Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can be imported. This is known as quotas. Can you explain, using the example of Chinese toys, how quotas can be used as trade barriers? Do you think this should be used? Discuss.

A quota is a numerical restriction imposed on the quantity or value of specific goods that can be imported or exported within a given period. If the government of India imposes a quota on Chinese toy imports, only a certain amount of Chinese toys can be brought into our country. Quotas will limit the supply of Chinese toys, making them scarcer and costlier in the market. This will give a breather to Indian toy producers. Therefore, Quotas can protect domestic toy manufacturers in India by preventing excessive competition from Chinese imports.

I think the quota can be used as a protective measure to protect our local toy makers but It should be carefully done so as to strike a balance which will ensure fair competition between companies.