Explanation – A Tariff Rate Quota (TRQ) is a trade policy tool used in international trade that permits a certain quantity of a product to be imported at a lower tariff rate. Once the specified quantity is reached, any additional imports of that product are subject to a higher tariff rate. This mechanism serves several purposes such as Regulating Imports, Protecting Domestic Industries, Facilitating Trade Agreements. While TRQs are associated with imports, they can also be part of export arrangements under specific international trade agreements or bilateral arrangements, providing preferential access to certain markets.

Source: DD News