Classification (ISIC) – of an individual’s sector of employment, with tariffs faced in India's major export markets at the Harmonized System subheading (6-digit) level.<sup>7</sup> The same concordance was used to determine the variability of NTMs imposed on imports from India by the same top importers for the same reference year across different sectors.<sup>8</sup> The number of NTMs applied to India in this analysis includes those applied by these partners on an MFN basis, e.g. those NTMs that are not targeted specifically at India but at all exporters to that country.

In the household surveys under consideration, an individual’s sector of employment is based on activities pursued during certain specified reference periods: one year, one week and each day of the reference week. The activity status determined on the basis of each reference period is referred to as ‘usual status’, ‘current weekly status’ and ‘current daily status’, respectively. The ‘usual status’ approach is generally preferred as it is based on a relatively longer time horizon. Nonetheless, the current weekly status approach is important in any analysis of wages because these are expressed in weekly terms. Each approach is guided by the ‘majority time spent’ criterion. For instance, under the ‘usual status’ approach, an individual is considered ‘employed’ in a particular industry if he or she spent the majority of his or her time in the last 365 days on that economic activity, rather than being unemployed or engaged in non-economic activities.

The paper uses two correlated data sets to identify the relevant sector of employment.

1. Household level data where the sector of employment is based on ‘usual status’ of the household head with the corresponding household weekly consumption, which was used as proxy variable for income.

2. Individual-level data based on members within the household reporting an economic activity and corresponding income from such activity during the reference week.

The advantage of using household consumption levels as a proxy for income is that wage-based data do not include income received by self-employed individuals. Analysis on household level data was purely based on consumption, even if there are individuals within the household which reported income. For the data set based on individual respondents, individuals (15 years and above, excluding those studying full time) who had an activity during the week and reported its corresponding earnings are included.

# **4.2 Limitations**

The ISIC - HS correlation is not a full match concordance table. There are ISIC codes for which there is no corresponding HS code. Hence the analysis only includes activities in which the associated good/s can be identified with the HS code. For example, some ISIC codes which refer to construction (e.g. ISIC "4100 - Construction of buildings") do not have a matching HS code, and such observations were dropped from the calculation of the statistics.<sup>9</sup> For the

> 7 The tariffs at the HS subheading level matched with the ISIC code are trade weighted averages by value of imports from each partner. We also look at how much the tariffs faced have declined from their 1996 level for specific identified sectors. To calculate the reduction in tariffs, the same methodology was used to match tariffs in 1996 for the same partners.

> 8 The data on NTMs were extracted from the WTO's NTM database - I-TIP.  The database shows the number of NTMs by type – SPS, TBT, ADP, CV, SSG, SG, QR, TRQ and XS –  in each HS chapter.

> 9 Only observations of selected respondents who work in ISIC sectors where a correlation with HS (hence tariffs) exists (32% of respondents) are included in the study. The other 68% work in ISIC sectors that do not have ISIC-

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