on Bain & Company’s experience, the impacts of supply chain barriers are addressed through a hypothetical study of Global Co., and what considerations it must make when setting up a manufacturing facility in Mexico for the North American region

Consideration of a country’s hidden supply chain costs includes transportation, infrastructure and security barriers

While Mexico might have a 25% cost advantage, more than half of that advantage could be eliminated by supply chain friction costs

9Handset

Distribution Co.

Market access in Brazil,

overall African environment,

and base operations in

Dubai

Complexity in tax and tariff regimes, and excessive customs requirements create significant costs in Brazil that are transferred to consumers

Handsets imported to Brazil will face 83% tax vs 32% for those produced locally, and customs delays of up to a month will add 5% to cost of product

Fees and tariffs, corruption and inadequate infrastructure in Africa lead companies to base operations elsewhere, and sometimes even not to enter specific markets

Lower barriers and greater connectivity in Dubai make it a better location for operation, even if that means adding ~5% cost to end product

10 Healthcare Co.

Trusted trader programmes in

Canada and China

Trusted trader programmes are one way in which countries try to overcome customs barriers to trade, but specifics of the programme itself can enable trade in varying degrees

The company’s trusted status in Canada is through an account-based system, requiring low minimal periodic inspections from government, which adds only 0.07% to costs per shipment

In China, trusted status decreases volume of inspections, which are still carried out for every transaction, and adds 0.64% to costs per shipment


11 IATA e-Freight: global air cargo

Complexity of handling physical paperwork along the global cargo chain is a major cause of delays and hidden costs

Adopting electronic documentation for the air cargo industry could yield US$ 12 billion in annual savings and reduce delays by 80%

12 Mexican Chemical Co.

Market access and business environment

effect in Mexican industry

A Mexican chemical company is hampered by registration regulations in the European Union requiring redundant local lab testing, which delays delivery several weeks

Deteriorating business environment increases inspection rates of chemical products into Mexico eightfold as a response to the rise of illegal drug trafficking, which adds US$ 750 to US$ 1,800 per shipment

13 PC Co.Technology

market access in the Middle East

A wide range of supply chain barriers to trade in the Middle East, in the form of local content requirements, rules-of-origin restrictions and pilferage at border crossings, stretch out customer delivery times and increase costs by 6% to 9%

14 Pharma-ceuticals

Pharmaceutical industry in

South-East Asia

Local investment regulations, import quotas, and inconsistent standards in South-East Asia and other developing markets obstruct pharmaceutical companies – they will release fewer new products in such markets, delaying people’s access to advanced medicine

Local clinical trials imposed by some countries may delay market entrance of new medicines by as much as five years

15 Rubber Products

Rubber monopoly in

South-East Asia

Substandard infrastructure, poor quality control and a corrupt business environment in the South-East Asian rubber market make the supply chain for finished goods unreliable

Eliminating such barriers could reduce carried inventories by 90 days, representing a 10% reduction in landed cost



16 Semicon-ductor Co.

High-tech industry barriers in Brazil, Russia, India and China

(BRIC)

Vague regulations and complexity in customs processes within China and Russia create bottlenecks in a semiconductor company’s supply chain, making it difficult to manage inventory levels and the shipment of finished goods

Operating in uncertain and unsafe business environments in Brazil, Argentina and India hampers operations and increases business costs

17 Shipping Co. Cabotage inUS and China

Cabotage is a politically sensitive restriction to the movement of goods within country borders; while based on sound national security concerns, the inefficiencies it creates affect entire supply chains

Relaxing cabotage restrictions reduces yearly costs by about US$ 200 million if the US trans-ships international containers instead of transporting via land

In China, relaxing relay regulations may reduce costs by some US$ 500 to US$ 700 million, and may reduce some US$ 1 billion in inventory by trans-shipping instead of rerouting

18 Tech Co. Market access in India

Preferential market access, a regulation where a government compensates domestic manufacturers, could raise a technology company’s costs by 7% to 9% over the cost of imports; this reduces offer quality and choices for customers


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