Trade cost, trade policy and trade volume: a study of Indian apple market

Abstract

Trade Cost form a significant part of moving goods from producer to consumer. These cost are particularly high in developing countries. As a representative country, we look at Indiazs apple trade. Although tariff on apple imports is high, local distribution cost are much higher. While Tariff reduction will somewhat benefit the consumer, liberalization that promotes lowering of tradersz margins may facilitate high-volume, low-margin trade. Trade cost may come down if uncertainty regarding phytosanitary norms goes down and infrastructure investments in cold chain and retails chains pick up. Ceteris paribus, it is expected that demand for imported apples could reach 70,000 tonnes per year in a decade.