Trade Policy instruments affect international trade patterns and protect/promote domestic industries. Tariffs: Import taxes raising prices, protect domestic producers, reduce imports, generate government revenue; types include ad valorem (percentage-based) and specific (fixed amount). Quotas: Quantity limits on imports, directly restrict supply, raise prices, create scarcity; more restrictive than tariffs. Non-tariff barriers: Technical standards, health regulations, licensing requirements, administrative delays; often disguised protectionism. Subsidies: Government payments to domestic producers reducing prices, boost exports, burden consumers; World Trade Organization (WTO) attempts to limit. Exchange rate manipulation: Devaluation makes exports cheaper, imports expensive; often targeted as unfair practice. Export promotion: Tax breaks, subsidized financing, infrastructure investment; less controversial than protection. Trade agreements: Bilateral (between two countries, specific terms), Multilateral (multiple countries), Regional (geographic bloc). Most Favored Nation (MFN): Equal treatment for all trading partners; WTO principle. Infant industry protection: Temporary protection for developing industries until competitive; controversial regarding removal. Dumping: Selling goods abroad below domestic cost; often subject to countervailing duties. Indian context: India uses tariffs selectively, export incentives, engaged in regional agreements (SAARC, RCEP negotiations). ICAI focus: Policy types, effects on trade and consumers, strategic use. Exam tip: Tariffs distort competition but transparent; quotas more restrictive; subsidies hardest to measure and challenge.